From Barclays to Unilever: 14 major firms commit to purpose-led businesses
More than a dozen large firms have pledged to put social sustainability higher on the boardroom agenda, by joining a scheme aimed to help businesses become more purpose-driven.
PwC, EY and Unilever are among the latest businesses to join The Purposeful Company – a not-for-profit that describes its mission as helping firms to place people and planet on an equal footing with profit, embedding this approach across all parts of their value chain. This, it claims, will “transform UK business” and “create long-term value by serving the needs of society”.
The other new joiners are Infosys, National Grid, NHS England, NatWest, Barclays, Capita, Federated Hermes, Fidelity International, IFM, Hogan Lovells and Severn Trent. With these backers, the initiative covers two million employees and more than £1trn of assets under management.
Businesses signed up to the initiative will need to let key stakeholders including staff and community members have a “say on purpose”, outlining their wants and needs and airing grievances ad business’s past negative impacts. Findings from this activity should be taken on board, with potential measures including linking executive pay to progress on social and environmental targets; leaving trade bodies who lobby against positive change; and altering contracts with staff and suppliers to better support wellbeing.
To this point, The Purposeful Company states on its website that businesses should have a “shared how” as well as a “shared why”, collectively agreeing to align all business activities with a triple-bottom-line approach. They should only work with investors and partners that are “equally committed”, the site states, to ensure a holistic approach.
In this way, the organisaiton is hoping to create an asset class of purpose-led companies and a set of agreed metrics in which purpose can be measured – supported, potentially, by incentives. Many of the participating firms already have their own purpose statements and sustainability strategies, so these activities are, potentially, the motivator for going one step further and collaborating.
“These leaders, from a wide range of companies and organisations, all insist on the primacy of purpose,” The Purposeful Company’s co-chair Will Hutton said.
“Capitalism can best secure its future and win public support, the more its leaders are committed to purpose.”
Serving a purpose
The debate around business purpose had been growing more lively even before Covid-19. 2019 saw the Business Roundtable redefining the purpose of a corporation for the first time in more than a decade, stating a move away from shareholder primacy.
The pandemic has undeniably grown the conversation even further. In the early months of the crisis, businesses were keen to demonstrate how they were pivoting to protect the health and financial wellbeing of staff and suppliers, with those that didn’t often becoming the subject of high-profile media scandals. Now, as the vaccination rollout continues, research has repeatedly shown that consumers are keen to continue supporting brands that have supported their communities.
With this in mind, a number of collaborative initiatives for purpose-led businesses are expanding and new ones being created. These include the Leaders on Purpose network, the University of Cambridge Institute for Sustainability Leadership (CISL) and the Vatican-convened Council for Inclusive Capitalism.
There has also been a marked increase in the number of firms certifying as B-Corps – an accreditation regarded as leading in terms of purpose-led business. There are currently more than 3,500 certified businesses in more than 70 countries. In the UK, some retailers, including Ocado and Boots, are helping consumers understand what the accreditation means through dedicated product aisles.