Hope or hype?
Insights from the RISE launch debate on corporate purpose in Brussels.
While companies increasingly recognise the competitive benefits of leading with corporate purpose, selling the process internally to employees and the executive suite remains a challenge for businesses traditionally more focused on investors. The way to sell this concept to companies is to highlight the business case, according to a leading business representative at a panel in Brussels.
“We need to acknowledge that it is challenging for business,” said Rebekah Smith, who heads up social engagement at Business Europe, the continent’s largest corporate advocacy organisation. “Aligning company business models with their objectives is not an easy sell and only a few companies see it as an opportunity,” Smith said. Equally, the SDGs are not an excuse to come up with policies that put companies at a disadvantage.
Discussing purpose in Brussels means that the debate is genuinely multi-stakeholder. In the EU capital, where finding common ground and building partnerships is part of every-day business, corporate purpose cuts across private sector, government and civil society lines.
Hype: preventing purpose-washing
Geoff McDonald, former Global VP HR at Unilever and Senior Adviser at RISE said that statements such as “making an impact that matters” are meaningless unless accompanied by clear and measurable goals. What enabled Unilever’s purpose of ‘Making Sustainable Living Commonplace’, which Geoff helped archetype, to come to life was translating that statement into goals that would guide the business through measurable targets. Unless we have a degree of accountability in corporate purpose, it is indeed just hype.
The view from the European Parliament
How do elected officials see the emergence of corporate purpose as part of a sustainable economy? Eva Maydell MEP, who sits on the European Parliament’s influential industry and monetary affairs committees, emphasised the focus on education and engaging all parts of our community, especially minorities. “Education should enable corporations and government bodies to work hand in hand,” Maydell said. As the global war for talent increases, Eva expressed her desire to see purpose through education to up-skilling professionals, a sustainable continent and a Europe of talent. At a time when more and more people actively seek out companies with purpose, it is a key differentiator in that war for talent, and therefore a win-win for everybody.
Purpose should drive performance
Business Europe’s Smith added that companies increasingly embrace corporate purpose and broader stakeholder engagement as ways to improve economic performance and build trust. Companies have recognised the competitive benefits that come with sustainability and corporate purpose. She noted that for purpose to drive performance and strategy it requires a business transformation, and we need to acknowledge that this is challenging. Also – while companies often communicate to clients, consumers, and communities but less to employees, it is essential to get all employees on board in the purpose journey, not just upper management.
Purpose is our business
Austrian government spokesman Alexander Winterstein, who formerly held a similar role with the European Commission, pointed out that European institutions operate with a strong purpose every day – to improve the lives of European citizens. The UN Sustainable Development Goals are part of the Austrian Government’s daily purpose which creates opportunities for business to engage. However, no communications battle is won only by graphs, figures and facts. It is essential to have charisma, empathy and innovative strategies and tactics.
Maydell also put forward the idea of regulating companies with regards to sustainability in a similar way that we have regulated data standards in the past. “There are a number of discussions going on in order to set up the regulatory framework, so as to implement those green measures when it comes to trade and development policies.” Even if the EU takes the responsibility, it is also the responsibility for the rest of the world to make sure that certain standards are implemented and withheld.
Hope: glass half full vs glass half empty?
In the glass half full view of the world, less people around the world live in poverty, more people are educated, and we are healthier than ever before. From the glass half empty perspective however, we have climate change, millions of species are about to become extinct and wealth inequality is larger than ever. McDonald asked this rhetorical question to CEOs: ‘Do you want to be part of the solution or be part of the problem?’ It is about our generation’s legacy and what we want to leave behind for younger generations.
Maydell pointed out that we cannot expect all companies to change the world. What we can expect is that companies consider the problems that societies face today. Embracing corporate purpose is an opportunity to drive performance, build trust and improve the world for the future.
To sum it up: companies with purpose last, brands with purpose grow, and people with purpose thrive.