Building back stronger with a social purpose
Guest Blog Post for SPI by Monica Bohm, Strategic Consultant, and Social Purpose Advocate
Dec 09, 2020
Before the pandemic, the shift to purpose-led business had been building momentum and demonstrating success. Through the pandemic, companies with a defined social purpose are performing better than the average. A recent Harvard Law School study indicates that high purpose companies are not only more profitable and valuable, but they have outperformed those lacking a strong purpose during the pandemic.[1]
Has Social Purpose reached a Tipping Point?
The changes and actions that we observe are all pointing to yes. So, what does that mean…
Demands on corporations for social responsibility, transparency and reporting continue to expand from many sources. Most recently, Canada’s eight largest pension funds issued a call to Canadian companies to improve their environmental, social and governance (ESG) disclosures.[2]
ESG reporting and commitments are also on the rise and the understanding of sustainability impacts at all levels of business is improving.
The Black Lives Matter movement has been a catalyst for Canadian companies and brands to consider their diversity, inclusion, equity and societal impact. Companies are responding with efforts to address issues inside their organizations and outside in their communities.
Not just small, grassroots social enterprises are committed to sustainability. Industry leaders like Ikea, Unilever, Danone, Microsoft, Patagonia, and AirBnB are taking action and moving towards more purpose-driven production, retailing and transportation. Leading local companies in BC like Traction on Demand, Recycling Alternatives and Novex Delivery Solutions have also taken action.
Finally, and perhaps most importantly, there is evidence that consumers are demanding more from the companies and brands they deal with. In the context of an ongoing global pandemic, people have become ever more conscious of health, cleanliness, how they buy and who they buy from. And we have all become more aware of our role and relationship with the broader global environment. Canadians today are actively supporting companies and institutions that are doing the right thing. In fact, 70% of Canadian consumers said they believe companies should show how their products and services make the world better.[3]
Industries Ripe for Change
Many Canadian industries are under pressure to enhance sustainability practices. In BC, these industries have a significant opportunity to address risks and opportunities by understanding their societal impact and defining their social purpose for resilience and future success. These industry sectors have the most to gain:
- Agriculture
- Food retail
- Consumer products
- Transportation
- Construction
- Fashion
- Technology
- Mining and forestry
- Energy/fuel production
Based on trends in industry and government, employees and customer expectations, these business’ operations and processes are under intense pressure for improvement: the transition to a low carbon economy, the demand for more sustainable products and packaging, diversity and inclusion, and human rights in the supply chain; are some of the issues they face.
In sectors like agriculture and transportation, the climate crisis is driving change together with new government and regulatory requirements. In industries such as food retail, opportunities exist to capitalize on shifts towards plant-based diets and local sourcing in addition to addressing issues such as plastic packaging, transportation emissions, and racial equity. The construction industry is poised to benefit from energy retrofit investments supported by government. Companies in this industry need to reduce waste and emissions as they shift to support this pillar of Canada’s climate change agenda and pandemic recovery plan.
More and more businesses are starting to realize they cannot succeed in a failing society or planet. CEOs are wondering how their companies can help address these societal challenges and position their company for success in the future. This is creating the burning platform for companies to rethink their role in society and answer the question: why do we exist? And more and more businesses are realizing they exist to help build a better world. They want to build back stronger with a social purpose.
Defining your unique Social Purpose
The whole “why” do we exist discussion is still something most organizations haven’t really engaged in.
Defining your company’s social purpose is central to this journey. For success, social purpose determines the direction of a company’s values, strategies and actions and, to succeed, must be owned by the CEO and lived by all employees, not just the marketing or communications team. Anchoring your business strategy in social purpose will set your business up for the future and help you build back stronger in a post pandemic era, which can’t come soon enough for us all.
“To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society … Society is demanding that companies, both public and private, serve a social purpose.” Larry Fink, CEO of Blackrock
How does the SPI help?
Social Purpose Innovators is a unique program developed by the Social Purpose Institute at United Way to help businesses uncover or refine their core, societal reason for being. The program’s participants work with peers and expert facilitators through a proven process of research and ideation to develop the company’s enduring north star.
For more information, contact us.
Sources:
[1] https://corpgov.law.harvard.edu/2020/11/09/the-return-on-purpose-before-and-during-a-crisis/
[2] https://www.theglobeandmail.com/business/article-most-of-corporate-canada-embraces-esg-reporting-but-consistent-data/
[3] The Public on Purpose; Executive Summary. Insights from a Global Study on Corporate Purpose; The Public On Purpose: Insights from a Global Study on Corporate Purpose | GlobeScan
