Three strategies for building purpose-driven companies

November 11, 2022


Three strategies for building purpose-driven companies

November 11, 2022

Sarah Repucci

Americas Regional Head of Policy & Insights, Economist Impact

Sarah Repucci leads the Americas Policy and Insights team for Economist Impact. Drawing on more than 20 years’ experience in the social impact space, she spearheads production of cutting edge custom research to drive positive change in the world. Previously, Repucci worked for Freedom House, where she oversaw Freedom House’s flagship publications including Freedom in the World, and led the expansion of Freedom House’s research on global democracy and human rights as Vice President of Research and Analysis. She also worked for Transparency International and the Global Business Initiative on Human Rights, and as an independent consultant for a range of NGOs, bilateral and multilateral organizations, and private businesses. Her commentary has appeared in the New York Times, the Washington Post, CNN, the BBC, National Public Radio, and Foreign Policy, and she has testified before the House Foreign Affairs Subcommittee on Africa, Global Health, Global Human Rights and International Organizations. She holds a master’s degree from New York University and a bachelor’s degree from Williams College.

The idea that companies should be driven by purpose and not just profit is an important consideration for business leaders. The interconnectedness of the global economy means they cannot insulate their companies from societal trends. There is pressure from shareholders, consumers and their employees to do the “right” thing in everything from environmental sustainability to social justice—despite it being impossible to reach consensus on what is “right” on many issues. No company exists in a vacuum where corporate actions are completely divorced from impacting the world. As a result, leaders are increasingly expected to take moral stances.

How can companies constructively engage with activists of all types to push for positive change?

ESG strategy development

Once a business leader decides that contributing to positive change is a priority, it can become a challenge to determine what is right for the company while balancing other business interests. The effort to add value must be genuine and consistent, as both employees and civil society actors are quick to call out ill-considered initiatives as PR efforts.  Leadership must first determine what “right” means in an ambiguous world with evolving social and environmental landscapes.

One way to tackle this challenge is to develop—or continue to evolve—the corporate ESG strategy. By tying the strategy to corporate values in a coherent manner, stakeholders better understand what the company stands for and what it aims to achieve through its ESG work. For example, at Mastercard the core value of financial inclusion drives ESG initiatives—made more compelling because they form part of the company value proposition. 

To reinforce the strategy, some companies have built a proactive framework for how they will respond to tough social or political issues. With a preconceived plan in place, business leaders feel better prepared to act efficiently and transparently. As a result, they have more opportunity to drive engagement even when stakeholders do not agree with decisions.  

Consultation with stakeholders and collaboration with partners

Forming and deepening ESG strategies requires continual consultation with stakeholders. By listening to company stakeholders, business leaders can develop a better understanding of the complexity of risks and opportunities for positive change. ESG is a broad concept and that makes it an opportunity for rich and illuminating conversations.

Collaboration with other businesses can help drive positive change as well. The challenges facing the planet are beyond the ability of any one company to tackle. Companies can team up with like-minded partners who can amplify their efforts and push common goals.

The role of “B Corps”

In response to these trends, some companies have sought certification as B Corporations—known as “B Corps”—to demonstrate their commitment to inclusivity and sustainability. B Corps have raised the bar, voluntarily meeting externally determined ESG standards and incorporating them into their statutes.

B Corps are companies that have been certified by the nonprofit “B Lab” as meeting rigorous standards for social and environmental performance, public transparency and legal accountability to balance profit and purpose. B Corps consider the interests of their stakeholders—customers, workers, suppliers, communities, investors and the environment—in their decision making practices. 

The B Corp community collaborates among themselves and with other stakeholders to take an activist stance. For example, ice cream manufacturer, Ben and Jerry’s, worked with chocolatier, Tony’s Chocolonely, to battle slavery in the chocolate supply chain by only sourcing traceable cocoa. B Corps also empower their employees and consumers to take action. For example, Brazilian beauty products manufacturer, Natura & Co., engaged in a campaign for World Amazon Day to educate people on joining environmental movements, using their vote to protect against deforestation and thinking more critically about their product choices.

Positive change for the next generation

Companies must grapple with social, political and environmental issues today that leaders 20 years ago would never have considered relevant. By being clear about their values and building strategies and frameworks to act on them, businesses can be at the forefront of leading positive change that will affect generations to come.

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