There is a real sense that the movement for business to embrace the need for clear social purpose is gathering momentum.
Listening to Al Gore and other speakers at the British Academy event on the Future of the Corporation on 1 February, I was struck by Gore's assertion that, whereas once upon a time, if you were an asset manager who took environmental, social or governance (ESG) factors into account, you could be held to be in breach of your duties, now you would be in breach NOT to take those factors into account. That's because companies that prioritise ESG are no longer seen as poor relations, or working on the fringe - they actually perform better financially.
The research carried out by ReGenerate on the case for purpose-driven business bears this out. As they say, their research shows "how having a “purpose beyond profit” not only helps companies make a difference but is also more likely to make them sustainable and successful." Exactly. Having a clear purpose and being a successful business are not mutually exclusive; they can be two sides of the same coin.
The journey of the law firm I work for demonstrates that you can be guided by a social purpose and still be a good and sustainable business. We have helped many other organisations work out how to be focussed on a social mission and deliver strong financial performance. It is not an easy journey, and it can make decision making more challenging - if you are only seeking maximum financial return in the short term, then you have fewer factors to worry about. But this is the business model of the future. The needs of the climate, grotesque inequality and the other challenges we face, require nothing less.
The potential for businesses to positively impact the world is extraordinary, whether through improving people’s lives or the environment. This paper shows how having a “purpose beyond profit” not only helps companies make a difference, but is also more likely to make them sustainable and successful.