The 2015 Harvard Business Review report ‘The Business Case for Purpose’ showed that there was a high level of consensus among the global business executives surveyed that purpose matters and ‘a widespread belief that it has positive effects on key performance’. The survey also showed that companies that ‘clearly articulate their purpose enjoy higher growth rates and higher levels of success in transformation and innovation initiatives’.
At a time when trust in business has declined substantially, but companies are facing increasingly high expectations in terms of how they should behave, being able to demonstrate a higher purpose than simply making money is becoming a business critical issue. Research into Next Generation Governance by ICSA showed that companies are now being judged in the context of big societal issues such as technological change, environmental sustainability and financial inequality. This latter concern is reinforced by the 2018 Edelman Trust Barometer, which showed that 40% of respondents consider the divide between the rich and poor to be getting bigger, one of the top three concerns for the future.
What is more, the 2019 Barometer shows that there is deep dissatisfaction with ‘the system’ with 75% or people globally and 73% of people in the UK trusting their employer to do what is right, significantly more than business, which is trusted by just 56% of people globally and 47% of people in the UK to do what is right.
Employees want to work for a company with values, that has a purpose and that is answering societal needs. Similarly, regulators want greater transparency about the social and environmental impact of business and investors are increasingly motivated by ESG considerations.
Join Adeline Diab, Co-Head of Sustainable & Thematic Investing at Barclays Investment Bank and her fellow panellists at 11.45 on Tuesday 9th July to discuss how and why companies with strong purpose outperform those that don’t.