« Brands that deliver on pursuit of purpose, that drive a culture of sustainable innovation, are the front runners in consumers’ eyes – and they are watching. »
CHRISTIANNE CLOSE, GLOBAL MARKET PRATICE LEADER, WWF INTERNATIONAL
Since the Covid crisis, purpose has become a central issue in the workplace. The time when a company’s sole objective was to make a profit has seemingly come to an end. Companies must now also demonstrate their societal value. Whether it’s diversity, equality, the fight against climate change or employee well-being, companies have multiple dimensions to address in order to keep selling their products and hiring the best talent.
The great “reflection”: workers look for purpose
If purpose has been an increasingly important topic within companies for the last 10 years, the covid crisis has been a major accelerant. 52% of employees say the pandemic has made them question the purpose of their day jobs. People have developed a new sense of awareness and worth for themselves and the world around them. This is prompting them to demand more personal value and purpose from both life and work. 3 out of 4 employees expect their employer to take a stance on the societal and political debates of the day. Students are even more radical and use their voice to put pressure on companies: to access talents companies need to prove their social and ecological commitments.
of employees say the pandemic has made them question the purpose of their day-to-day job.
(Source: Future of Work, Gartner insights)
of millennials expect companies to demonstrate their sustainable commitments.
(Source: Nielsen 2018)
Customers ask for more sustainability
The topic is also increasingly important for clients. Many consumers today make decisions based on how brands treat employees, the environment, and the communities in which they operate. This is also true in B-to-B industries where sustainability criteria are becoming mandatory. Patagonia in the US announced in 2020 that its corporate-sales program would only establish new accounts with companies that are in tune with its own environmental and social values. EcoVadis, the rating provider that help companies monitor the sustainability of their value chain, raised $500M in June 2022, becoming the first unicorn in the sustainability data ecosystem. In addition, customers are increasingly empowered to verify companies’ commitments and denounce bad behaviors.
Investors favor impact-driven entreprises
An increasing amount of money is being directed towards responsible investment: Sustainable fund launches grow by 70% in 2021, and more than $500 billion flowed into ESG-integrated funds in 2021. Accounting practices are being strengthened with international standards expected to emerge in 2022. To remain funded, companies must prove their sustainability commitments.
rise in online searches for sustainable goods globally between 2016-2020.
(Source: the Economist, An Eco-awaking, 2021)
of brands say that ‘‘implementing sustainability measures’’ was a top priority in 2020.
(Source: The Economist, An Eco-awaking, 2021, US, EU)
Corporate World is increasingly commited
Business leaders are also embracing their responsibility on social and environmental issues. Virtually all of the world’s largest companies now issue a sustainability report and set goals; more than 3,000 companies have set a science-based carbon target; and about one third of Europe’s largest public companies have pledged to reach net zero emissions by 2050. On the social side of the agenda, companies have been committing funds to fight racial inequality, and speaking out on societal issues they used to avoid.
A purposed led vision of capitalism is also gaining a momentum. In 2019 the US Business Roundtable, a public policy group made up of 181 U.S. CEO’s (including the heads of Amazon, Apple, and Ford) issued a statement saying that a broader social responsibility should be prioritised over pure profit seeking. The “loi Pacte” in France created the «company with a mission» label. The B Corp label, which certifies companies that operate for the wider good of society, is booming with 140% growth in the number of B Corp’s certified between 2018 and 2020
OPPORTUNITIES & CHALLENGES
Including extra financial considerations in a company’s mission requires changing the way the business is done. This is true at every level of the organisation : HR needs to embed purpose in job descriptions, employee training and evaluation. Marketing managers must ensure the organisation’s purpose resonates with customer values. Buyers and production managers must align their practices with the company’s social and environmental objectives. Sooner or later, every worker will have to adapt the way they work.
Employees who feel their voice heard are 4.6 times more likely to perform their best work. (Source: Forbes, 2019)
Purpose drives employees’ engagement
Employee disengagement is at an astounding 85%, a global “norm” resulting in approximately $7tn in lost productivity. By providing employees with a real sense of purpose and the freedom in building their own experience, companies can not only retain talents but also increase their profitability. Increasing empowerment requires changing the overall company culture, preferably throughout the lifecycle of the employee: from the recruitment process to the day-to-day work. This means starting from the needs and identity of the individual employee rather than imposing a fixed ‘norm’ that is defined by a dominant group within the company.
Empower means profit: highly engaged teams show 21% greater profitability.
(Source: Forbes, 2019)
of employees would like to learn more green skills to become more valuable in the workplace. (Source: Future Today Institute)