Real purpose takes real commitment and a real desire to create change. That desire starts with leadership and runs all the way through the organization, not just the marketing department. — T. Littleton, CEO of The Social Element, a social media agency

There’s no denying that a fundamental shift is happening in business. Forward-thinking business leaders are taking measures to ensure their organizations are resilient and remain relevant, which is prompting many to question the social purpose of their businesses.

Concern about social purpose was evident in BlackRock CEO Larry Fink’s 2018 letter to business leaders in which he made the bold assertion that “to prosper over time, every company must not only deliver financial performance but also show how it makes a positive contribution to society.”

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The next year, the Business Roundtable, a group of U.S. CEOs, issued a statement defining the purpose of a corporation in stakeholder terms, including customers, employees, suppliers and communities. Businesses were expected to have an aspirational reason for being, one that extended beyond shareholder profits.

Getting serious about social purpose is a smart business move. When companies live up to their stated purposes, they create trust, says Colin Mayer, a professor of management at the University of Oxford and the academic lead on a research program examining the purpose of business. Trust translates to less customer churn and more sales, as well as more engaged employees.

A social purpose–driven company builds deep connections with stakeholders and, in turn, amplifies the company’s relevance in stakeholders’ lives. As a result, purpose-driven companies can gain market share.

This past summer, Maru Group released a study conducted for Salesforce Canada showing that 87% of Canadians want to buy brands that are open and honest about their values, 83% want to buy brands that put as much priority on values as profit and 50% actively search for a brand’s values before making a purchase.

However, despite increased interest and demand for social purpose, corporate leaders grapple with how to embed purpose into an organization’s DNA — and many miss the mark.

Slapping purpose on top of current business practice by adding a statement or two on the corporate website or annual report, making charitable donations or encouraging employees to volunteer are at best tokenistic. Such attempts result in little, if any, meaningful change in the lives of employees or the communities and customers served.

Efforts that simply reflect the movement of the moment, without any thought to sustained, long-term impact, will probably fail.

Also, when social purpose isn’t tethered to the product, service or category that a business is built on, purpose is easily abandoned because it sits on the periphery of the business as opposed to being woven into the fabric of the entire company.

But social purpose is about more than marketing. While marketing teams’ understanding of brands and customers positions them well to help shape purpose, campaigns and activations should be an extension of a business’s social purpose, not its only manifestation.

Purpose done right

For social purpose to truly insert itself into organizational DNA, driving the company into the future, it must connect to all aspects of the business — from its people to its operations to its communications and policies.

When done right, purpose changes the way a business operates.

Consider the example of Unilever. In 2020 the company released its new strategy, the Unilever Compass, to guide it toward its goal to be a leader in sustainable business. The Compass includes 15 priorities to tackle key challenges such as packaging and waste, gender equality, human rights and fair value.

A 2020 Accenture study found that three out of four North American financial advisors said clients were asking about environmental, social and governance criteria when investing. With an increasing proportion of clients requesting information on sustainable and ethical investing, it is paramount that advisors identify which companies are leading the way. A defined social purpose backed up by results is one good indicator.

Shilpa Tiwari is executive vice-president of Social Impact and Citizen Relations, and the founder of Her Climb.