Co-authored with Abdul Zamerli, Senior Manager, Accenture Strategy and Katie Dunn, Senior Manager, Accenture Strategy
“Purpose.” It’s not a new concept in the private sector. But it’s shifted meaning in the last 18 months—a period like no other. We're not just referring to the pandemic. The world burned as record wildfires swept different parts of the globe, reminding us of climate change in their wake. We witnessed a resurgence of the racial justice movement in the United States and beyond.
There’s a growing expectation that the private sector should step up to do its part. Pressure to do so from all stakeholders—consumers, employees, shareholders—requiring CEOs to tackle sustainability challenges. It’s something 65% of consumers expect businesses to prioritize, and 40% of employees think their employers’ actions during the pandemic didn’t demonstrate enough commitment to the planet or society. 71% of investors agreed that COVID-19 will increase awareness and actions to tackle risks related to climate change and biodiversity losses. In fact, companies with high ratings for ESG performance generated higher annual total returns to shareholders, outperforming lower ESG performers by 2.6x.
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Clearly, purpose needs to transcend PR posturing to deliver real value to the “triple bottom line” of people, profit and planet. Companies need to have purpose that also includes their core business. Indeed, companies should not only strive to bring value to shareholders and deliver products/services to their customers, but they should make the business part of their purpose.
From posture to purpose
So, how do leaders move from talking purpose to acting on it? Volumes have been written on it but here are five guidelines to follow.
- Address societal issues authentic to your brand and material to your business.
A good set of guidelines can be found with the United Nations’ Sustainable Development Goals. When it comes to the UN’s goal to encourage responsible production and consumption, Mars goes beyond PR, ultimately delivering more value to their bottom line. Tens of thousands of farmers have participated in their Responsible Cocoa program since 2019. By training and supporting farmers to maximize cocoa production safely, ethically and sustainably, Mars has delivered real value to their triple bottom line, lowering its cost of capital through improved standards and transparency on ESG progress (a trend commonly seen in companies with high ESG scores).
- Integrate societal impact into your business operations and broader value chain, building agility and resilience across supply chains to adapt quickly to change.
In the U.S., furniture retailer Pottery Barn works with The Renewal Workshop to sanitize all returned fabrics so that they are renewed then resold. This represents the brand’s first step toward becoming a circular business and furthering its leadership in sustainability and innovation.
- Innovate to deliver better environmental outcomes through your core products and services. One of the clearest examples of this? Volvo Cars. This year, they announced they will phase out all car models with internal combustion engines, only selling electric vehicles by 2030 and delivering environmental impact through their core products and services.
- Engrain sustainability impact into your company culture, designing your governance structure and incentives to drive outsized impact. At Hewlett Packard, all 55,000 employees are encouraged to set sustainable impact goals (e.g., expanding closed-loop recycling) as part of their overall annual performance goals. It’s a move that emboldens their people worldwide to take a personal stake in the success of the company’s impact strategy.
- Attract and retain top talent by implementing business practices that support people reaching their potential, authentically. Embedding purpose into your operating model is important for the workforce of the future and is the key to driving real impact. In fact, during the first six months of the pandemic, we found that 78% of workers strongly believe their employer is responsible for supporting their holistic needs (including their purpose). Our research and statistical testing of 20+ employer practices determined that five practices pay dividends, both for individuals to become net better off and unlock their potential and for organizations to improve revenue growth potential.
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Whatever you decide to do, set audacious goals to drive measurable outcomes and put real deadlines for their delivery.
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Go for the goals
Whatever you decide to do, set audacious goals to drive measurable outcomes and put real deadlines for their delivery. It’s something Google did. They have been carbon neutral since 2007, have operated using 100% renewable energy since 2017, and pledged to be carbon free by 2030.
For companies that move beyond “talking the talk” of PR and into “walking the walk” of lining up behind a purpose, the benefits (beyond societal good) would translate into a much more resilient organization. One poised to meet the challenges of both near and long-term. Contact us if you’re ready to make the move.
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