What is business ‘purpose’, and why is sustainability reporting a vital component? Chloé Joyeux looks at why there’s a lot more than meets the eye to getting this concept right, and the businesses that are reaping the rewards
Pressure is mounting on companies to show that they are playing their part in the fight against climate change, that they are treating their employees well and that they are holding their suppliers to account. In short, companies are expected to do more than purely making a profit.
Leading companies are focusing on why they exist, what impact they are having and how they can leave a positive mark. Essentially, they are linking their brands and aligning their core values to a PURPOSE.
But what is business purpose?
Business purpose is much more than your vision statement. It is the very reason your company exists, as well as what it stands for in historical, ethical, emotional and practical terms. Purpose needs to ring true, to be authentic. When your purpose is misaligned, it jars and you lose trust (eg Pepsi’s ad featuring Kendall Jenner and Etsy’s employee petition are two well-documented examples).
When done well however, defining purpose can boost profits and attract talent – especially younger generations. A recent study by PwC found that 88% of ‘millennials’ want to work for a company whose values reflect their own.
Examples of companies getting it right include giants like Unilever, with their vow to have “the highest standards of corporate behaviour towards everyone we work with, the communities we touch, and the environment on which we have an impact”; or Danone, which has made its mission “bringing health through food to as many people as possible.”
Sustainability reporting shows your purpose is more than words
But behind these big claims, you need robust and transparent data. When a company explicitly states a purpose, its customers, employees and investors will hold it to account. They will expect companies to report back. This means purpose must be material to the business, material to the way it makes money and almost more importantly, it must be measurable!
Unfortunately, creating a clear, ongoing and measurable plan is not as easy as it sounds. B&Q is now a recognised award-winning sustainable company, but the journey took time and dedication, starting over a decade ago with the launch of B&Q’s One Planet Home. This was an innovative, all-encompassing programme, at a time when sustainability was just starting to become fashionable.
More recently, B&Q’s parent company Kingfisher launched its new Sustainable Growth Plan. Kingfisher’s purpose is “to create good homes by making home improvement accessible for everyone” and underneath sit four ambitious goals:
1.Save money by saving energy and water
2. Live smarter by getting more from less, re-using or using longer
3. Create a healthier home and connect with nature
4. Be part of a community that helps millions more people improve their homes
Consumers, employees and investors are expecting Kingfisher to deliver against these goals. Behind the scenes, targets, KPIs and actions were developed, enabling Kingfisher to report true progress in a meaningful way.
Brands can have a purpose, but they must show that this sits on robust data and real change. To be able to back up their claims they need to be absolutely certain they can monitor and report on them with data that aligns with the impact they want to achieve.
Learn more about our work with Kingfisher to help define its Sustainable Growth Plan, as well as our wider work on sustainability monitoring and reporting.