The novel coronavirus (COVID-19) pandemic is creating the worst humanitarian and economic crisis in a generation, threatening the lives, livelihoods, and learning of hundreds of millions of people around the world. While the final impact is hard to predict – as it will depend on the future pattern of the disease spread and potential resurgence, the shape of the economic recovery, and the response by government, business and civil society – one thing is clear; the impacts have been severest for the most vulnerable.
In such an unprecedented global social and economic outlook, the role of purposeful business in supporting societies and tackling the impact of the pandemic is particularly important at the moment.
We have seen inspiring examples of companies taking extraordinary action to respond to the impact of the pandemic, with many now starting to look at how they can support recovery and efforts to build back better. It is during these unprecedented times of crisis through which we see companies’ purpose, values, and culture coming to light. Companies will be long-remembered for the actions they take now – both as part of the emergency response and in how they lay the foundations for a more inclusive, resilient and sustainable future.
As noted by Larry Fink and Paul Polman, among others: purposeful, multi-stakeholder businesses are more likely to have sound corporate finance, a more loyal and engaged workforce, protected value chains, and are well-regarded in public opinion. These are all drivers of business resilience in challenging times. A clear and authentic purpose enables alignment between core business capabilities and stakeholder needs.
Business Fights Poverty has been coordinating a Business and COVID-19 Response to support business’ immediate and longer-term actions in supporting the most vulnerable, with Jane Nelson, Director of the Corporate Social Responsibility Initiative at Harvard Kennedy School (and Board Member of Newmont) and with initial support from the UK’s Department for International Development. This has included the creation of a Response, Recovery and Rebuild Better Framework with guidance for business action, in which we identify purpose as one of the key foundations for how we collectively build back better.
Over the past year, we have explored the topic of purpose and how it can be embedded authentically into business through a collaborative Challenge process supported by GSK, Unilever and Visa. Our research suggested that investors are an underutilised and often overlooked source of expertise and support for companies who are serious about embedding purpose. Increasingly, they recognise the link between addressing material, social and environmental factors and a company’s financial performance.
In this time of hardship, we believe that investors and financial institutions can be invaluable partners in creating a transformational shift towards a system that rewards models that are purpose-driven and sustainable in the long-term.
Today we are launching a discussion paper around the question “How can companies and investors collaborate to embed purpose authentically into business?”
In addition to our own experience and research, this draws on discussions with our Challenge supporters, as well as over 200 practitioners and experts who shared their insights, an online survey of the Business Fights Poverty community and the outputs of an online discussion that attracted close to 3,000 people.
To mark the launch, we are holding a follow-up online discussion today. If you are unable to join us during the live segment, the discussion will remain open and you can read other participants’ comments and add your own here.
Embedding purpose requires action across all levels and all operational areas of a company. Consequently, in the first stage of the Challenge, Business Fights Poverty co-created a practical framework consisting of five pillars – “Define, Do, Live, Say, Partner” – to help organisations align their core business activities with a clear sustainable purpose (see box).
In order to deepen the understanding of the important role that investors can play in embedding purpose, in the second part of this Challenge, Business Fights Poverty identified three areas in which collaboration between investors and companies would be particularly fruitful:
- Materiality: Defining company purpose with reference to material factors that impact long-term financial performance.
- Leadership: Providing leadership for cultural change within organisations to authentically embed purpose.
- Impact: Bringing Impact Investing to the mainstream and encouraging transformative approaches to impact measurement and disclosure.
We hope that in these unprecedented times, the practical suggestions introduced by the Discussion Paper will inspire new collaborations able to transform talk of “sustainable purpose” into meaningful and consistent actions – to build back a better society for all the stakeholders of organisations.