In recent times, having a strong social purpose has become a “must have” rather than a “nice to have” for resilient companies. Once a company adopts a social purpose it needs to implement it in all that it does to ensure authenticity. This report is one of the first of its kind that is focussed on assessing how well the company has embedded its social purpose in meaningful ways.
This report is very insightful and would benefit investors, businesses, academia, ESG leaders, policy makers, civil society, and employees to understand the state of play.
Below are some key findings from the report:
a) The five- step transition pathway that companies take on their journey from social purpose adoption to social purpose execution are:
- Embed purpose in culture
- Disclose purpose progress
- Embed purpose into corporate strategy
- Embed purpose in incentive plans and performance objectives
- Embed purpose in board and CEO mandate
b) Companies are strongest on aligning their corporate values and disclosures to their social purpose, They are weakest at social purpose governance.
c) There are few companies with clear societal purpose embedded in their purpose statements, and
purpose is often conflated with ESG and CSR.
d) Social purpose and CSR/ESG are related but distinct undertakings, and it is necessary to have best practices in both.
e) Social purpose is also not a company’s values, an initiative, a brand, tagline or slogan, morality, altruism, giving back, or its philanthropy, community investment, or social impact program. It is its unique reason for being in business at all.
f) There are no off-the-shelf rating systems, metrics, or criteria available to validate a company’s authentic approach to governing and implementing its purpose. Corporate Knights developed its own formula for this and based its criteria on information that is typically found in the public domain.
g) Best practice companies incorporate purpose goals, targets, and metrics in their corporate strategy or balanced scorecard. This is essential for executing on the purpose, and for signalling to internal and external stakeholders the company’s purpose priorities and where it hopes to have impact.
h) Strategies change frequently, annually even for some companies, but purpose has longevity.
IC Insight: Many companies are steering blind on the formula to execute on their purpose and authentically embed it to achieve greatest impact. While purpose transition journey may look very different for various organisations, a reliable framework will help leaders navigate this complex space with conviction and confidence. At Inspired Companies, we use a 6 box framework to understand how purpose fits in with your culture, identity, corporate strategy, ESG, CSR, outcomes, success metrics and external/internal communications strategy.
