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Promoting purposeful business models in the private sector, pt. 1

The UN’s Sustainable Development Goals (SDGs) are aimed at making sustainable business the operational normal. Outlined and in effect as of 2016, the 17 goals address poverty, the environment and economic prosperity. In order for the SDGs to be successful, government, civil society and the private sector must “contribute and cooperate to realise this new agenda”. Companies are in a unique position to fund efforts made in realising the SDGs alongside the third sector and government, and a few notable organisations and business leaders are paving the way.

A milestone for this agenda has been the legislation that allows both new and existing companies to certify as Benefit Corporations or B Corps. For those unfamiliar with B Corps, it’s defined as: “B Corp is to business what Fair Trade certification is to coffee”. B Corporations are companies that have formally committed to having the “dual purpose of profit and social purpose” and place them on equal footing. The non-profit B Lab has gone so far as to redefine success in business by certifying for-profit companies in their ability to meet “rigorous standards of social and environmental performance, accountability and transparency”. The specific corporate legal structure of a B Corp mandates purpose beyond profit is realised in business as usual operations, requiring companies to legitimately pursue a meaningful agenda that goes beyond normal CSR initiatives.

Further advocating for socially conscious business is The B Team. It’s an initiative formed by a group of global business leaders including Sir Richard Branson of the Virgin Group, Paul Polman of Unilever, Ratan Tata of Tata Group, Oliver Bäte of Allianz Group, David Crane of Pegasus Capital Advisors and Marc Benioff of Salesforce to name a few, who fervently believe in the private sector’s ability to successfully deliver social and environmental along with economic benefits. While calling on companies of all sizes, the B Team also encourages start-ups to manage and operate in ways to deliver this triple bottom line. Having a purpose from the inception rather than having to backwards engineer one – called ‘Born B’ – will not only allow for greater impact within the community but also aid the organisation in attracting talent, customers and investors from the get-go.

While the case for purpose is strong in securing loyal customers, social impact is also proven to provide healthy returns for investments. A 2015 report by Morgan Stanley evaluated the performance of sustainable investment strategies and discovered 

72% of the companies surveyed with a social impact purpose showed higher profitability and lower volatility

 Overall, the report found that social impact investing “usually met, and often exceeded the performance of comparable traditional investments”, thus it has the potential to be more profitable and less risky. Companies that have attributed their success to brand purpose such as Unilever, Patagonia, and TOMS Shoes are furthering their impact agendas through investment schemes that specifically fund start-ups with purpose-based models. They’ve established initiatives, in-house platforms and venture capital funds to work with and support start-ups whose missions, passions and values align with those of their own.

Unilever is the most widely known corporation to trumpet a social purpose and weave it into its sub-brands with incredible success. CEO Paul Polman looked to the company’s history, back to William Lever’s Port Sunlight in the 19th century, and its role in bringing hygiene to the masses and realised the brand always had a social conscience. In 2010, Polman spoke to the Confederation of British Industry and announced Unilever’s unparalleled strategy of halving the company’s environmental footprint, whilst doubling revenue all by 2020.

Unilever’s Sustainable Living Plan was launched in 2010 which was derived to support the ambitious plan Polman outlined – focus on creating long-term value for consumers around the world as opposed to short-term profits for shareholders. CMO Keith Weed shared “We know that consumers increasingly want brands with purpose – and that purpose delivers growth. We are seeing particular growth (10% Neilson) in our brands that have purpose built into them”, such as Dove, Persil, Ben & Jerry’s, Comfort and Marmite.

The FMCG behemoth established Unilever Foundry in 2014. It was created with the goal of mentoring and investing in digital marketing start-ups and give them access to its portfolio of brands and collaborate on live projects “in exchange for insight into new technology and trends”. It further’s Unilever’s mission of establishing a sustainable future for the business.

The Foundry has sought start-ups that share its passions and visions to best align the start-up with Unilever brands in order to help them scale up. The rapport the Foundry has created with a handful of startups is two-way – start-ups bring to the table new marketing techniques as well as utilising more “efficient and effective ways of engaging with people”. President of South East Asia, Pier Luigi Sigismondi said: “[The Foundry] stems from our mission to make sustainable living commonplace. It offers our business a direct connection with disruptive technologies and changemakers to shape the way we work – ultimately impacting people’s lives.”

 

 

To read more on Brand Purpose, sign up for our newsletter Purpose in Practice  or download our e-book ‘How Good Is Your Brand Purpose?‘ in which we explore why Brand Purpose matters in business today through interviews and thoughts from brand leaders across multiple sectors. 

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