An ever-growing number of businesses and brands are describing themselves as “purpose-led”.
But how do purpose-led businesses work in practice – and is this just another clever marketing strategy?
The growth of purpose
It’s not surprising that there’s a growth in interest in purpose-led businesses. Our world is in trouble. We are on the brink of a climate crisis, and we are seeing the impact of climate change all over the world, every day. The gap between rich and poor is becoming ever-more extreme. Poverty and hunger are not just confined to countries far away – they are also on our doorsteps with the increasing use of food banks and prevalence of fuel poverty.
Consumers are looking to the businesses and brands they buy from, to see how they are using their profits to address these global problems. And the evidence shows that they are willing to spend more with those businesses whose values align with their own.
Corporate social responsibility has become big business. So how can businesses put this into practice in a meaningful way?
Business or charity?
There can be an uncomfortable sense of conflict when we talk about purpose in relation to profit. But this should not be the case. The drive to ‘do good’ is not confined to the charitable sector. A purpose-led business can have an equal focus on profit, people and planet, and some of our most successful global businesses are making profits and delivering change. And charities and purpose-led businesses can work together to deliver real impact on the ground.
Where purpose-led businesses differ is that their profit is not at the expense of the planet, or of the community. And they go further, in using their money, resources, talent and influence to make the world a better place. It’s not about avoiding harm, it’s about doing good.
Purpose in practice
Being a purpose-led business could be as simple as giving a percentage of profits to charity. However, taking a more comprehensive, holistic approach increases the potential for real impact. The Harvard Business School identified 4 types of corporate social responsibility.
- Environmental (impact on climate)
- Ethical (behaving in a fair and ethical manner)
- Economic (values and the desire to do good are at the centre of financial decision-making)
- Philanthropic (the aim to make the world a better place, often by charitable giving).
From the boardroom to the customer service team, everyone in the business can be part of delivering on these values, in the way they work.
More than a slogan
So being a purpose-led business is not about sticking a hard-hitting slogan on a t-shirt. And it must extend beyond using recycled packaging, for example. This is so much more than making an easy gesture towards “doing the right thing”. To be truly purpose-led, the desire to make a positive impact should be embedded throughout all aspects of the business. Just as consumers are on the alert for cynical “green-washing”, using “purpose-washing” as a marketing strategy without the values behind it risks reputational damage.
Putting purpose to the test
Accreditations such as B Corp give businesses a rigorous framework against which to measure and demonstrate their social and environmental impact, and many big brands are now wearing their B Corp credentials with pride. There are now almost 8500 certified B Corps across 96 countries. And consumers are taking notice; 69% of people who were aware of B-Corp said certification positively affected their purchasing decisions.
Good for Business
So, by demonstrating how their purpose shapes the way they do business, brands earn both consumers’ loyalty and their spending. Customers want to get involved and feel part of positive impact on the world. In fact, 75% of customers are more likely to buy from a brand with purpose.
Schemes such as B1G1 enable customers to choose which good cause they support through their spending, deepening their sense of connection and involvement. These platforms also make the donation process easy for businesses, by providing the giving mechanism and vetting potential recipient projects.
Good for the team
Giving does not only need to be in the form of cash either. There has been a huge rise in paid volunteer days in UK businesses since 2022. Volunteering whether through litter picking, skill-sharing or even virtual acts of kindness, don’t just have a positive impact on the community. Engaging in volunteering has been shown to increase a sense of connection and strengthen company culture. Employees value a sense of purpose at work and the opportunity to give back strengthens loyalty.
Giving Back
Purpose-led businesses are successfully balancing the need to make a profit with giving back. Indeed, that shared sense of purpose can be the glue that binds customers, team and business together for the benefit of our community as a whole.
