DOES IT PAY TO BE PURPOSE-DRIVEN?
You’ve no doubt heard an increase in the use of phrases like purpose-driven and triple bottom line but what do these terms actually mean and is it all just a fad?
Businesses that are driven by purpose will build their brand around a central belief or value. They focus on a triple bottom line that balances people and planet as well as profit. They exist not just to make money, but to use their business as a force for good.
As consumers, every time we choose to buy a product or service, we are choosing the kind of world we want to live in. We can choose to invest in companies making a positive impact or others whose main purpose is simply to generate profit.
A 2018 Accenture survey found that 64% of global consumers find brands that actively communicate their purpose more attractive. So, in order for brands to attract their ideal clients, they not only need to stand for something bigger, they also need to be open and transparent in how they communicate those values.
It’s not just about attracting the right clients though; balancing purpose and profit has a wealth of other benefits as well.
- Attract & retain the top talent in the marketplace
At companies that have clearly defined and communicated how they create value, 63% of employees say they’re motivated, versus 31% at other companies; 65% say they’re passionate about their work, versus 32% at other companies (PwC 2019). Employees want to feel a sense of purpose and pride in their work and studies have shown that this makes employees more productive too. If they don’t feel they’re contributing to something bigger, the chances all they’ll find somewhere else where they do.
- Set yourself apart from the competition
Sustainable and ethical practices within a business can no longer be a half-hearted add on but the good news is that if implemented correctly, these practices can make you stand out from the competition. 52% of global consumers say they are more attracted to buy from certain brands over others if these brands stand for something bigger than just the products and services it sells, which aligns with their personal values (Accenture 2018). If you’re not communicating an authentic message to your clients, they will go elsewhere. Authenticity is key here. Don’t get caught “greenwashing” (i.e. conveying a false message that you/your product/your service is eco-friendly when the reality is quite different) as that will destroy any trust and convey a very different message.
- Your business will grow
The world is changing, and business needs to change with it. That said, I really don’t believe that profit is a dirty word. There is nothing wrong with implementing an effective sustainability strategy that also supports business growth. In fact, the statistics show us that purpose-drive businesses tend to perform better financially as well.
- Brands with a purpose set on improving our quality of life outperform the stock market by 120%. (Interbrand 2017)
- According to Kantar’s Purpose Study, purpose-led brands had seen their valuation surge by 175% over the past 12 years, versus a growth rate of just 70% for listless brands uncertain of their role. (Kantar 2018)
- Researchers at the School of Management at SUNY Binghamton found that certified B Corps had an impressive 51% revenue growth rate during the 2008 financial crisis. (Yale 2018)
I think the key here is that making sustainability a part of your brand really can support business growth but it needs to be part of your DNA. So, in answer to my original question, yes, an authentic purpose-driven business really does pay and the stats are there to prove it.
If you’re interested in developing a triple bottom line strategy, take a look at the Sustainability Compass designed to provide you with a clear direction and create a tailored action plan to get you there.