The second Purpose Summit of the British Academy’s Future of the Corporation initiative earlier this month opened with a disingenuous question: is there really anything to this ‘purpose revolution’?
Well, the illustrious panel confirmed, yes. The language may still be hesitant – soiled by decades of green-washed cynicism – but the reality is definitive.
Opening speaker Al Gore confirmed that ‘ESG funds’ – a term which still carries the hangover of less enlightened, tick box days – are the best performing and most resilient; their momentum carried by the uncompromising values-led ethos of young talent, ‘who are interviewing you as you interview them’ and will not settle for anything less than impact with integrity.
Colleague David Blood, Senior Partner at Generation Investment Management, was equally clear. “Historically, investment professionals have been evaluated on risk and return… But we’re certain that, going forward, we’ll be measured on impact.” His crucial point: ‘Businesses will no longer be able to ignore negative externalities like carbon emissions, inequality or injustice, and investors will no longer tolerate them. “Impact is part of the calculation of good investing,” he said. “The question is, are you measuring it? And how are you communicating it?”’
Lord Adebowale CBE, Chair of Social Enterprise UK, highlighted the tipping point of ‘mainstream purpose’ evident in the crush of socially focused start ups – appearing at twice the rate of other businesses – hailed the purpose ‘big bang’ of the 2020s which is all to play for in a post-Brexit global Britain.
And underpinning everything, Julia Hobsbawm OBE, Editorial Intelligence and Chair of the Workshift Commission, emphasized, is the point of radical alignment at which we have finally arrived: “a moment”, she argued, “when the worker and the boss is interested in the same thing. And that same thing is actually survival. We are in a health crisis. We are in a social health crisis. But for the first time…I think the tectonic plates are actually shifting.”
In 2019, the Initiative powerfully redefined corporate purpose. Businesses must exist to “profitably solve the problems of people and planet, and not profit from creating problems”. This definition is two years old, but more resonant, in our current crisis, than ever. The future corporation must be now – and given everything to lose and everything to gain, this must be within our reach.
Yet consider that Big Tech – who have profited handsomely from the pandemic while failing to meaningfully stem its flow – were, by December 2020, sitting pretty on vast cashpiles: Facebook, $62bn; Microsoft, $132bn in cash and short term investments.
To ‘build forward better’ with inclusive prosperity, as Arunma Oteh OON, former VP at the World Bank, argued, we must do better. This starts with leveraging the private sector. Alongside profiteering tech giants, capital markets have a critical role to play. $93 trillion languishes in the stockmarket; the vast majority either producing zero positive impact or accruing negative equity – a failing both unforgivable and stupid, she notes, when this capital could be poured into desperately needed resilient infrastructure.
Building forward better means amplifying the good, not just mitigating the bad. Purpose is a value multiplier, which is why Time’s External Rate of Return uniquely measures the positive impacts as well as the negative ones. This nuance – too often lost even in the most enlightened circles – is the catalyst which makes purpose both default setting and mass market edge, as social enterprises like Belu Water, which donates all profits to Water Aid, demonstrate.
CEO Natalie Campbell is uncompromising. “We intend to triple our revenue. We intend to triple our profit and the amount of money we can support Water Aid with. But that is not at the expense of our purpose.” Belu’s model, which ranks purpose, then people, product and profit, is competitive because of it. “If we get our purpose right, we align all of our people and get our products delivering in the way we should, we will be a profitable business. I see us as a challenger brand to any drinks business on the market.”
But the meaning of purpose in a post-pandemic world, in the end, is simple. In the closing words of Arumna Oteh OOH, who cited a South African proverb to her digital audience, let’s go together – so we can go further.