SUSTAINABLE PURPOSE

This website reflects the shared insights, view and experience of twelve purpose and sustainability advisors who met in November 2018. It aims to guide leaders and contribute to the dialogue on how best to integrate thinking and practice on organisational purpose and sustainability.

The Decisive Decade

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The wider context in which companies are operating is rapidly changing. Recent findings, such as the UN IPCC report, make it very clear that the 2020s will be the decisive decade if we are to avoid the catastrophic consequences of runaway climate change. The World Economic Forum’s report also highlighted profound social instability and environmental risks such as extreme weather events, biodiversity loss and ecosystem collapse, to the extent that according to AXA’s CEO, a "plus-4degrees world is not insurable." Such trends will profoundly reshape the economy and society and ultimately determine the viability of business itself. These imminent interconnected ‘global challenges’ that need to be resolved to deliver a better future for all, are addressed by the UN’s Sustainable Development Goals.

 
System Failure

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Addressing these challenges and avoiding ‘runaway collapse’ will require a co-ordinated, systemic response across civil society and both the public and private sectors (i). However, the lack of adequate global legislation and standards to provide clear ‘rules of the game’ for a viable global economy coincides with growing nationalist and populist politics. And while capital markets are waking up to these global challenges, they continue to operate in largely short-sighted and dysfunctional ways. The misallocation of capital results from a failure to properly integrate environmental and social costs into companies’ profit and loss statements (ii).

The Business Imperative

The result is that the unintended consequences of business-as-usual are undermining the very viability of business. In this regulatory vacuum, businesses can no longer leave it to markets, governments or a relatively weak civil society to respond to these challenges. It’s in businesses’ interests to take an urgent and proactive role in delivering the transformational change required.

The immediacy of these global challenges exerts an imperative on any company that wants to adapt to a viable future, as no business can thrive long-term in an unsustainable world. Businesses need to demonstrate that they are a force for good. And people expect them to: a view amplified by technology and a level of connectivity that enables transparency and much faster scaling of citizen action (iii).
 

Dilemma

On the one hand, most companies feel compelled to maintain profit as the primary goal, based on the assumption that this is compatible with continued access to the talent, capital, customers and trust they need. On the other hand, they are increasingly expected to recover the mindset that puts people and society at the heart of business success - and then reflect this in the core of the business. Profit then becomes the consequence and lifeblood of a well-run business, not its purpose. The concepts of organisational purpose and sustainability are central to delivering the long-term benefits of this second option, through (iv):

• identifying long-term value creation both for the organisation and for society, in ways that support the planet;

• improving business performance and differentiation;

• building trust and reputation with stakeholders, especially customers;

• attracting and retaining talent; and increasing employee motivation and wellbeing.