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What now for Purpose?

In light of the IPCC’s latest climate report released this week, Nilesha Chauvet, Managing Director at GOOD, states that now more than ever, the world needs brands and businesses to be completely transparent if they are to help solve its most urgent problems.

Just four months on from COP26, a study of 25 corporations in the Corporate Climate Responsibility Monitor 2022 finds that only one company is meeting its net-zero pledge. But net-zero is now considered the bare minimum (net-positive being the expectation; in-setting, not off-setting, being key). Most are failing to live up to promises made. Businesses are routinely exaggerating or misreporting their progress, the report claims.

The issue is that brands and businesses have made promises in a bid to keep up with external pressures – from consumers, shareholders, and investors. As pressure to evidence claims increases, and with Brand vigilantes on the watch-out, we’re likely to see more instances of companies being held to account. Backlash will be severe.

Already in the press: Tony’s Chocolonely, criticised for instances of child labour found in supply chains. Brewdog under fire for its toxic and misogynistic work culture, thereby undermining its B-corp status. Oatly, for a stake sold to Trump-linked Blackstone, accused of contributing to deforestation in the Amazon. Coca-Cola for its 100 billion bottle problem – and not doing enough to collect them for recycling each year (nor doing nearly enough, generally, to clear up the mess they’ve been responsible for creating in the first place).

Claiming good and not following through – or worse still, being hypocritical, is considered worse than doing no good at all. The challenge is that some businesses have overpromised. Others have deliberately fudged. Most have not made enough effort to change or commit to changing policies and systems to make much-needed shifts in their business operation. Then there are those businesses who are, understandably, confused. Responsible regulators just can’t keep up.

Today, we’re trying to make sense of war, climate change, extremism, inequality, racism, diversity and inclusion. We’re still reconciling the seismic economic and cultural shifts brought on by a global pandemic with a desire to maintain some semblance of normality. Many of us are left breathless by the acceleration of tech and digital, grappling with the anxiety brought with it. But what the world needs now is truth and radical transparency to help move us to a better outcome than the one we’re heading towards. It requires businesses and brands to be honest about where they are now, and what help they need to deliver the ambitious changes we all need them to deliver, to become a positive force for society and the environment. It calls for bravery in a cancel culture, where redemptive narratives are not the norm in social media. It needs us to face the fear of getting it wrong.

No business can achieve the task of balancing its commercial ambition with the environmental and societal need for change alone. They need the support of all stakeholders. But with trust in business leaders fast declining, we need a step-change. (5:1 Gen Z do not trust business to solve social issues, BBMG-Global Scan Report, The Gen Z Reckoning).

Authenticity is the power, the tool, and the approach to keeping investors, stakeholders, employees, and consumers, on board. Radical transparency is the key to rebuilding trust amongst all stakeholders. By being honest about responsible commitments and the real status of outcomes in the short, medium, and long-term, a business can coalesce stakeholders around their shared purpose and business ambition, thereby avoiding the Purpose pitfalls experienced by those who make Purposeful claims with no substance or investment behind them.

Honesty and transparency will always prevail. Given where we are in the world, we need to get radical.

No one said it was going to be easy, however. Aligning stakeholder values with business ambition can be a challenge. It can be slow. It can take time. Being good is a powerful motivation. The objective is not perfection since perfection can cause paralysis and heighten the fear of making mistakes. The objective is commitment and demonstration of Purpose. Now more than ever, clear, and concise communication is key to retaining the support of stakeholders (internal, external) and to keeping them actively engaged.

So rather than watch Tony’s Chocolonely melt under pressure, we ought to rejoice in their honesty and transparency about instances of child labour in their supply chain, because rather than absolve personal responsibility, they are working hard to remedy the issue. That’s radical transparency in action, and it’s what we need more of.

A culture of honesty, collaboration and experience exchange would do much to accelerate change. With the IPCC’s latest assessment on the impact of global warming and its conclusion that much of it is ‘irreversible,’ Radical Transparency must now be a key focus.

Join us online for a GOOD seminar on Wednesday March 16th 2022, at 3pm on Radical Transparency. We’ll help bring clarity to ‘Purpose’ to give responsible leaders the confidence to act.

GOOD is joined by: Alex Edmans, Professor of Finance at London Business School, and author of ‘Grow the Pie – How Great Companies Deliver Both Purpose and Profit’.

Register to attend. Please note this event is for brands and members of the third sector only.