Corporate Purpose, Values
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Research & Tools
Deep Green: How Data, Technology, and Collaboration Will Drive the Next Phase of Sustainability in Business (Cognizant) — Explores how businesses are increasingly embedding sustainability into their core cultures (i.e. becoming “deeply green”). This survey of 3,000 executives from a diverse set of markets and sectors finds (May 2023):
- The number of respondents who expect their sustainability efforts to drive stronger financial performance more than doubles between now and 2025 (from 31% to 65%);
- The most important drivers for sustainability are: doing the right thing for society and ensuring economic sustainability (59%); improving business performance (57%); and demonstrating action to the investment community (45%);
- 66% of respondents said their sustainability focus is on internal operations;
- Between 2020 and 2025, the percentage of respondents increasing their sustainability spending by 10% or more nearly doubles (from 26% to 51%);
- 62% say they are currently sourcing assets, products, components and raw materials that require less energy, and by 2025 42% aim to select suppliers that have “a net positive impact on the environment;”
- 62% believe that significant technological advancements are needed to achieve net-zero compliance; and
- Only 32% reported incentivizing employees at all levels to improve sustainability in their workplace. However, 71% identified incentivization as the most effective method for promoting a cultural shift towards sustainable practices.
Investing in Society: 2022 Edition (CECP) — Provides quantitative and qualitative analyses of the “current state of corporate purpose” among the Fortune 500. The newly released edition examines trends related to ESG metrics and disclosure, and summarizes corporate performance in the CECP ESG Scorecard, which breaks down 22 Key Performance Indicators; and CECP’s ESG Factor Analysis, which offers a way to determine positive or negative ESG performance. The analysis folds in CECP’s thought leadership and a review of current opinion research spanning sectors. For the period between 2018 to 2020, CECP reported several significant findings, including (May 2022):
- Fortune 500 companies with net-zero emissions targets rose from 2.9% to 31.6%
- The percentage of company boards with a dedicated Sustainability Committee increased from 41% to 59%.
- Community investment nearly doubled from a median total community investment of $27B in to $45B.
- The number of companies actively managing social supply chain issues—such as supporting human rights or eliminating the use of child labor—increased from 71.3% to 82%.
- Women’s representation in management barely increased from 29% to 30%, and representation in the workforce overall increased less than 1%.
- Despite high numbers of companies having diversity and inclusion initiatives, the percentage of minorities in management positions across all sectors increased only 1%, to 26%.
The Purpose Action Gap: The Business Imperative of ESG
(Barkley, Jefferies) —
Analyzes shifts in consumer and brand values around the role and importance of ESG,
based on 3 studies of consumers and C-suite executives.
95% of consumers believe “ESG is as important or more important than 12 months ago” and are more willing to act when brands make sustainability
affordable and accessible.
98% of companies believe “acting on ESG-related issues is more important or much more important than it was 12 months ago,” though 20% are “very” ready to speak with investors on ESG-related topics. (Aug 2021)
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The Impact of Pandemic & Racial Justice Movement on CSR (Association of Corporate Citizenship Professionals, Rocket Social Impact) — Reports the pandemic, the economic decline, and the racial justice movement amplified demands for CSR, particularly racial equity, across corporate disciplines. Key findings (June 2021):
- 64% of the 100 CSR leaders at 100 companies surveyed said racial justice is now a long-term CSR priority, with increased funding for 45% and more integration of CSR with DEI initiatives for 79%
- 53% are funding new nonprofits that have a racial-equity mission
- 15% saw CSR team growth
Investing in Society (CECP) — Based on CECP’s engagements with over 200 large companies, it assesses the corporate sector’s progress towards being increasingly purposeful and stakeholder-driven. Insights organized in five priority areas (April 2021):
- Priorities: Corporate purpose leadership priorities in 2021 involve CEO advocacy, bridging divides across opposing groups, updating their purpose statements, rethinking work/life balance, and focusing on the health, well-being, and skills of their employees
- Performance: Companies are increasingly integrating ESG metrics throughout the business, showing evidence of a shift towards long term, sustainable value
- People: 45% showed improvements in diversifying their employees and management teams, and 73% predicted their 2021 DEI budget would increase
- Planet: 69% had a positive impact on the environment by reducing their GHG emissions, total electricity consumption, and the amount of energy used
- Policies: 56% made progress in their efforts to improve compensation transparency and accountability. Companies also improved acting on the idea of integrated corporate governance as the number of companies with a CSR/Sustainability (or related terms) committee on their Board rose 14% between 2017 and 2019
JP MORGAN CHASE — CEO Jamie Dimon said the business sector should be a “responsible community citizen” in his annual shareholders letter and noted that “companies have an extraordinary capability to help...not just with funding but with developing strong public policy, which can have a greater impact on society.” (April 2021)
“Leading With a Sustainable Purpose” (University of Cambridge Institute for Sustainability Leadership, November 2020) offers insight into how four multinational companies — DSM, IKEA, Interface, and Unilever — developed, aligned, and integrated a purpose and strategy to transition to a sustainable economy. The report also highlights 10 principles to help guide business leaders through this process.
Purpose Playbook (Shared Value Initiative, April 2020) provides practices, action steps, company examples, and workbook exercises to help companies better understand how to use their core business to drive societal change and enhance their competitiveness.
"Purpose: Shifting from why to how" (Arne Gast, Pablo Illanes, Nina Probst, Bill Schaninger, and Bruce Simpson in McKinsey Quarterly, April 2020) distills "inspiring steps taken by forward-looking companies" and early thinking about the road ahead.
BSR launched an effort in 2019 calling for a "modernized social contract for the 21st century," and is working through the COVID crisis to modernize the social contract and create a plan of action. (April 2020)
"Demonstrating corporate purpose in the time of coronavirus" (Bill Schaninger, Bruce Simpson, Han Zhang, and Chris Zhu, March 2020). "As boardrooms become war rooms, a handful of principles can help guide executives in shaping a critical course of action and building a powerful sense of identity and purpose that will long outlast the immediate crisis."
"Making Stakeholder Capitalism a Reality" - Laura Tyson and Lenny Mendonca argue that "the recent push by big business in favor of a more socially and environmentally conscious corporate-governance model is not just empty rhetoric. With the public losing trust in business and markets, it is now in everyone's interest to reform the system so that it delivers prosperity for the many, rather than the few." (Jan 2020)
Social Contract
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“The Social Contract in the 21st Century: Outcomes so far for workers, consumers, and savers in advanced economies” (McKinsey Global Institute, April 2020) analyzes the shifting economic outcomes for different groups of individuals across 22 advanced economies in Asia, Europe, and North America. Key findings included the following:
- Employment among working-age people increased by 45 million in 2018, compared to 2000 levels. However, the number of people in middle-skill, middle-wage occupations dropped by 7 million in 16 European countries and the United States between 2000 and 2018.
- Average wages grew just 0.7% annually across 22 countries between 2000 and 2018.
- 20-30% of the working-age population now engage in independent work.
- Rising housing prices, higher healthcare and education costs, and more spending have absorbed between 54-107% of the gains in income for average households in Australia, France, the United Kingdom, and the United States since 2002.
- The average person can work six fewer weeks a year and consume the same amount in the clothing, communication, furnishing, and recreation categories compared to 2000.
- Real median net wealth has not recovered in 13 countries since the financial crisis; it declined from $104,371 to $80,659 on average between 2007 and 2018 and has only just started to rise again.
Collaboration
Collaborative Approaches to Corporate Purpose
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Vision 2050: Time to Transform — WBCSD and over 40 of its members—including 3M, BASF, Microsoft, and Unilever—released an action agenda based on 9 “transformation pathways” essential to a sustainable and prosperous future. The pathways cover business areas essential to society: energy; transportation and mobility; living spaces; products and materials; financial products and services; connectivity; health and wellbeing; water and sanitation; and food. Each pathway includes 10 action areas for companies to take over the next decade. (March 2021)
The World Economic Forum issued a new “Davos Manifesto,” which declares that the universal purpose of a company in the fourth industrial revolution is to “engage all its stakeholders in shared and sustained value creation.” The Manifesto was designed to guide conversations at the January 2020 Forum. (Dec 2019)
A group of 181 CEOs participating in the Business Roundtable have signed a joint statement committing to lead their companies for the benefit of all stakeholders, including customers, employees, suppliers, communities, and shareholders. (Aug 2019)