Charles Wookey, CEO, A Blueprint for Better Business
As part of our work we are often challenged to explain how business tools, including ESG performance measurement relate, to being purpose-led. This is still an ongoing discussion for us and so we are publishing this working paper to encourage debate and discussion.
Click here to read the Blueprint working paper on Purpose and ESG.
We are interested to hear your perspective on the role of ESG in business and how it relates to purpose. If you would get in touch with Blueprint about this or any other topic, please contact: email@example.com
As we know, societal expectations on companies to address both social and environmental issues are growing fast. Rising inequality is not a stable equilibrium any more than rising global temperature. Investors are increasingly seeking to assess companies through their “ESG” performance as a benchmark of long-term risk and corporate contribution to addressing these issues. However, the ESG landscape is also emergent and frequently disjointed, and presents the Board with a plethora of externally imposed reporting demands which are often inconsistent with each other.
I argue being ‘purpose led’ offers businesses a much more powerful and consistent way of thinking about these issues. Instead of focussing on risk mitigation, external demands and standings in ratings tables, Blueprint’s Five Principles invite businesses to bring together in its thinking:
- all the material relationships on which long term success depends;
- the business opportunities of creating value for society through sustainable business practice; and
- purpose-led innovation,
thereby delivering over the long term for both responsible investors and society.
Of course, a company can have a good purpose, and a strategy that follows from it, and yet still be exploitative in some of its relationships with customers, suppliers or communities. While some stakeholder relationships are more material to business success, being purpose-led means seeking to have a positive impact on all those whose lives are touched by the company, avoiding manifest unfairness to anyone. And as a guardian for future generations it demands an enduring and firm commitment to environmental sustainability. When well executed, being purpose-led means a company strives for excellence across all aspects of E,S and G.