Daniel Philips, Summer Placement Student, Royal Holloway University of London

This article was originally published on LinkedIn

We are starting to see businesses explode with interest in what it means to be purpose-led, and it seems that more sustainability-orientated generations are pressuring firms to catch up to this way of thinking.

A 2022 PwC report surveyed 4,446 CEOs from 89 countries across the globe and found that 22% of these leaders have pledged a net-zero commitment, but 57% of those who haven’t don’t believe their company emits significant greenhouse gases. Such stark results seem at odds with the fact that 75% of adults in the UK are either very or somewhat worried about the impact of climate change. It’s no wonder our trust in organisations making purposeful change is so delicate.

In their most recent publication, The Edelman Trust Barometer shows that respondents want businesses to play a more significant role than governments on societal issues, including climate change. In particular, 62% of 18-26 year-olds want to collaborate with brands on addressing issues, including racism, climate change and gender inequality. But it is not only the youngest workers – over half of all respondents (60%) choose their workplace based on the organisations’ alignment with their personal views.

Why is purpose so important to employment?

With a shift starting to occur, how can we support changes in the way businesses think, and what role will the next generations play a part in that? Let’s look at the importance of purpose in current and future employment.

One of PwC’s 5 ‘megatrends’, defined as trends changing how we do business, is demographic shifts. Millennials and Generation Z (‘Gen Z’) are starting to take over the workforce. According to the OECD Employment OutlookGen Z will make up 27% of the global workforce by 2025!

Both generations are socially aware and want to work for purpose-driven firms. Deloitte’s Global Human Capital Trends Report found that most millennials look beyond a company’s financial performance when deciding whether or not to work there. In addition, young people are leaving companies after short periods – one of the reasons for which is they don’t want to do work that is not impactful. What would happen if instead of feeling the need to leave – younger workers who are socially and environmentally driven were supported and empowered to help these organisations transition?

If companies don’t embody purpose, then these generations won’t hesitate to move on to a company that does. But, if purpose is so crucial in employing the next generation of workers, why aren’t more companies acting on it?

The Enacting Purpose Initiative, in collaboration with Saïd Business School (University of Oxford), Berkeley Law: Business in Society Institute (University of California), BrightHouse, Federated Hermes and The British Academy, discussed a framework for the board of directors in enacting purpose within the modern corporation, and identified the role of pressure as a catalyst for driving purpose-led change in firms:

“Corporate change tends to start with a growing drumbeat of evidence before an external shock catapults this growing drumbeat into a universal norm.”

Essentially, it takes growing pressure and a tipping point for purpose to be adopted by companies, whether it’s Greta Thunberg and the Extinction Rebellion triggering mass societal movements on climate change and global warming, or the COVID-19 pandemic to emphasise the importance of communities.

How can we support the next generation of purpose-led leaders?

Having a positive impact and embracing a sense of purpose is paving the way for attracting and retaining the next generation of workers. As we look to the next generation of leaders to stimulate businesses to become more purpose-led, we need to ensure that they are supported as much as possible to make this a reality.

I feel such changes be delivered through:

  • Investing in education by introducing more topics on social innovation in curriculums.
  • Electing young members to trustee boards and allowing them to contribute to shaping strategies and visions for the future. Less than 3% of charity trustees in the UK are under the age of 30, so providing opportunities to younger generations has enormous potential for enacting positive change.
  • Seeking inspiration from purpose-led trailblazers such as Paul Polman at Unilever (I’ve also provided a few fantastic book recommendations below on the importance of purpose-driven culture in businesses).

While many companies still have a long journey to become purpose-led – harnessing the enthusiasm and drive of their Millennial and Gen Z staff could be the key to accelerating change. As we know with sustainability issues, time is of the essence – it shouldn’t become the next generations’ burden when they reach the c-suite to make these changes when it may be too late. It’s time for businesses and current leaders to act and deliver purposeful change.

Further Readings:

  • Daring Greatly – Brené Brown
  • It’s Not What You Sell, It’s What You Stand For – Roy M. Spence Jr.
  • The Purpose Economy – Aaron Hurst