How to use ESG to Bring Your Purpose to Life

“As a ‘global corporate citizen’ we intend to conduct ourselves in accord with four capital-V Values: Respect, Integrity, Communication and Excellence.” A noble statement, perhaps even similar to one your own organization has shared. It suggests a company that is driven by a purpose to do good, and to be good. That is, until you learn that that company is Enron.

Purpose statements are having a moment, and the reason for their appeal is evident. They cut through complexity, providing a clear and simple north-star that tells the world, this is who we are. This is what is important to us. And when used effectively, a purpose can be powerful, elevating an organization from simply providing a product or a service, to having a lasting and meaningful impact on the communities in which it operates.

Research shows that purpose-led businesses are high performers, too. According to Deloitte, “Purpose-driven companies witness higher market share gains and grow three times faster on average than their competitors, all while achieving higher workforce and customer satisfaction.” The key, researchers found, was that purpose-led businesses have greater perceived authenticity, which enhances loyalty and longevity.

There are lots of examples of successful purpose-led businesses. Warby Parker disrupted a monopolistic eyewear market, with its purpose “to offer designer eyewear at a revolutionary price, while leading the way for socially conscious businesses.” Warby met its annual sales target within three weeks of launching, and was valued at $1.75billion prior to listing. But it didn’t lose sight of the second half of its purpose statement, and has distributed 4 million pairs of glasses to people in need. 

The Body Shop’s purpose is to “become the world’s most ethical and truly sustainable business.” After struggling under L’Oréal’s ownership, the global beauty chain has revived its purpose under Natura, with a commitment to “enrich not exploit” the planet, their products and their people.

However, many businesses struggle to bring their purpose to life. Drawn in by the appeal of a bold, ambitious statement, they flail when it comes to making that statement true. Even if your purpose feels authentic to your brand, it can be difficult to clarify the steps you need to make it the driving force behind every decision your organization makes. Unfortunately, a lofty purpose with no action behind it can have the opposite of the intended effect, generating distrust amongst stakeholders and impacting your brand’s reputation. 

This is where ESG can help. A holistic environmental, social and governance strategy can provide a reliable framework to bring your organization’s purpose to life. 

Here’s how to get started.

Align Your ESG Strategy with Your Purpose 

It may seem obvious, but often, an ESG strategy will be developed separately from purpose, and the two won’t always be in sync. The reason the Body Shop’s ‘enrich not exploit’ ESG strategy works so well is that it directly supports the organization’s goal to become the world’s most ethical and truly sustainable business.

What you will notice is that the Body Shop isn’t just focussed on creating environmentally friendly and cruelty-free products. It also recognizes the importance of supporting its people and being a financially sustainable business as well. The ESG strategy is the engine that drives the entire business forward, making its purpose authentic and believable.

Establish E, S and G Goals

The ultimate role of your ‘purpose’ is to speak to who you are as an organization. For that reason, it’s essential that it is more than one-dimensional, and fully represents the persona and values of your brand. Setting clear goals for environmental, social and governance sustainability demonstrates to your stakeholders that your organization is driven to make a genuine impact. 

Once you have a strategic direction for ESG, it’s possible to set specific, measurable goals. For example, a food company’s purpose may be “to create a healthier Ontario.” It might set a goal to provide 10,000 healthy breakfasts to school children in need by the end of the year. But, recognizing that the health of the planet affects the health of Ontarians, it may also create a new policy allowing staff to take a day’s leave to attend a climate rally, and knowing that working conditions have an impact on health, it may set a goal to have a fully transparent supply chain by 2025. In this way, the goals set help the company to bring its purpose to life in a way that is both holistic and authentic.

Communicate

As well as supporting your organizational decision-making process, a purpose communicates to your stakeholders who your company is and what you stand for. It’s a critical component of your brand, helping people to understand why they should do business with you – whether that’s purchasing a product, investing, or making a donation.

However, human beings have a knack for being rather sceptical of bold claims, so it’s important that you communicate regularly about how your organization is living its purpose. The old adage, “show, don’t tell” is key. Demonstrating to internal and external audiences what you have done (not what you’re going to) will be the proof-point they need to have confidence in the authenticity of your purpose.

Transparency is also critical. Being honest about how you did, including what you’re most proud of, but also places where goals may have slipped or things went wrong, is the most important way of building trust and showing that your purpose is more than a marketing statement. 

We’d love to know – has your business organized its purpose around ESG? Has ESG helped you clarify how to bring your purpose to life?