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Why does ‘purpose’ matter in business?

Gemma Casey, Ecosystem Manager for Wales, NatWest Cymru, explains the importance of purpose to Welsh businesses.

If terms such as ‘furlough’ and ‘pivot’ featured high on the list of business lexicon for 2020, a contender for buzz word of this year must surely be ‘purpose’.

It’s not new of course; many businesses have always looked beyond the bottom line and striven to do good for their customers and communities.

In the aftermath of the 2008 global financial crisis, I recorded a package for the BBC’s business programme, Wales@work, at the How The Light Gets In festival in Hay-on-Wye. The discussion topic was the trend we were seeing towards businesses embracing stakeholder value, as opposed to shareholder value.

Yet now, in the wake of another, quite different, crisis, the move towards the triple bottom line – people, planet and profit – seems not simply to have accelerated, but to have undergone a truly seismic shift.

The Covid-19 pandemic and, hot on its heels, a growing awareness of the need for all businesses big and small to act now on the climate crisis, is prompting a collective consideration of what businesses are really there to achieve.

In her latest book, Rebuild: How To Thrive in the new Kindness Economy, the retail and brand expert Mary Portas argues that consumers are ready to put people and planet before profit. She describes this as the ‘Kindness Economy’, a “new value system” which challenges businesspeople to think about how they’ve been doing business to date, and to see the post-pandemic environment as an opportunity to reset.

Reflecting this trend, earlier this year we introduced a specialist strand to our flagship NatWest Accelerator Programme aimed at supporting purpose-led businesses. This has attracted participants from across Wales and across sectors, from start-ups who believe passionately in their purpose and are building their businesses around it, to more established businesses who have always known their purpose inherently, but who want to be able to better articulate and communicate it.

NatWest itself has gone on its own journey; working with charity A Blueprint for Better Business, we shaped our purpose-led strategy to ensure everything we do champions potential, helping people, families and businesses to thrive.

Coutts, part of the NatWest Group, proudly announced in July that it had become a certified B Corp. Certified B Corporations are businesses that balance purpose and profit. They are required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment.

Recently businesses on our purpose-led Accelerator Programme heard from James Ghaffari, Director of Growth and Product at B Lab UK, a global network which certifies B Corp companies.

Having started in 2007, to date the B Corps community includes more than 4,000 businesses in 70 countries and across 150 industries – including household names such as The Body Shop, Innocent, and The Big Issue and, from Wales, JoJo Maman Bebe, The Tyf Group and sustainable drinks brand Flawsome.

James said that 4,000 applications have been received in the past year alone, and he described us as “being in the middle of a global culture shift in the way in which business is done”.

The B Corp movement is, he said: “trying to help companies move from the 20th century idea of a business just driving shareholder value, towards a model which is more appropriate for the 21st century and the challenges we face. That’s a model of a business operating as if all stakeholders matter, and putting people, planet and profit alongside each other in the way they manage their day-to-day operations and the future vision of the business.”

B Lab offers an online impact assessment tool to help businesses measure their impact on workers, community, environment and customers. It can help a business to benchmark its current performance as well as get ideas of policies and practices they could adopt in order to improve. The assessment tool is free and confidential for businesses to use.

With COP 26 on the horizon, and pandemic-related uncertainty set to continue for months, now could be a good time to assess where your business fits into the brave new world which is emerging and take advantage of the many resources available to help you on the journey.