There is a growing undercurrent of business leaders, academics, consumers, and Netflix documentaries, talking about how a continual quest for profit is unsustainable. We are now using natural resources quicker than the world can re-produce them, creating an unbridgeable gap between the world’s richest people and poorest nations and celebrating the accumulation of wealth in a way which would make Gordon Gecko proud.
More than ever, customers are now prepared to call you out on your personal views and question your business ethics, environmental impact and the mark you leave on humanity. There are many companies out there that are doing good. Driven by purpose, socially conscious and focused on sustainability, they recognise that doing things right is the right thing to do. Whilst profit is essential to invest in employees, we investigate how these five companies use their beliefs to measure success in a different way.
Outdoor clothing company, Patagonia, is a globally admired and respected brand with loyal customers and employees. The website states it uses its resources – its business, investments, voice and imagination – to do something about what it believes in. Everything about the business ties up, from its core values to its ability to repair and recycle and, despite encouraging its customers to buy less, its profits haven’t been harmed. Patagonia’s supply chain links to its values by only using organic suppliers. Similarly, rather than hosting a series of one-off events, Patagonia donates 1% of its sales or 10% of its profits (whichever is the greater) to environmental causes and shows that CSR runs through its veins.
Riverford Organic Farmers
When you walk round Riverford’s state of the art offices in Devon, it is evident that owner Guy Singh-Watson’s ethical and moral stance is reflected in the way he does business. From using unsold vegetables in the employee canteen or distributing it to local charities, to having clipboards where staff can leave their views, one can see that equality matters. So much so, that in 2018 the company moved to an employee ownership model and addressed the inequality which exists between executive and staff pay (in wider society). Riverford also introduced a cap on the difference between the highest and the lowest paid staff, resulting in Riverford only hiring people that believe in its cause.
Fin-tech company, Auden, want to reinvent its relationship with money and has decided to take on the most toxic financial services product it could think of – pay day loans. Set up as a “for-profit social enterprise”, Auden aims to use technology to reduce the cost of borrowing to make a material difference to individuals who have to borrow. Auden is the first company in the UK to have fully incorporated the Governance Agreement published by Big Society Capital into its Articles of Association. With a Board which has served on different committees for financial equality, and a Board-level Head of Social Impact, the company’s employees are proud of what they do.
Underpinned by a sustainable circle of being owned by, lending to and investing in charities and social enterprises, Charity Bank measures its impact by whether borrowers can achieve their social mission. Rated as “Best for the World” in 2018 by B-Corp, Charity Bank has won several accolades in response to its ethical approach, being nominated for the values it upholds. By “following the money” and the impact it provides, Charity Bank has a clear criterion for decision making and evaluating risk. It also provides learning to charities on topics such as ‘How to be more resilient’ and ‘How to strengthen the Board’, working to improve these organisations through people, governance and strategies.
The Cheeky Panda
Measuring success by the numbers of trees saved and tons of carbon balanced, The Cheeky Panda uses the world’s fastest growing plant – bamboo – to make toilet roll. This company started with a holiday to South-East Asia where the co-founders saw how much bamboo was discarded and felt it could be repurposed into something else. In three short years it has become a number one best-selling product on Amazon, sold in 20 countries and clearly loved by its customers. The company is now valued at £25 million and raised £1.3 million in just 48 hours.
Purpose driven leadership
A report by Deloitte found that 73% of people working in a purpose driven business are engaged. With younger generations seeking purpose over pay, it’s no wonder that companies with a focus on purpose outperform their competitors, having enhanced productivity levels and leaders who can get the best out of their people.
Purpose driven business leaders are the epitome of inspirational leadership; they rally people behind a cause, and they show individuals that what they do really does matter. Making it easy for people to understand why they’re in business and encouraging people to genuinely care about the business results in a shared common purpose for the company.
Purpose driven business leaders are the epitome of inspirational leadership; they rally people behind a cause, and they show individuals that what they do really does matter. The outcome of this is that their employees genuinely care about the company, demonstrate a greater level of empathy towards customers which rubs off on how customers perceive the brand.
These purpose driven leaders are courageous in their decision making as they are required to make complex decisions based on their ethical and moral views, which isn’t always easy. For example, deciding between whether to invest in a new product that could generate new profit but could also disgruntle core supporters and negatively impact the brand.
The five companies reviewed here have raised investment, reached wider audiences and gained higher customer and employee engagement as a result of what they believe and how they have chosen to lead their companies. Perhaps it is time we all reconsidered the wider impact we can make through purpose driven leadership.