Business Purpose / Brand Authenticity - How to embed it into the business. Strategy must come from purpose, there is no single approach but whatever it is, it must be real and go beyond the about us.
Experts: Iyas AlQasem, Beyond the Quarter
Joanne Goddard, Green & Good Consulting
Facilitator: Danny Calogero, Lansons
State of play
Strategy must come from purpose, there is no single approach but whatever it is, it must be real and go beyond the about us.
- Why focus on value and purpose? Because it’s the right thing to do
- There is increasing regulatory pressure towards purpose, values, ESG and culture
- There is a correlation between purpose and value led businesses and their performance
- Customers and society are expecting organisations to lead with values however this is not yet a reality for many firms
What is purpose? Everything you do within organisation, within the asset management industry this is increasingly under the umbrella term ‘ESG’.
How can individuals add value to their own organisations? One way is by not just being internally focussed but rather looking at supply chains, slavery, reporting, measurement systems, what wider impact is the business having? How is the organisation communicating to management, customers, employees and society. Within the financial services space giving to charitable foundations is on the rise.
As asset managers increasingly consider ESG risks and issues within investment portfolios, there is growing focus on the broad practices which link to what they do every day. Translating purpose to core business aims can help businesses and their assets grow.
Delegates considered the idea that some asset managers believe they are launching and achieving great things when it comes to purpose and ESG however it can be just a product proposition and not fully embedded in the culture of companies.
One tool proposed by Iyas and Joanne was using a case framework to make purpose seem more real. A stakeholder purpose and values map which maps purpose and values against key functions.
Strategy needs to come from purpose. Organisations must learn how to identify risk and deal with problems when they arise. Research shows that it doesn’t matter what a business’s values are - if the business sticks to the values they have articulated and make them real, these companies outperform the norm – if companies have defined values and fail to make them real they are likely to underperform the norm.
It is interesting to consider the ESG ratings of various companies. From next year advisors are going to have to have to speak to clients ESG. One challenging area is that ratings agencies are all looking for different things, there is no one agreed one framework, however the industry is looking to make more frameworks more uniform. One way to overcome this is to look closely at the frameworks and what organisations such as the Sustainability Accounting Standards Board have to offer – using tools such as this, businesses can assess and monitor themselves and gain external accreditations.
The asset management industry is increasingly considering ESG when looking at investments, however delegates highlighted that, many clients are still confused – this underlines the need for transparency and clear communication so that accusations of greenwashing cannot be upheld. There is sometimes a contradiction between how many asset managers judge the management of the companies they invest in but don’t look at the management of the asset managers themselves. This is an area which clients are increasingly focussing on.
- Linking purpose to core business aims can help businesses and their assets grow.
- Businesses face a challenge when it comes to philosophically embedding purpose into their businesses.
- Research shows that doesn’t matter what a business’s values are but if the business sticks to the values they have articulated and make them real, these companies outperform the norm – if companies have defined values and fail to make them real they are likely to underperform the norm.