Businesses must get serious about purpose beyond profit, or risk losing market share
● 73% of consumers more likely to buy from purpose-driven brands
● 54% believe a legally-binding purpose is best way to prove a company is serious about purpose
● Free government-backed tool Purposely helps businesses simply embed their purpose
London: Today sees the launch of Purposely, a free government-backed digital tool that helps businesses to simply embed purpose. The launch coincides with a rise in consumer demand for more businesses to put purpose before profit, with new research – launched alongside Purposely – which shows that almost three quarters (73%) of consumers are more likely to buy from brands that do so. Amongst millennials, this figure is even higher, with 81% more likely to buy from purpose-driven brands, demonstrating the importance of corporate purpose among 18-34 year olds.
Purposely was designed and created by UnLtd, the Foundation for Social Entrepreneurs, in partnership with law firm Bates Wells Braithwaite (BWB), and with strategic support from the Department for Digital, Culture, Media & Sport (DCMS).
The first-of-its-kind tool helps founders, entrepreneurs and third-party suppliers and service providers to embed a company’s purpose into their governing articles. By making it easier for businesses to have a legal commitment to social purpose, companies will be able to redefine what success looks like beyond profit and create a duty for Directors to act in line with this purpose for years to come.
The launch follows the findings of the government’s 2016 Mission-Led Business Review, which showed that there is an appetite for purpose-driven businesses, but also a lack of knowledge as to how to effectively embed purpose within the DNA of businesses. The research, conducted by Message House, shows that two fifths (40%) of consumers believe purpose is used for corporate spin and marketing, damaging their chances of wanting to buy from those brands who fail to truly embed their purpose.
Similarly, according to this research, almost two thirds (61%) of consumers have called out brands for not ‘walking the talk’ and failing to back-up their purpose with action. Simply publishing a company’s purpose on the website is no longer enough, with less than a third (30%) believing that this is an indicator of a brand taking their purpose seriously. As few as 29% and 28% respectively see the value of adding a purpose exclusively to the company’s physical product or including it in its marketing materials. On the other hand, making purpose legally binding came joint top in a list of methods for proving that a business is serious about purpose, with over half of consumers (54%) favouring this option.
Tracey Crouch MP, Minister for Sport and Civil Society, commented: “There is huge potential for businesses to play a significant role in society by broadening prosperity and tackling inequality. As the Mission-Led Business Review showed, many business leaders recognise this but are often unaware that company law already allows them to commit to a purpose beyond profit and build this into their governing documents.
“This is why the launch of Purposely is so important. It offers business owners a simple and authentic way to take the first step in putting purpose at the heart of their company.”
Mark Norbury, CEO at UnLtd, added: “Purpose is crucial in business because it enables entrepreneurs to build companies that truly reflect their vision, values and ethics. For some entrepreneurs, this means putting a social or environmental purpose as the core driver of their business. For others, it means delivering social impact alongside commercial goals.
“Our new research makes crystal clear that purpose is about so much more than marketing. It needs to be embedded in the very heart of a business. Using Purposely will offer businesses several commercial advantages in the modern age - increasing trust in consumers, enabling businesses to recruit better talent, and helping founders to secure their vision and legacy in their organisation’s DNA.”
Luke Fletcher, Partner at BWB, added: “Embedding purpose within a company’s constitution is often felt to be an intimidating task for many business founders, owners and advisers. Purposely makes it easy by providing a tailored version of a company’s Articles that sets out each business’ own unique commitment to purpose - which should help it stay true to its purpose over time.”
Sacha Romanovitch, CEO, Grant Thornton said:
“Imagine a world where every business is a purposeful business. Where people and organisations can connect around shared purpose to unleash their full potential and co-create to see greater innovation and impact. We are seeing the growth of a new movement, where businesses collaborate with civil society to build an inclusive economy in which people and communities realise their potential. A vibrant economy where no one is left behind. Purposely is a simple and practical tool enabling organisations to put purpose into their company articles and the heart of their business – an important step on this journey!”
Purposely is accessible via a free online portal and asks users a series of questions about their business, before providing a set of modified company Articles based on their answers. This tailor-made legal framework legally obliges founders and business leaders to live aspects of their purpose, the scope of which is determined by how purpose-driven they wish to be.
Notes to Editors
What’s available for media?
- Exclusive quotes/comment from Tracey Crouch MP, Minister for Sport and Civil Society
- Interviews with UnLtd’s CEO Mark Norbury
- Interviews with the founders of select purposeful businesses, including: Ben & Jerry’s, Elvis & Kresse, JoJo Maman Bebe, Active Minds, Change Please
- Case studies of successful purposeful businesses
- Further data from UnLtd’s research
The impact of purpose
Jemma Phibbs, UnLtd social entrepreneur and the co-founder of School Space, which facilitates the letting of schools after hours, said: “[embedding purpose in our company articles] made it clear that our purpose wasn’t going to change if myself or my co-founder left. And it wasn’t going to change when we took on investors, which was key for us. In the process of taking on investment it was very clear that’s what they, investors, were buying into and there was no kind of ‘oh this is the vision but you know if you pivot two-years down the line you might change..”
Alex Stephany, co-founder and CEO of BEAM, which trains and helps homeless people into work, said:“When you are clear in your mind about what your purpose is, it makes decision-making easier… The whole culture of an organisation flows from that fundamental purpose.”
Matt Haworth, co-founder of Reason Digital: “We changed our articles so we could embed the values of the organisation in its governance. This has helped us steer decision-making in the business, including turning down work that doesn’t fit with our values while remaining profitable.”
Ben Atkinson-Willes, founder and CEO of Active Minds, said: “We chose a commercial structure so that we could take on investment. In order for our products to maximise their impact the business had to scale quickly; a more commercial approach with investment backing seemed like the most effective route.The main challenge was how to maintain the social mission without being too restrictive that it might put off future investors. I think embedding the social mission in the articles and committing to social impact targets as well as financial targets has helped us achieve this. Picking the right investors who value social impact is also key to maintaining this focus.”
Dr Matt Carter, Founder of Message House: "Our research shows the potential power of purpose but it also shows that purpose needs to be lived and embedded in the organisation for it to be truly credible"
Consumer attitudes towards purposeful businesses
Nat. rep. sample
% agree with statement - “I am more likely to buy from/engage with businesses that have a purpose beyond profit?”
% who feel the statement – “Purpose is used by businesses for marketing and corporate spin” – is closest to their own view
% agree with statement – “Claims about business purpose are often not backed up with any substance”
Purposely is a new business tool from UnLtd and DCMS, supported by Bates Wells Braithwaite. Launched in 2018, it allows entrepreneurs and company founders to embed and protect purpose in their company’s governing articles.
Accessed through the web link getpurpose.ly, the free tool offers a simple survey for entrepreneurs and provides amended articles of association according to the survey answers. These articles allow a company founder to clearly and simply specify their business purpose and then offers an easy way for founders to then register their purposeful business with Companies House.
Purposely ensures authenticity and delivers a focus on vision and values for company founders. There are numerous benefits to embedding purpose into company articles; allowing businesses to recruit and retain talent, defining success and securing a legacy.
Businesses with a purpose beyond profit are defined as those committed to fulfilling a social, economic or environmental need.
About UnLtd, the Foundation for Social Entrepreneurs
UnLtd funds and supports passionate and committed social entrepreneurs who are determined to tackle the key issues facing society.
UnLtd began in 2002 and since then has given out over 13,000 awards of support and funding, direct and through partners, to social entrepreneurs to start up and scale their impact. It supports individuals running ventures firmly rooted in delivering positive social change.
On top of this, UnLtd has developed a vibrant network of supporters in the UK and across the globe and is at the heart of a thriving movement for social change. Social entrepreneurs have solutions to some of the most pressing issues faced by society. UnLtd brings together insight and innovation from across the world so that social entrepreneurs can fulfil their potential to change the UK for the better.
For more information about the support offered by UnLtd go to www.unltd.org.uk
About Bates Wells Braithwaite (BWB)
BWB, founded in 1970, is a law firm that works for a wide range of businesses, social enterprises, charities, institutions, public bodies and high-profile individuals, across a variety of sectors. The breadth and quality of our work is acknowledged by the UK’s two independent directories, Legal 500 and Chambers UK, in 21 areas.
In 2015 BWB became the first UK law firm to be awarded B Corporation (B Corp) status.
In June 2014, BWB became the first City of London based law firm to be granted an alternative business structure (ABS) license specifically to provide a unified service to our clients. This transition confirms our ambition to be the advisors of choice in the rapidly developing arena of impact investing and social value, and reinforces BWB’s reputation for innovation in the legal and advisory marketplace.
BWB has over 250 staff and 38 partners, which means that we are large enough to provide a complete range of commercial legal services yet small enough to be able to provide a personal service to every client.
BWB was one of the first law firms in the UK to be accredited as a Living Wage employer.
About Message House
Message House are a boutique research and communications consultancy whose mission is to use smart insights to improve brand, corporate and political campaigns. Established in 2013 by Dr Matt Carter, Message House are experts in conducting qualitative and quantitative research with audiences around the world
Posted on 07/02/2018 in BWB NewsBack to Knowledge