Why Businesses Need Social Purpose
We begin our series with Andy Last, co-founder of strategic communications agency MullenLowe Salt, about the importance of incorporating social purpose within businesses.
Giles: Here we are with another one of our Future Business interviews, looking at futurism and sustainability in business with social purpose might be a good way to describe what we’re talking about today. I’m with Andy Last, I wonder if you’d like to introduce yourself Andy and then we’ll get into some questions.
Andy Last: Thanks Giles, so I run an organization called Salt acquired by MullenLowe a few years ago so it’s MullenLowe Salt and we advise businesses on how to use purpose and sustainability to improve their performance and have done for the last 15/16 years. I wrote a book about it called ‘Business on a Mission, How to Build a Sustainable Brand.’
Giles: Yes, it’s in front of me. and this, this was a second edition based on what’s happened over the last.
Andy Last: Excellent. This was a second edition based on what’s happened over the last two or three years, not just the impact of the pandemic, but on how investors have really got onto this agenda and they’re driving, I think the accelerated change we’re seeing through acknowledging the climate change through investors is creating real urgency for change in all businesses.
Giles: Fantastic. Okay, that all sounds great, diving into my question list, I wanted to ask you why you feel this is in businesses commercial interests to put a social purpose at their hearts. I might pre-empt that actually by saying that I think we all understand the kind of the ESG and the CSR requirements nowadays which drives some of that stuff. So I don’t know if there’s anything else you’d add beyond ESG and CSR to slightly deepen that question a bit.
Andy Last: Lots, I think that there are lots of reasons to do it and funnily enough as I say, we’ve worked in this space for 15/16 years, and not once have we ever argued or I ever argued that businesses need to do this because it’s the right thing, I mean it is the right thing and then it feels good to be doing it, but actually they are very sound business drivers for doing so. We’ve identified four key business drivers for engaging more fully in purpose and sustainability and a social purpose in particular. One is to improve sales. So there is very clear evidence. We’ve seen multiple examples, whether you’re a business to consumer business or business to business organization embracing a social purpose, business to consumer gives you preferential positioning in store and online and in a business to business increasingly, requirements in Tenders and RFIs to demonstrate your social and/or environmental credentials and the opportunities that gives you to build stronger relationships with your customers. It’s a very clear sales driver. Marketing, probably the most commonly talked about but the ability a social purpose gives you to have more engaging content that delivers more effective marketing and gets other people to share your contacts and increasingly fragmented digital environment. Third one is around your license to operate and whereas you know 20/30 years ago your license to operate was determined by regulators and rules now, that is a social licence to operate, that is often decided in the court of public opinion and engaging demonstrating your social usefulness to the world is a way of maintaining a strong license to operate. And the fourth one is around talent and employee engagement and how a clear social purpose delivers, makes you a magnet for talent, retain your stuff and increase productivity and there are so many surveys out there of millennials and Gen Z and anyone will know that when they’re interviewing new people for roles that they will ask the company about what about what their social purposes, what they do about the environment and some industries finding increasingly hard to attract talent for those reasons. So sales, marketing, license to operate and employee engagement, all of which are now being captured by sort of investors, say, unless you have a clear plan, climate change unless you understand your relationship with society you’re going to be a bit too risky for us to invest in.
Giles: And then we come on the kind of the ESG and the divestments and CSR elements that I kind of touched on in the beginning. But I think those are quite well understood in the corporate sector now. Actually, I think the sense of what ESG does and how it’s driving global green finance, it’s just moving ever more quickly at the minute. So I think for our audience, that’s a fairly well understood concept.
Andy Last: Well, I sent it was interesting. COP26 in Glasgow in November felt like a finance conference which tells you everything.