A strong, coherent and well-communicated corporate purpose can boost financial performance by up to 17% and build trust with stakeholders. That’s the finding from a new survey by PR firm Burson-Marsteller and business school IMD which ranks over 200 leading European companies according to the impact of their communications on corporate purpose.

The research looked at how companies think about and communicate their corporate purpose - mostly defined as mission statement and strategy - and how this impacts financial performance.

It found that communicating purpose is a growing trend as companies increasingly understand its impact on financial performance and the importance of their social role. Energy, pharmaceutical & healthcare and the technology industries score above the average mean while the banking and insurance sectors score below.

“Corporate purpose goes well beyond corporate responsibility. It is part of a company’s DNA; it is the reason for the company’s existence,” said Jeremy Galbraith, CEO, Burson-Marsteller Europe, Middle East & Africa. “Companies that have a purpose deeply embedded into their overall corporate strategy – and one which is well communicated and understood both internally and externally – will have a significant competitive advantage. Communicating on corporate purpose is one of the key strategic tools for managers seeking to build trust and reputation with stakeholders.”

Philips, Nokia, L’Oreal and BASF were recognised by a large base of stakeholders as the best in class in successfully differentiating themselves through effective communication on corporate purpose.