RESEARCH REVEALS THAT COMPANIES’ FOCUS ON CORPORATE PURPOSE COULD BE CATALYST FOR CHANGE
The latest corporate research on FTSE 100 companies issued by stakeholder communications company Black Sun reveals that 88% of companies set out their purpose in their annual report and almost all of these have a purpose that goes beyond creating value for shareholders.
The research report, ‘Rewiring the Ecosystem of Resilience,’ emphasises that to truly drive the change that will be required for the future, companies need to focus on having a transparent relationship with their stakeholders and creating a more positive impact on a wider scale. The idea is that if this mindset is implemented, profit will follow. According to Black Sun, purpose has acquired a particularly important spot on the corporate agenda in recent times, with the Covid-19 crisis proving that companies with a strong sense of purpose have managed to shift their business model far more quickly.
“Topics that regulatory and legislative initiatives are trying to address – such as aligning purpose, culture, behaviours and strategy – are being severely tested in business today. Now, more than ever, businesses need the trust of their stakeholders and society at large to prosper over the long-term, so reporting in a transparent and credible way is now an obligation as well as an opportunity,” says Sallie Pilot, chief insight and engagement officer at Black Sun.
Although the research reveals that more steps need to be taken towards integrated management, with only 20% of companies beginning to discuss stakeholders in relation to strategy it is also shown that corporates have a good baseline to work from. 64% of chairmen discussing stakeholder engagement in their leadership statement and 87% of companies using non-financial KPIs in measuring performance. More importance is also given to sustainability in strategy and the recognition of climate change as a critical issue.
“A significant step that we’ve seen is that the sustainability and ESG conversations have changed. Although some companies are yet to show it, I believe many are starting to see a genuine commercial opportunity in aligning to sustainability themes and topics, not just adhering to them for the sake of regulatory compliance. We expect that the COVID-19 crisis will raise this even further up the agenda,” says lead corporate reporting consultant at Black Sun Anne Kirkeby.
Overall, ‘Rewiring the Ecosystem of Resilience’ gives a sense of optimism. It points to the fact that moving forward, there is a clear opportunity for more authentic and transparent disclosure as companies further explore key themes raised by society, investors, standard setters and other stakeholders.