Even the least ethical businesses have a purpose. It goes without saying that every company needs to make money in order to survive. Yet a business that puts profit over purpose is distinctly out-dated. As a term, ‘purpose-driven companies’ describe businesses that deliver services and products that specifically align with their values. At Reward, we care about businesses with decidedly ethical values. As an agency, we only work with companies that aim to better the planet. As such, we celebrate the undeniable rise of purpose driven sustainable businesses.
Purpose – it’s Good Business
At a time of great economic uncertainty for many, certain companies may think that ethical and environmental concerns are a luxury, not a necessity. However, these companies fail to see that sustainability is a crucial factor in how consumers engage with businesses.
According to the NYU Stern’s Center for Sustainable Business, american shopping habits tend towards ethical retail. When looking at how shoppers purchase consumer packaged goods (CPG), and when using data contributed by IRi, 50% of market growth from 2013 to 2018 came from sustainable products As a note – IRi uses data from bar scan codes at the retail checkout across varying industries. In fact, products that have a sustainability claim on their packaging accounted for 16.6% of the market in 2018. This is up from 14.3% in 2013.
Products that are marketed as sustainable grew 5.6 times faster than those that weren’t.
The facts speak for themselves: 50% of the world’s current population is under the age of 30. This is the highest youth population that the world has ever had. In the World Economic Forum’s Global Shapers Community Annual Report 2018-2019, the millennial generation sees climate change as the most critical issue that the planet faces. According to Futerra’s new research, 88% of consumers want brands to help them be more environmentally conscious and ethical in everyday life. In short, prioritising purpose makes for good business.
Purpose Driven Sustainable Business – Driven by Youth
It follows that in order to successfully appeal to younger demographics, sustainability needs to be at the forefront of a company’s mission. According to the 5WPR 2020 Consumer Culture Report, 83% of young people want brands to reflect their values. 76% of younger audiences want CEOs and industry leaders to take a clear stance on the issues that matter to them. About two thirds will boycott a brand that takes an opposing stance on an issue. In fact, Gen Z is already on track to become the largest generation of consumers, accounting for up to $143 billion in direct spending. However, young people are valuable to a business not just on the back of their own purchasing power but because they influence the decisions of their friends and family. If a brand is popular with Gen Z, then it will gain ‘cool’ status. According to a report by CASSANDRA, 93% of parents say that their children influence their household purchases.
Aiming for B Corp Status
With sustainability being both an ethical and brand issue, it’s no surprise that there are an increasing number of companing stricing for B Corp status. In fact, B Corporations were found to have grown 28 times faster than the UK economy had over the previous year. But what makes a B Corp? Founded in 2006 by the entrepreneurs behind AND1, B Corps are businesses that ‘balance purpose and profit.’ They are legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment. In fact, there are now nearly 4000 certified B Corp businesses across 74 countries, such as Patagonia, Natura and Ben & Jerry’s.
To be more specific, certified B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. Typically, B Corps works towards reducing inequality, levels of poverty, contributing to a healthier environment and creating high quality jobs with dignity and purpose.They represent a shift in the culture – both in regards to the conscious consumer and eco-minded industry leaders.
In order to qualify for B Corp Certification, a company must first complete the B Impact Assessment. The B Impact Assessment (BIA) is a free, confidential test that helps to measure a company’s positive impact on its workers, customers and the environment. As such, it assesses the impact of both a company’s day-to-day operations and overall business model. In essence, it’s a great indicator of whether a company qualifies as a purpose driven sustainable business.
An Evolving Market
Business is changing. Brands are working with consumers with increasingly high expectations of them. As such, it’s no surprise that growing numbers of businesses are working towards sustainability. In fact, according to the Stanford Social Innovation Review, more than 90 percent of CEOs state that sustainability is important to their company’s success.
The fact is that purpose driven consumers already dictate the market. Given that brands must reflect the values that these customers care for, it’s no surprise that purpose driven sustainable business is on the rise.