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Taking stock: one year after the BRT’s statement on the purpose of a corporation

Paul

by Paul van Schie

Sustainability and purpose sentiments are as unpredictable as the weather.

As gloomy sustainability news alternates with positive reports on corporate investment, legislation and technology on the daily it seems that as with all global issues, one must choose between an optimistic and pessimistic outlook on the future.

In line with most of the influential purpose-driven leaders, we opt for an optimistic view. Herewith agreeing with Paul Polman who said that “An optimist and a pessimist lead the same life. I prefer the life of the optimist. Pessimism doesn’t lead to anything but an abdication of responsibility. What we need is two things: optimism and hope, together with some degree of courage.”

Despite our positive mindset, we were still positively shocked when 180 corporate leaders officially recorded their role in the much needed transformation towards a more sustainable economy by signing the Business Roundtable’s statement on the purpose of a corporation in August 2019.

It was widely accepted as a breakthrough in purpose-driven thinking by corporations. Also, the widely supported view on stakeholder capitalism brought forward at the Davos 2020 World Economic Forum was reviewed as a leap forward.

A year has passed, and needless to say a lot has happened since. Have the corporate organisations managed to live up to their promises amongst all the turmoil?

The short answer is that although purpose and stakeholder capitalism seem to have taken off as topics of discussion, and some action (SAP, member of the BRT, wrote this article) has unequivocally been taken, their is no decisive evidence for system-wide change.

At the same time, systems change takes time, and only a fraction of sustainable decisions are truly visible. And even if impactful action is being taken, what would be its bottom-line contribution to a sustainable and liveable planet for generations to come?

Consumers’ faith in organisations as forces for positive change is high, as well as their demand for sustainable products and meaningful work. With this, there is a solid foundation for purposeful transformation.

According to Edelman’s latest trust barometer, If one thing has become clear over the past few months, it is that the bar for businesses to act according to multi-stakeholder principles is higher than ever before.

All we need to do now, is act.

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