It’s not enough for modern businesses to turn a profit anymore. Today’s consumers are becoming more conscious of their impact. A recent report from GoCardless for example, found that 50 per cent of Australian consumers take into account their environmental impact when paying.
Consumers are also looking to engage with companies that share their values, with a study from PWC in 2021 highlighting that 83 per cent think companies should be actively shaping ESG best practices.
On the flip side, younger employees are increasingly looking to work for companies that align with their values and create a positive impact. Value-driven companies are more likely to attract and retain top talent, by offering meaningful work that goes beyond a salary.
Purpose-led companies, organisations where their purpose sits at the core of everything they do, will attract such talent and customers. They are committed to creating long-term value not just for their shareholders, but also for their employees, customers, suppliers, and wider society.
This was the founding belief for WLTH, a business that was built on the premise that finance can be a driver of sustainability and social impact. The company revolves around protecting our oceans and marine life through a number of incentives that benefit our customers and the environment.
However, I know as a business leader, it can be challenging to carve out your own purpose- or your “ikigai”.
How to decide on a company purpose
Ikigai can be broken down into four elements, and it’s a great starting point to figure out your business’ purpose. These four components are what you love, what you’re good at, what the world needs, and what you can be paid for. Your purpose should intersect with each of these elements.
Creating a purpose-led company takes time, effort, and resources, but the benefits can be well worth it. It does not mean jumping on the bandwagon of a hot topic that will drive social media clicks, but instead discovering things that you and your team are passionate about. Your business’ purpose should align with your personal values, so start by thinking about what matters to you and what you stand for.
For me personally, this began at a young age alongside my brother Drew. Having grown up surfing at the beach, we became ocean conservationists without even realising it. Later, we excelled in our own businesses and as finance professionals, especially when it came to lending. We knew there was a niche in the market for a digital lending product that made a tangible impact on the environment. WLTH materialised as our solution to offer Aussies another option outside of the Big Four banks that focused on genuine change.
That model is underpinned by our mission to clean 50m² of coastline per loan settled, amplified by partnerships like Parley for the Oceans and SailGP. To date, our purpose has seen us give hundreds of Aussies the funding they need to accelerate their own wealth-building journeys, with over 550 loans settled so far and at least 27,500m² of coastline pledged to be cleaned.
Asking the right questions can help clarify what impact your business can make. If you’d like to expand that decision-making process, survey your customers to understand what issues they care about. Listening to your customers inadvertently drives brand loyalty.
Once you have decided on your purpose, it’s essential to create a clear strategy that aligns with your purpose and outlines how you plan to achieve your goals. This strategy should be reflected in all aspects of the company, from operations to marketing and customer service, and will help to create a consistent and authentic brand that reflects your purpose.
Make your actions and results clear
Purpose-led companies must establish an accountability process to ensure well-intended initiatives don’t become a flash in the pan. Defining KPIs that track the impact of your initiatives can help demonstrate genuine action on your part. This can include environmental or social impact, and financial performance. Regularly report on your progress and communicate your impact to stakeholders.
For example, some fintechs like Codat integrate with envirotech platforms to help financial service providers unlock clients’ carbon footprint from accounting data, while other platforms like Pathzero help companies and investors understand their businesses’ carbon emissions.
To amplify the impact of your work, consider partnering with like-minded brands and organisations. However, choose your partners wisely and ensure that they also authentically care about your chosen purpose, and aren’t just appeasing societal and economic pressures.
Falsifying or embellishing ethical initiatives for marketing purposes – “greenwashing,” can have serious legal implications, which the ACCC have cracked down on in recent months. In Australia, greenwashing may constitute a breach of several areas of the Australian Consumer Law (ACL), which prohibits engaging in misleading or deceptive conduct in trade or commerce and making false or misleading representations about goods or services.
On top of this, it’s a sure way to damage your relationship with customers and stakeholders and prevent long-term success.
It’s clear that business leaders have a real opportunity to be a force for good in the world, and while there may be commercial benefits when you lead with purpose, authenticity and accountability should be your north star.
Keep up to date with our stories on LinkedIn, Twitter, Facebook and Instagram.