The inaugural Internal Communications and Engagement Awards are taking place in London on 13 May. Bladonmore has been shortlisted at the awards

Over three-quarters of the 200 richest economic entities on the planet are corporations, not governments, according to Global Justice Now. Add to that low levels of trust in official institutions, and you can see why there is growing pressure on companies to serve a purpose beyond the pursuit of profit: to take responsibility for tackling important social, economic and environmental issues, from gender equality to job creation to climate change.

Higher expectations are also being set by new generations. According to PwC, Millennials will represent 50% of the global workforce by 2020. They are the world’s most powerful consumer group and on the receiving end of the largest wealth transfer in history: $30tn over the next 30 years. What Millennials are looking for today foreshadows what others will demand tomorrow; they are demanding more from the companies they work for, buy from and invest in. In a recent survey of Millennial workers by Deloitte, 63% more favoured ‘improving society’ as the primary purpose of business than ‘generating profit.’

When Larry Fink, chairman and CEO of Blackrock, the world’s largest asset manager, sent a letter to CEOs of public companies in 2018, telling them his firm would consider social responsibility when making investments, it was hailed a watershed moment. But the idea of broader corporate purpose is now mainstream. The size of the impact investing market is estimated at $228bn and leading corporations are changing the way they do business in light of wider environmental, social and governance issues. Fink’s latest letter, published in January 2019, again urges CEOs to take leadership on issues “central to the world’s prosperity,” including doing more to ensure their workers have a good standard of living in retirement.

Purpose and profit are not mutually exclusive; in fact, purpose might be a source of competitive advantage in the long run. Research from the Harvard Business Review (HBR) and EY Beacon Institute, as well as BrightHouse and Boston Consulting Group, suggests that companies with a shared understanding of purpose significantly outperform their peers, thanks to a greater ability to attract and energise the best talent, unify management, employees and communities, inspire customer loyalty and streamline decision making. Speaking to the HBR, Hewlett-Packard’s chief marketing officer (CMO) Antonio Lucio (now CMO at Facebook) said, “Purpose becomes the compass against which you’re making decisions.”

Elsewhere on the corporate spectrum, multinational beauty chain Sephora has identified its purpose as “inspiring fearlessness.” Speaking to the same publication, the company’s head of marketing Deborah Yeh said she had been “blown away with how profound it was to get at a deeper meaning with employees. Every day they choose to put on their uniform and spend time in our stores because they believe their work is meaningful. They will leap over mountains for each other, our brand and our client.”

There is one big caveat to the positive relationship between purpose and long-term performance: it only exists when purpose is deeply entrenched. Many companies have invested time, money and effort into establishing their purpose, only to find the words never find life off the page. What’s your purpose? And how are you making it stick?

Shreena Patel is a consultant at Bladonmore

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