For corporate leaders considering how to be more purpose-driven, 2023 is off to an auspicious start. In January, at the World Economic Forum in Davos, instead of the usual focus on intent, we heard a significant commitment to action – in particular for corporates to further embed sustainability into the core business.
Then, in February, Shell’s board of directors were subject to a first-of-its-kind-lawsuit, alleging that the 11 directors have breached their legal duties by failing to bring their climate strategy in line with the Paris Agreement.
The suit points to the possibility of legal consequences for corporates who shirk their responsibility to properly manage risks associated with the climate crisis.
Those working in the impact space watch these developments with keen attention, because we’re highly aware what a difference corporate leaders can make in accelerating positive change for society and the environment.
A sustainable business is one that creates minimal negative impact – or potentially a positive impact – on the environment, society or the economy. Purpose-driven corporate leaders have the ambition to drive positive impact at speed and at scale so that their organization can become net positive to people and planet.
The impact space has plenty of ideas on how to empower that ambition.
Empowering the corporate journey to purpose
Europe’s impact community, including my organization, EVPA, has long supported corporate social investors (corporate foundations, corporate impact funds, incubators) to help them generate impact at scale.
Our activities have yielded successes and insights, and from this experience we now see a unique opportunity for corporate leaders to accelerate their journey to purpose.
As an increasing number of CEOs are seeking to define corporate purpose, they’re realizing the benefits for employees, customers, civil society and the planet. In the ‘polycrisis’ world, companies that actively transform their business with positive environmental and social impact in mind are likely to prove more successful and resilient, and generate more stakeholder value in the medium- to long-run.
Corporate leaders can become more impactful by creating more coherence between business and impact agendas, aligning purpose, sustainability and business.
More specifically, by integrating purpose in the company strategy and core business practices, they address internal and external stakeholders’ desire to attain exactly the sort of goals that impact stakeholders are working towards, such as the Sustainable Development Goals.
Like purpose-driven corporations, corporate social investors are also starting to think more collectively as they strive to achieve scale. I’ve seen first-hand what happens when corporate impact actors ditch traditional competitive mindsets and align around specific social and environmental themes.
Forty CEOs of multinationals recently pooled their funding in the collective impact investing fund, Water Resilience Coalition – a leap forward for global water stewardship. EVPA’s communities of practice in health and youth have gathered over 20 corporate members each, bringing together unexpected allies along the way.
Leadership isn’t just captaining your own ship anymore – it’s working with others to collectively guide the fleet. To stretch the metaphor a bit, leaders can sometimes find that useful crew members have been on the ship all along, in the form of corporate social investors.
Corporate social investors can be key allies
Corporate social investors are at the vanguard of understanding their corporate entity’s impact journey. They’re experts at deploying patient capital for social and environmental causes.
From our conversations with this community, we see the potential role they can play as a learning lab to make their company more sustainable and inclusive and facilitate the integration of purpose into business.
Because corporate social investors are at a unique vantage point between the not-for-profit and business sectors, and part of their work is to identify transformative social solutions with potential business relevance, they have a natural grasp of the changing external environment.
They’re strongly connected to the needs of civil society, the environment and government, and by design they have the space to experiment and innovate.
They may also represent an untapped opportunity for contribution to the ‘S’ in ESG as well as effective social reporting and evaluation.
Measurement is still an underdeveloped part of the social arm of ESG, as a recent report from HEC Paris and the Inclusive Economy Center discussed, so the need for real expertise and new strategies is pressing. Corporate social investors have been developing these strategies in the background for a long time, and it’s time to put their knowledge to use.
A big question is whether corporate decision-makers are sufficiently aware of this potential.
While we see a number of companies merging their Sustainability and Strategy departments, creating new roles like Chief Value Officer and Chief Impact Officer, the question of corporate readiness to become net positive to people and planet remains central – but unresolved – in many corporate organizations.
In that context, senior management buy-in for corporate social investors can make their pioneering ideas a reality; empowering them can accelerate the corporate impact journey and help the integration of purpose into business.
This is a blessed opportunity at a time when the new directive on corporate sustainability reporting in the European Union will ask companies for more transparency and shape more ambitious ESG and impact strategies with plans and indicators.
Bringing corporate social investors, corporate leaders and other corporate impact stakeholders together can help a company accelerate their transformation into a purposeful organization.
This is the idea behind Business of Impact: an opportunity to sit at the same table and exchange wisdom. From 15–16 May, 2023 in Venice, we’re gathering an international community of purpose-led leaders to discuss how to accelerate corporates’ positive contributions to people and planet. We hope you’ll consider joining us.
It’s an exciting time to be at the intersection of business and impact. As more goals become common between the two, a healthy and open exchange of learnings can help us achieve them together.
As EVPA’s Corporate Impact Lead, Sophie Faujour leads the organization’s corporate impact market development in Europe, supporting corporate and financial institutions in shaping their social investment strategies, benchmarking their initiatives, facilitating peer learning and enabling the co-funding or co-creation of projects through strategic collaboration. She is part of the National Advisory Board for Impact Investing in France and various local networks. Prior to joining EVPA in 2016, she occupied several senior positions at BNP Paribas.