How can a well-defined corporate purpose be a force for good?
This article was originally published on Eco-Business.
Have you ever been printing an important document, only to find the ink getting lighter and lighter? And then comes the dreaded message from your printer: Low ink supply.
In July this year, tech company HP launched an ink subscription service that not only solves this problem, but does so sustainably as well. The service allows one’s printer to notify HP when the ink cartridge is running low. New ink cartridges will then be delivered to one’s doorstep, with a prepaid envelope for the used cartridge to be sent back to the company to be recycled. In this way, HP offers a convenient service to the consumer while doing its part for the planet.
This is just one of several recycling initiatives by HP, which has set out to be “the most just and sustainable technology company by 2030”. In 2021, it announced one of the most comprehensive environmental and social impact agendas in the tech industry — with aggressive goals focused on climate action, human rights and digital equity.
It aims to reach net zero greenhouse gas emissions by 2040 and to be a fully circular company powered by sustainable service models and designs. One of their schemes is the Planet Partners Program, a return and recycling programme for computer equipment and printing supplies that is available in more than 50 countries and territories worldwide.
HP provides a compelling example of how having a corporate purpose can create business value for a company while benefitting society and the environment.
The company estimates that the socially and environmentally-minded initiatives under its Sustainable Impact plan have helped the company win more than US$3.5 billion in new sales in 2021, which is a three-fold increase over the previous year.
Purposeful business is not at odds with generating business value, says Vivian Chua, managing director of HP Singapore. The presumption that any non-profit focused actions have little to no value has shifted to an understanding that “success goes beyond profitability, growth rate and brand recognition. Customers, employees and stakeholders judge a company by how its activities impact the community, economy, and environment at large”, she says.
Corporate purpose has become a buzzword in the business community in recent years. The previously dominant belief that the sole purpose of companies is to maximise profits at all costs is replaced by a more responsible approach of redefining profit around that purpose of an organisation.
Colin Mayer, a professor of management at the University of Oxford’s Saïd Business School put it powerfully in an article written for the World Economic Forum in Davos in 2020: “The purpose of the business is to produce profitable solutions to the problems of people and planet, not profiting from producing problems.”
This idea is gaining momentum. In a world emerging from the disruptions of the Covid-19 pandemic, more companies are reviewing their business models to reevaluate their purpose beyond profit-making and to consider their responsibilities to people and the planet. One way of doing so is by defining their corporate purpose.
The corporate purpose of a company is its reason for existing. It guides all that a company does, from business model and strategy, down to operations, policies and company culture. Previously, a company’s primary goal was centred around making profits for shareholders at all costs. But this has proven to be environmentally unstable and harmful to communities.
Now, more companies are redefining their corporate purpose to prioritise more social and environmental commitments.
In Singapore, the Alliance for Action on Corporate Purpose (AfA-CP) is one of the driving forces behind the corporate purpose agenda. To date, more than 40 members representing various stakeholders in Singapore’s corporate ecosystem have been participating in it.
Spearheaded by the National Volunteer & Philanthropy Centre’s Company of Good, the AfA-CP has been designing and developing Corporate Purpose: A Framework and Blueprint for Businesses in Singapore, which will be launched in January 2023. The proposed framework will provide clarity and consensus regarding the key principles, practices and indicators pertaining to corporate purpose, while the blueprint will serve as a roadmap for companies to implement and track their progress as purpose-driven organisations.
Alongside HP, another company that is part of the Alliance is Olam, a major food and agri-business company headquartered in Singapore. Its purpose, which has been conceived more than a decade ago, is: “Re-imagine Global Agriculture and Food Systems”.
Joydeep Bose, group chief human resource officer at Olam International, tells Eco-Business that the company, which sources crops like nuts, coffee, rice, cotton and palm from a buying network of about 5 million farmers around the world, had acknowledged the impact of climate change on the agricultural industry more than 10 years ago. It also recognised that large sections of the world’s population were not getting enough nutrition.
“Zero Hunger is the second of the 17 SDGs. Unfortunately, a third of the food produced globally is wasted. Clearly it is a broken system. We in our position as a global food and agri-producer believe we must make a difference to this very complex problem,” he says.
One of their key solutions is AtSource, a digital platform that provides detailed information about the environmental and social footprint of its supply chains. The data offers customers more transparency and traceability in the products that they buy. Currently, the platform provides metrics to over 30 Olam products across 30 territories.
AtSource is divided into three tiers of data — AtSource, AtSource+ and AtSource∞ (Infinity) — with the different levels providing increasing information granularity and sustainability ambition. Currently, Bose says that there are “several hundreds” of individual subscribers to the platform.
Olam also hopes to support farmers from which these ingredients are sourced. Olam Direct is an app that Olam has built to allow farmers to get prices and transact directly with the company rather than going through intermediaries, which yields higher prices for farmers. The platform currently has 130,000 farmers across 13 countries, and operates in local languages.
For companies starting out on their journey towards corporate purpose, HP and Olam both agree that this decision should involve all stakeholders of a company, including employees and employers at managerial and operational levels. It is important that the identified cause speaks strongly to the people at the company, so that they feel motivated to work towards it.
Chua emphasises the need for a “strong internal team to facilitate and push through with this cause”. Once this cause has been established and put into practice, companies should set in place review processes to measure their performance and public perception on these issues over time, she adds.
This is consistent with Bose’s belief that “any business irrespective of scale will have opportunities to make long-term, positive impact in the ecosystem in which it operates”.
He adds that the company’s purpose should have “a close link to its area of operations”. “Furthermore, key to the successful execution of purpose is the process adopted,” he says. “A co-created process with the involvement of a large section of employees will ensure strong alignment across the organisation”.
Mr Seah Chin Siong, the co-chair of AfA-CP and chairman of NVPC, says: “There is urgency for Singapore firms to rethink existing business practices. We cannot continue to operate in the same manner – not at the expense of our environment, social cohesion and personal well-being. Businesses must commit to creating positive impact on our society and in all aspects for their stakeholders.”
He urges all companies to join the movement towards corporate purpose and to make their business a force for good.