It has now been a whole year since the first national Covid-19 lockdown started, a whole year since I sat in an office, a whole year since I attended a face-to-face meeting and a whole year of us all continuously adapting to the new norm. We were forced into this situation so rapidly, with little time to both mentally and physically prepare. Uncertainty and change have become so engrained in our everyday lives that it is difficult to identify just how much we have changed as individuals and as a society.
One thing that has been very clear to me is the shift to buying local, living more sustainably and giving back. Perhaps at a time when so much is outside of our control, individuals have embraced the opportunity to take control of their consumer habits and their impact on the world. In fact, a report by Accenture showed that 60% of consumers have been making more environmentally friendly, sustainable or ethical purchases since the start of the pandemic. 90% of those said they were likely to continue doing so.
The global coronavirus crisis alongside our domestic Brexit issues have also brought into focus the fragility of supply chains (think toilet roll, canned food and most recently pet food!). They have made us question our reliance on large inflexible corporations to deliver our most basic products and services. We have also seen a huge growth in the sale of vegan and eco-friendly products. UK food website The Vegan Kind has seen sales triple since the start of the pandemic, whilst UK children’s sustainable clothing firm Frugi, saw sales rise by 60%.
So, what does this mean for businesses?
Customer preferences and behaviours have very swiftly changed and the experts expect these trends to remain and become very much part of our post-pandemic ‘new normal’. Flexible and creative businesses have been able to take advantage of new opportunities that have arisen, adapting and thriving in the wake of these changes. The challenge for them now is to sustain that adaptability.
In the long-term, research shows that a great way to boost business resilience and growth is to place equal importance on people, planet and profit. B Corps* were 63% more likely to survive the last economic crisis than other businesses of similar size. This is likely due to their stronger relationships with staff, customers and suppliers and their ability to inspire each to adapt and grow alongside the clear business purpose, even in difficult times.
There are various tools and frameworks that can support businesses in reframing their purpose and performance indicators, including Social Return on Investment (SROI) and Triple Bottom Line (TBL) reporting. The free B Impact Assessment is a great tool to start businesses on their journey. There is growing concern however that businesses are using such tools as box ticking exercises to satisfy stakeholders. Customers, shareholders and investors are all becoming very wise to this though. The most important thing is to have a genuine, well thought-out and tailored purpose and to use these tools to help you achieve your goals.
It’s less risky to invest in purpose-driven business
In addition to consumer trends and resilience research, it is clear that investors are also acknowledging the direct correlation between financially thriving business and business purpose and ethics. Stocks of companies with strong performance on Environmental, Social and Governance (ESG) issues are often less volatile, have less risky financial policies and increased innovation. During the pandemic, these funds have outperformed traditional funds. The last few years have also seen a rise in socially responsible investment portfolios being offered to the mass market in a response to customer demand (for example on the Nutmeg platform). Due to both these factors, 2020 saw record investment into ESG funds, four times the amount in 2019. This is set to substantially increase as a growing number of (particularly millennials and Gen Z) investors choose to use their disposable income for good.
The bottom line
We have seen now from three different angles that purpose-driven businesses are well positioned to thrive in the new normal. They will benefit from an increasingly environmentally and socially conscious market. They will be more resilient to future economic or social uncertainty alongside their loyal and trusting stakeholders. They are also seen as the less risky option by investors (but still achieve high returns), and therefore maybe be more likely to be invested in.
So, if you are launching a new company or reviewing your growth plans, have a think about these facts. Do you have a genuine drive to improve your environmental and social impact? If so, put them at the forefront of any future strategy. Don’t leave them on the backburner and prioritise profit. Being purpose-driven will help to boost your business growth and long-term resilience, giving your business the best chance to thrive in the post-pandemic new normal.
If you are keen to get started on your sustainable business growth journey, join the Cheshire & Warrington Business Growth Programme team for our first ever ‘Sustainable Growth Bootcamp: Big Impact, Small Footprint’ in April. We will introduce you to triple bottom line reporting, measuring and communicating impact, and carbon footprinting amongst a whole host of other topics.
*Certified B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.
By Bryony Salter,
Business Development Manager