Published 1 year ago.
About a 4 minute read.
Image: Rodnae Productions/Pexels
Corporate Knights has developed the world’s ﬁrst rating system to assess companies’ implementation of their social purpose commitments. Its research finds that the gap between ‘say’ and ‘do’ varies from one company to the next.
Every day, more and more companies are committing to bettering the world by
acknowledging their role in addressing today’s most pressing issues — including
climate change and inequality. But if businesses are to succeed in transforming
the world for the better, their commitments must be backed up with action.
A new report published
by Corporate Knights, released today,
investigates how 34 ‘Social Purpose Businesses’ (defined as a business whose
enduring reason for being is to create a better world) with headquarters or
significant operations in Canada are implementing their purpose. The Social Purpose Transition Pathway: Helping Companies Move from “Say” to “Do” features both
public and private companies (including co-operatives and crown corporations) —
including BASF Canada,
Report findings suggest that while companies are increasingly stating a social
purpose, not all companies are as successful when it comes to implementing it.
In other words, the gap between “say” and “do” varies from one company to the
“What’s interesting is that, out of an initial sample of 197 businesses, only 34
clearly stated that they create value for
— and not just for their shareholders or customers. These are the 34 businesses
we selected for inclusion in the study; so, we’re really emphasizing that,
regardless of a company’s rating in this report, they’re already doing good work
and arguably ahead of the curve,” says Michelynn Lafleche, who co-authored
Join us for a transformational experience at SB Brand-Led Culture Change — May 8-10 in Minneapolis. This event brings together hundreds of brand leaders eager to delve into radical lifestyle shifts and sustainable consumer behavior change at scale. The trends driving cultural acceleration are already underway, and you can be at the forefront of this transformative movement.
To rate companies, Corporate Knights developed the world’s first rating system
to assess companies’ social purpose implementation. Companies were given an
overall score and divided into four quartiles — platinum, gold, silver and
bronze — to establish a score-based rating.
The study found that companies taking action to embed their social purpose are
doing so in some areas more than others. For example, companies tend to be
strongest when it comes to aligning values and company culture with their
purpose; while companies are more likely to lag when it comes to social purpose
“As an expert in business strategies for a sustainable future, I’ve seen how
transformational it can be for businesses to not only embrace social purpose,
but to also implement it,” says Coro
Strandberg, President of
Strandberg Consulting and co-author of the report. “However, leading
businesses lack guidance on authentic and eﬀective implementation, and risk
piecemeal execution. To accelerate social purpose in business and unlock their
assets for social good, best practices are needed. This report ﬁlls the gap by
shedding light on the transition pathway that lies ahead.”
Companies taking action to embed their social purpose are embedding purpose in
some areas more than others. In addition to disclosing progress on their
purpose, Corporate Knights found that companies tend to be strongest when it
comes to aligning values with their purpose. Many companies also include social
in their corporate strategies, business plans or strategic priorities.
Companies tend to lag in two central areas related to social purpose governance:
board oversight and CEO role. This means that when CEOs and boards are not
guided by an explicit statement of responsibility to implement or govern its
social purpose, the company may struggle to execute on purpose across all
Corporate Knights found that the private companies included in this study were
stronger social purpose performers than public companies. Overall, they tended
to execute on multiple criteria and seemed to do so with greater success than
the rated public companies. The reason for this remains unclear — but it could
relate to factors such as company size, co-operative form, lack of shareholder
focus, or exposure to social purpose training.
Embedding purpose in the corporate strategy and executive performance
are considered the two top indicators of authentic purpose execution. Execution
on purpose-driven pay and performance objectives for the CEO and executive team
varied from one company to the next, with well over a third of companies scoring
0 on this criterion.
"This report captures an important sentiment at the heart of Corporate Knights’
mission,” says Toby Heaps, CEO and co-founder of Corporate Knights. “We
believe that to address society’s challenges, business needs a new operating
system. Businesses that adopt a social purpose as the reason they exist get
partway there but need to go the second step to implement their purpose. This
operating system is in its infancy; and that is where this report comes in. We
hope the best practices and recommendations we’ve outlined in this report
provide the guidance companies and their boards need to fulﬁll the potential of
their purpose and put society on a sustainable path."
To learn more about the companies involved, their ratings and best practices for
social purpose implementation, read the full report
Published Mar 29, 2022 8am EDT / 5am PDT / 1pm BST / 2pm CEST