New responsible business measure reveals UK business in danger of falling into purpose-wash trap

FOR IMMEDIATE RELEASE:  Monday, 29th April 2019 

  • 86% of participating companies have a purpose statement
  • However, vast majority (83%) have not yet considered what this means across departments or set clear team targets
  • Companies are using Global Goals to describe their activity, but not using them to shape strategy
  • Health and wellbeing ranked as biggest material issue to business with environmental issues coming second

A gap between company purpose statements and integration with clear targets across departments and teams has revealed a potential danger of UK business falling into the trap of purpose-washing, according to analysis of findings from the Responsible Business Tracker, piloted this year and published today by Business in the Community – The Prince’s Responsible Business Network. 

The Responsible Business Tracker, sponsored by Sky and supported by the Lloyds Banking Group’s Centre for Responsible Business of the University of Birmingham, is the largest measure of its kind of responsible business in the UK with 64 companies participating across 24 sectors, with a combined turnover of approximately over £105bn and employing over one million people. The Tracker not only measures the progress made and what needs to improve, but it also provides the support needed to companies to make change happen. It is not currently statistically representative of all UK business, but is indicative of key emerging trends which will be explored further with more participants in future. 

The Responsible Business Tracker data revealed that while 86% of participating companies have a purpose statement with 47% linking it to responsible business, the vast majority (83%) have not integrated their purpose statements across departments with clear team targets.  Only a third (33%) reported they have performance management systems in place to integrate responsible business objectives across the business.  While we would expect leadership to be setting ambition and driving strategy, there is a big gap between what is being communicated and how it translates across departments and individual accountability and targets.

Analysis of the Responsible Business Tracker findings also suggest using the Global Goals, (The UN’s 17 Sustainable Development Goals) to shape business strategy is proving to be a challenge. The Tracker revealed that while there is widespread use of the Global Goals in describing company activity to employees and external audiences, they are not embedded in company cultures or driving strategies. While 72% of participating companies have started formally engaging employees and senior leaders to identify priority issues, 70% reported a lack of understanding of the risk of not meeting the Global Goals to their business.

However, there is strong evidence from the Tracker to suggest that the Global Goals are prompting collective sector action which others can learn from.  The food and retail sector is a stand-out example where over half (55%) of participating businesses in this sector have verified their human rights impacts through stakeholder consultations compared to an overall average of 22%.  The Tracker also points to companies in sectors prioritising the same Global Goals and consequently taking strong collective action. 92% of the utilities, energy and transport sectors have set objectives, targets and key performance indicators for their carbon reduction strategy, compared to an average of 63% across all respondents.

Amanda Mackenzie, chief executive of Business in the Community, said:

“Thanks to the pioneering companies dedicated to getting better, we can for the first time measure how much companies are walking the talk in responsible business. The Responsible Business Tracker is the UK’s largest measure of its kind which reports on the progress companies are making, what more needs to be done and provides a support system for businesses to improve. It doesn’t always make for easy reading, but companies that want to change are willing to say they are not perfect and want to know how they can improve.

“We are increasingly seeing companies re-thinking their role and contribution to society by stating what their purpose is. This is progress. However, our Responsible Business Tracker not only showcases the positive impact companies are making which others can learn from, but keeps us honest so we don’t fall into a potential new era of purpose-washing. Health and wellbeing comes top of the list of priorities for business, and while environmental issues come second, the gap is too big and more must be done, quicker.

“As the Responsible Business Tracker grows in participation, its influence and importance will only become greater.  In future, the Responsible Business Tracker will drive practical action and impact, identify best practice and make change happen.”

Key Responsible Business Tracker findings also include:

  • Health and wellbeing selected as most highly material issue to businesses (52%)
  • Environmental issues (circular economy and resource productivity, net zero carbon and healthy ecosystems) were the second most material issues to business when combined (37%)
  • 61% of participants consider social factors during product or service development.  56% consider environmental factors
  • But, only 39% reported that they have processes in place to be able to change product and service design if they have a high level of negative impact or no real social impact

Jeremy Darroch, CEO of Sky plc and Chairman of Business in the Community, concluded: 

“The Responsible Business Tracker will become a vital tool for showing how responsible UK business really is. At a time of decreasing confidence in the institutions that have traditionally held society together, there is an even greater expectation on business to act on their words.”

Ends   

Notes to editor

Copies of The Responsible Business Tracker® Insights: Raising The Bar, Business in the Community’s Responsible Business Tracker report can be downloaded here

Media contact 

Katherine Howbrook, head of media and external affairs, Business in the Community, Mobile: 07515 119 096 Email: katherine.howbrook@bitc.org.uk

About Business in the Community 

Business in the Community, part of the Prince’s Responsible Business Network, is a business-led membership organisation made up of progressive businesses of all sizes who understand that the prosperity of business and society are mutually dependent. We exist to build healthy communities with successful businesses at their heart. 

We use our Responsible Business Map to guide members on a journey of continuous improvement, working across the whole responsible business agenda. From community engagement to employment, diversity and the circular economy, we offer expert advice and specialist resources, driving best practice by convening, sharing learning and recognising great performance across our influential network. www.bitc.org.uk