We were delighted to host a panel event recently with MullenLowe London’s CSO Jo Arden and Blueprint for Better Business’ CEO Charles Wookey to discuss the subject, ‘Is conscious capitalism the only way for businesses to win?’. In a passionate discussion – expertly steered by Brand Republic editor-in-chief, Danny Rogers – the panel broadly agreed on the need for change in capitalism, and highlighted the differences between campaigns that talk purpose, and companies that actually do purpose. And that those businesses that ‘do’ purpose as well as ‘say’ it not only removed the reputational risk of purposewash, but also exemplified what conscious capitalism means.
Further, those companies that practise ‘steel purpose’ over ‘glass purpose’ will win the support of analysts and investors who are increasing the pressure on boards to manage their Environmental, Social and Governance (ESG) risks in return for their continued investment. Larry Fink’s letter was cited as a tipping point in the question of whether capitalism had to be ‘conscious’. The letter earlier this year from the chief executive of BlackRock – the world’s largest asset manager with more than $6 trillion in assets under management – to chief executives of the world’s leading companies, laid the gauntlet down to them: ‘Without a sense of purpose, no company, either public or private, can achieve its full potential. It will ultimately lose the license to operate from key stakeholders. It will succumb to short-term pressures to distribute earnings…, it will remain exposed to activist campaigns that articulate a clearer goal.. And ultimately, that company will provide subpar returns to the investors.’
During the panel discussion we identified key differences between glass and steel purpose – and a way to identify conscious capitalism – including:
- Glass purpose has no proof of impact, whereas steel purpose finds operational proof across the value chain
- Glass purpose feels disconnected or like an ‘add-on’ to the brand, whereas steel purpose is in line with brand heritage and its place in the world
- Glass purpose is glossy and diverting, whereas steel purpose has a fundamental honesty and transparency
- Glass purpose can be turned off after a campaign, while steel purpose involves long term goal setting
- Glass purpose sits in the marketing department, steel purpose lives in the C-Suite
So, did our panel agree that conscious capitalism is the only way forward for businesses?
We certainly agreed that capitalism is changing and that it has the capability to be an incredible force for good in the world. And that they need to be drivers for change while Governments are not. However, in order to be this change, businesses must understand the notion of ‘steel purpose’ vs ‘glass purpose’, instill purpose at their core and rethink how they engage consumers (or more accurately, citizens) with purpose.