Business for Purpose Network (B4PN) Weekly Announcement
Update #10 — January 29, 2021
1.0 RESEARCH. The Return on Purpose: Before and During a Crisis This Harvard Law School Forum on Corporate Governance study (download full report here) offers strong evidence on the business value of focusing on purpose:
- Companies that scored high on corporate purpose metrics outperformed their low-scoring counterparts on common measures of financial performance, market valuation and shareholder value creation.
- The COVID crisis provided another important insight: the valuation and value creation advantage for companies scoring high on corporate purpose widened, sometimes materially, as the crisis developed and progressed.
- We find that the average EBITDA valuation multiple earned by High Purpose brands is over 4 turns higher than that of Low Purpose brands. If sustained over time, this means High Purpose brands would double their market value over 4x faster than Low Purpose brands
2.0 PRACTICAL ADVICE. McKinsey & Company. Purpose vs PR: how business can find meaning in the COVID-19 era. Recording is approximately 30 minutes long. “Lately, many CEOs have promised to shift their business models to focus on the purpose of their organizations. It’s not enough for leaders to just talk about purpose; it needs to be embedded in every fiber of the company. During a McKinsey Live webinar, senior partners Dame Vivian Hunt and Bruce Simpson discussed the importance of organizational purpose, particularly as it relates to COVID-19, explained its implementation, and shared examples of organizations that have done this successfully.”
3.0 NEW PROGRAM. Announcing the launch of the Canada Plastics Pact. David Hughes, President and CEO of The Natural Step Canada, and Business for Purpose Network (B4PN) founding member, asks us to share and amplify the announcement of this cross-sectoral collaborative “working together for a Canada without waste or pollution.” Congratulations David and as requested, please share the news of this important initiative via these sites:
· CPP website: www.PlasticsPact.ca and www.pacteplastiques.ca
· Press releases in English and French
· CPP “teaser” video in English and here in French
· Video remarks from Min. Wilkinson (ECCC) and Sonia Wegge (EMF)
· Twitter / Facebook / LinkedIn / Instagram
4.0 UPCOMING EVENTS.
4.1 Staying with the Circular Economy and Plastics theme: James Staunch, Director of the Institute for Community Prosperity and Mount Royal University suggests we check out the Solutions Pathways Workshop for Circular Plastics in Canada. February 3, 2021. 9 to 11 am PT/ noon to 2 pm ET. Cost is free and the session will be based on the Ellen MacArthur Foundation’s handbook: “upstream innovation: a guide to packaging solutions”.
4.2 GreenBiz21 February 9–11, 2021. Rate is $695 until February 5th Coro Strandberg, Strandberg Consulting and founding member of the Business for Purpose Network (B4PN) suggests that while many sessions will be of interest, the following sessions focus specifically on Purpose:
· Becoming a Purpose-Driven Company: Tales from the Trenches (Moderated by Coro Strandberg)
· Courageous Leadership: A Conversation with Paul Polman
· Modernizing Governance to Align Strategy and Purpose
5.0 INVESTORS. At the Business for Purpose Network (B4PN) we believe investors are one lever of change to get to a world where business has purpose at the core of their work.
This week saw the annual release of the letter to CEOs from BlackRock’s Larry Fink. This year the focus is on the shift to Net Zero investments which Fink describes as a “tectonic shift”. While some groups were hoping for more details, it does seem like a step in the right direction.
On the other hand, it’s been hard to ignore the impact of a new breed of retail investors and the impact they are having as demonstrated through “The GameStop saga”. Here is how The Atlantic’s Derek Thompson sums it up: “If you want it in a sentence, I guess it goes something like this: The GameStop saga is a ludicrous stock mania born of pandemic boredom and FOMO, piggybacking off of a clever Reddit revenge plot, which targeted hedge funds, who made a reckless bet on a struggling retailer — and it’s going to end with lots of people losing incredible amounts of money.” If you are interested in understanding more about this, then CBC’s Pete Evans walks you through the details. As we think about the role of shareholder activists as agents of change, we can’t underestimate what a disruptive force they can be as well.
