The future of business? Purpose, not just profit

By Andries du Preez, Country Manager, San Miguel

We live in turbulent times. Poverty, inequality, unemployment and climate change are among the challenges South Africa faces. And leaders in business are being asked questions about the impact their companies have on society. Trust has become the ultimate currency.

Millennials are driving this trend; 40% of those polled in the Deloitte Millennial Survey 2018 believe the goal of businesses should be to ‘improve society’. This is seriously worth pondering.

Profit with purpose is set to become the new norm. Up to this point, social enterprise and impact investment have been driving this concept, which has somehow remained confined to ticking B-BEEE boxes. Not anymore. Now, it’s all set to change: the world’s future leaders will want their companies to be recognised as forces for good.

San Miguel is one such organisation that has developed a purpose-led strategy. I believe San Miguel’s operation in South Africa is among the first businesses to give a new, more profound meaning to the word ‘sustainability’, regarding it not just as the right thing to do, but an essential component of growth.

Have we revolutionised the sector? Not quite, but there is undoubtedly an emerging trend for more corporates to take empowerment and sustainability issues seriously. As an example we have changed our business strategies accordingly and launched Thudana Citrus Trust. A B-BEEE ownership scheme, a select number of employees have a 30% ownership of the company. Thudana Citrus Trust aims to play a constructive role in empowering black people in the Eastern Cape citrus industry by facilitating participation in the citrus value chain.

We, South Africa and the wider world, are at a critical juncture. According to last year’s Edelman Trust Barometer, 64% of people globally expect CEOs to lead social change rather than waiting for government intervention. And a significant 84% expect CEOs to influence policy debates on social issues.

Corporate responsibility is going mainstream
Increasingly, companies are going beyond compliance. Nearly 90% of the world’s biggest companies are reporting on their sustainability performance, using metrics established by the Global Reporting Initiative (GRI), and almost 9 933 companies from 160 countries are members of the UN Global Compact; an initiative that aligns businesses’ strategy with social goals to support the Sustainable Development Goals.

So will the future of big business be modelled on social enterprise?
Investors are signalling a desire for social impact alongside a financial return, so it’s not unrealistic. A survey of high-net-worth millennials found 69% placed greater importance in investing in companies showing a high level of corporate social responsibility. According to the Global Sustainable Investment Alliance, responsible investing is up 25% globally over the past two years.

So it’s evident that governments or civil society alone cannot solve the world’s most pressing problems. It’s time for business to pitch in. From reducing environmental impact to contributing to healthier communities and fighting forced labour, companies can achieve tremendous results if they balance profit and purpose.

With the growing trend for investors and consumers to buy into companies that deliver positive social change alongside financial returns, the trend for big business to adopt impactful social missions looks set to continue. The question is: how many business leaders will have the courage to step up to the plate?