Corporate Purpose - SUM: Sustainability Management Wiki

Authors: Inga Römmer-Collmann, Lea-Sophie Fass, Joern Hoppmann, Jana Walkemeyer, Joana Weber
Last updated: March 16, 2023

Companies are increasingly voluntarily pursuing much more of a larger purpose to create legitimacy for their existence and define themselves as a society-oriented actor. This purpose is defined by the Ernst & Young Beacon institute and the Harvard Business Review Analytic Services as “an aspirational reason for being which inspires […] and provides benefit to local and global society”.¹ This process results in “impact-oriented” CSR, as an integral part of a sustainable corporate strategy. Companies analyze exactly which competencies, capacities, and cooperations they have, where they exert a strong influence, and use the findings specifically to develop solutions.

One example is the business model of Too Good To Go. TGTG is a Danish company founded in 2015 that has set itself the task of curbing food waste and at the same time raising awareness for the topic. The company calls itself a Social Impact Company and explains the term as followed: “[t]hat means we have a clear bottom line. We’re all about using a simple business model to create positive social impact at scale”.²

Another example is the American company Aspiration founded in 2013. The company states on its website: “We didn’t set out to build a bank. We set out to build a better world. Welcome to Aspiration – where we’re on a mission to help everyone Do Well and Do Good”.³ Both companies aim for a social and environmentally-conscious community.

In the context of sustainable companies, the term “purpose” is also increasingly used. With the following sentence, Szőcs and Schlegelmilch, following McEwan et al., describe the dependency between the corporate role and sustainable development: “The role of business in society and its contribution to human well-being seems to be contingent on how business is defined and on whether business exits to fulfill a broader purpose […]”.⁴ This statement underpins the need for a fundamentally new understanding of the raison d’être of business as an institution contributing to society in solving problems related primarily to environmental protection and imbalances in society, in particular the gap between industrialized and developing nations. “Purpose” thus means the meaning and purpose behind all corporate decisions.

References

1
Harvard Business Review Analytic Services & Ernst & Young Beacon Institute. The Business Case for Purpose. Harvard Business Review https://assets.ey.com/content/dam/ey-sites/ey-com/en_gl/topics/digital/ey-the-business-case-for-purpose.pdf (2015) Accessed on 14.09.2022.
2
Too Good To Go. Too Good To Go Impact Report (2020), p. 5.
3
Aspiration. Who we are https://www.aspiration.com/who-we-are (n.d.) Accessed on 14.09.2022.
4
Szőcs, I. & Schlegelmilch, B. B., Business Success Revisited: What Constitutes Business Success?, in: Re-thinking Business Responsibility in a Global Context: Challenges to Corporate Social Responsibility, Sustainability and Ethics (Switzerland: Springer Nature, 2020).

1
Harvard Business Review Analytic Services & Ernst & Young Beacon Institute. The Business Case for Purpose. Harvard Business Review https://assets.ey.com/content/dam/ey-sites/ey-com/en_gl/topics/digital/ey-the-business-case-for-purpose.pdf (2015) Accessed on 14.09.2022.
2
Too Good To Go. Too Good To Go Impact Report (2020), p. 5.
3
Aspiration. Who we are https://www.aspiration.com/who-we-are (n.d.) Accessed on 14.09.2022.
4
Szőcs, I. & Schlegelmilch, B. B., Business Success Revisited: What Constitutes Business Success?, in: Re-thinking Business Responsibility in a Global Context: Challenges to Corporate Social Responsibility, Sustainability and Ethics (Switzerland: Springer Nature, 2020).

References

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