Business is well placed to drive social change, and doing so would bring corporate as well as societal benefits. Isabel Kelly offers practical advice to water companies who want to do more.
Is there genuinely growing support for the idea that financial profit isn’t the only thing a business should be concerned about? And are those ideas really being put into practice? There’s plenty of talk about it in business communities right now, which suggests social and environmental purpose is going mainstream. The concept has certainly taken hold in water, where companies are becoming well versed in social contract conversations.
But, in an expert’s opinion, how much is real, and how much is it just warm words? “I think something has shifted,” says Isabel Kelly, founder of Profit with Purpose, an organisation which seeks to support businesses to get behind social purpose in a meaningful and sustainable way. Kelly was part of this scene before it was ‘popular’ – see box. “The focus on profit at any cost is diminishing,” she asserts.
She continues: “Increasingly, the conversation is over; the argument is won.” She explains that the theory of the value of socially purposeful business is now widely accepted. But goes on to point out that the practical application, even amongst those who profess to support the cause, is mixed. “Some see it as a mitigation, whereas others really engage with it,” she reports, adding “and there’s a demographic element to that”. She says that younger people tend to be pretty enthusiastic but that typically it is not them sitting in the boardrooms of companies that have the power to make a difference. “So there can be a blocker”.
Kelly warms to her theme, commenting that virtually every company she has advised reports an awareness that “young people want it” – ‘it’ being change in the way business is done. “‘It doesn’t match my values,’ young people say,” she reports.
So from a corporate point of view “authentic social purpose is a differentiator now”.
Kelly says different sectors as well as different companies are in different places on the journey. Financial services, for instance, has been actively recruiting ‘softer’ skill sets rather than pure profit maximisers since the crash. But that there is growing recognition across the board that purpose is good for business as well as the planet.
And that is very much Profit with Purpose’s philosophy. Kelly argues a sustainable social purpose aligned to the core of a business will add value to that business as well as creating positive social impact in the world. That value might include attracting talent generating loyalty, stimulating innovation, boosting brand value and providing competitive edge. Profit with Purpose encourages companies who mean what they say to use their people, their products and their profits for social good.
Where is water?
The good news for water is that Kelly thinks the sector is well ahead of most others she works with. She spoke at Indepen and The Water Report’s Social Contract Summit in November, where she recalls Ofwat chief executive Rachel Fletcher indicating water was a bit behind the pace on purpose. “I don’t think it’s true that they’re behind, but the bar is quite low,” Kelly says commenting that the very fact the words ‘social contract’ are in common parlance in water is a credit to the sector.
She was impressed by what she saw that day, with company leaders appreciating the stewardship role their organisations play both environmentally and socially, and coming together to thrash out what more can be done. “I cannot imagine tech industry chiefs for instance coming together to talk about a social contract,” Kelly confides, adding that the mindset of the water leaders was “at a completely different starting point” to more competitive industries. “They were more like public sector CEOs than retail or financial services CEOs,” she observes, adding quickly that gives water a massive head start in playing a leading role in purposeful business.
Kelly was impressed, too, by Ofwat’s overt support for this direction of travel, as set out in its new strategy and by Fletcher on the day of the Social Contract Summit. Contrary to those who argue the regulator should keep out of the social contract, Kelly sees regulatory support as “a massive help”, particularly if it can play a convening role on standards and if it can encourage progress across the industry.
Ofwat has recently signalled its intention to play actively in this space going forwards: it announced it is recruiting a new director of governance, environment and public value, who will be responsible for encouraging and incentivising companies to work in the long-term interest of society and the environment.
Kelly adds she was also struck at the summit by water company discussions around communities and customers playing their part and holding up their end of any social contract – an idea she fully endorses.
Given water companies are starting in a good place, what advice does Kelly have for them about embedding purpose and progressing it at pace? She offers the following:
❙ Articulate the end goal – “A lot of companies start with the tactics, do the volunteering or donate or whatever. But the question is, to what end? They need to articulate the vision, what the end goal is.”
❙ Tune into the Sustainable Development Goals (SDGs) – “Profit with Purpose believes the SDGs are the best framework we’ve ever had for companies to understand how their resources can transform the world.” Kelly explains these goals target agreed global societal issues so have inherent credibility and legitimacy.
❙ Learn from best practice – There are now lots of companies with some experience in this space, and even within the water sector, companies could learn from each other. Some kind of stock taking exercise on who is doing what, why, and how it is going would be valuable.
❙ Create a vision and strategy for the whole organisation – Kelly says this should include identifying the necessary resources; set- ting objectives; and tracking progress. On the resources point, she comments that hiring dedicated people with relevant expertise is vital but commonly overlooked, with companies expecting existing staff to add purposeful delivery to their day jobs. “In no other area would you, as a business, have an outcome but no people. You need a dedicated resource with expertise. There can be a lack of respect for expertise that is not focused on driving profit.” She also counsels companies that it is wise to “involve your risk and governance people early on. They can be a massive enabler, providing a good framework and thought-through compliance.”
❙ Deliver locally – Social purpose is often best delivered locally, “so even a global company could have one goal, use the same metrics globally but provide for local delivery.” This should include partnering with organisations that would help achieve the vision, even though they may be uncomfortable bedfellows. “Companies are often insular or use partners that are tied in to traditional products and values…Likewise, NGO leaders can not want to engage with businesses.” Kelly points out, though, that for all their efforts, NGOs alone have failed to change things concertedly, so should really welcome the help of business. Again she highlights the need for companies to treat any such partners with skills and connections different to their own with respect. “You need partnership not patronage,” she urges. “You need to see it as ‘you have expertise, we have resources, not we’re going to do this to you…that’s a lack of respect.
KELLY’S JOURNEY TO PURPOSEFUL BUSINESS
Isabel Kelly’s career positions her well to understand both the strategic and operational needs of business as well as how to make social impact. As she puts it: “I understand need to move at pace, the need to make a profit but also that the rampaging of the ‘80s and ‘90s are over.”
She spent 11 years at Amnesty International, campaigning for social justice in particular in east Asia and tibet. here she not only met the Dalai Lama twice, but first recognised “the power of business to drive social change”. she explains that in hong Kong she saw the power of ‘being in the room’ and how using the good offices of business could influence the release of religious and political prisoners in China. Kelly subsequently spent 12 years in a very different environment: at cloud-based CRM specialist Salesforce, now a multi-billion dollar company ($168bn market cap) but then a start up with a big vision. Kelly explains founder Marc Benioff was committed from the start to contributing to social progress, and since the beginning has donated 1% of employee time (seven days a year), 1% of its product (licences to use its CRM system are given away to non-profit and educational organisations) and 1% of pre-IPO equity to achieve that goal. since its creation in 1999, the Salesforce Foundation (now salesforce.org) has delivered hundreds of thousands of employee volunteering hours, donated over $100m in grants and given salesforce technology to 28,000 non-profit and education organisations.
Benioff hired Kelly in 2002 to develop the Salesforce Foundation internationally. As international director she expanded the initiative to thousands of non-profits in 110 countries, generating revenue of $12m to fund grants, and achieving 80% employee participation in volunteering.
That Salesforce philosophy underpins Profit With Purpose’s work to this day; as Kelly puts it, that purpose should be “at the core of a company, not added on as an afterthought”. Profit with Purpose advises clients as diverse as experian, Gucci, Blue Prism, Suffolk County Council, Shiva Hotels and Sage on social impact strategy, provides hand holding during implementation, and facilitates introductions to a wide network of relevant associates and partners.
Profit with Purpose practices what it preaches, including by giving at least 1% of profit to fulfil its own social impact objectives, which are currently focused on education in Kenya.