FIT FOR PURPOSE 2015 · – Whether the brand has run a purpose-led campaign PURPOSE & STORY All mouth and no trousers Are companies articulating their reason for being in a clear

An index of the 100 brands

best placed to put purpose into practice

FIT FOR PURPOSE

2015:

Introduction1 What’s the point of purpose?

2 Purposeful brands at Radley Yeldar

5 What makes a brand Fit for Purpose?

The Top 1008 Are you Fit for Purpose?

The Top 1013 Who made the Top 10?

The insights35 Our discoveries

Sector overview42 Sector by sector

43 Basic Materials

44 Conglomerates

45 Consumer Goods

46 Financial Services

47 Healthcare

48 Industrial Goods

49 Services

50 Technology

51 Utilities

52 Contributors

RY FIT FOR PURPOSE INDEX | INTRODUCTION | 1

WHAT’S THE POINTOF PURPOSE?

The role of the corporate brand has radically changedThree interdependent forces have shaped this shift over the past decade:

The first is the transformation brought about by technology. We know the facts. There are more mobile contracts than toothbrushes. We’re all online, always. Facebook’s population is bigger than China’s. And crucially, with a proliferation of content, getting noticed is much tougher.

The second is the emergence of a more savvy type of consumer – consumers that understand the relationship between product brand and parent brand; that are just as interested in why you exist as in what you can offer. They (or, maybe, ‘we’) can see you from all angles, because they aren’t simply customers but investors or employees too. And, with views to share and platforms to share them on, they’re holding organisations to their word more vocally than before – demanding new levels of authenticity and transparency.

The third is sustainability’s transition from fringe to mainstream. Showing you care about more than profit is part of the new contract between corporation and society. And the organisations that are using science-driven innovation to drive reputation when it comes to responsible business are the ones that will be more resilient in the long term.

For businesses, purpose is part of the response to these shifts Over the last decade, businesses have embraced purpose as a way to add meaning and texture to their brands. Done well, purpose helps cut through in a noisy landscape. Done brilliantly, it allows individuals to connect emotionally with an organisation.

But having a purpose isn’t enough.

Purpose must be put into practice to make a difference Purposeful brands go beyond a well-crafted set of words; it’s not enough to have a polished statement of purpose without any evidence that you’re living up to the promise you’ve made.

They invite people to be part of their purpose, so their customers, investors and employees can help turn an ambition into action.

Ultimately, they create business success. By fulfilling their purpose they benefit society. And they prove that they’re worthy of our trust, our time and our buy-in.

2 | RY FIT FOR PURPOSE INDEX | INTRODUCTION

PURPOSEFUL BRANDS AT RADLEY YELDAR

We believe that corporate brands with a strong stated purpose have a big opportunity Purpose offers focus: helping brands to realise the potential benefit they create for people and society. Purpose offers direction: helping to motivate employees and show customers what they’re buying-in to. And, when used to guide strategic decision-making, purpose drives performance: helping organisations to make choices that build trust over time and safeguard resilience into the future.

We believe the most compelling purpose statements put a social or human need at their heart – and the best organisations are using purpose to drive communications, inform decision-making and engage their stakeholders.

This research seeks to identify and celebrate best practice in this space.

So, are the world’s biggest brands Fit for Purpose?That’s what we set out to discover as we embarked on this research.

We’ve built a one-of-a-kind assessment that offers corporate brands a clear snapshot of how the world might see them. Drawing on insights from RY’s brand, sustainability, digital and engagement teams, our criteria assess the quality of purpose statements, and the extent to which purpose is embedded into and connected across their external communications, behaviour and performance.

Read on to discover what we did, our methodology and criteria, and what we found.


FIT FOR PURPOSE:OUR EXPLORATION

We assessed external communications from the top 170 companies of the Financial Times 500 combined with the FTSE Eurofirst 100.

We used 27 criteria to help us understand:

How many companies have a purpose statement? Which companies actively state they are here to provide a wider social value – beyond making money – to individuals, society or the world at large?

How many companies are committing to act on their statement? Who is claiming to have made purpose intrinsic to their business, incorporating it into their people’s everyday work, and measuring the outcomes of their activities?

So our assessment evaluates not only the quality of each company’s statement of purpose, but also the extent to which this purpose is embedded into their everyday endeavours – from the way each company communicates to the way decisions are made in the business and how purpose exists in their culture.

We don’t claim that any of the companies in our index or Top 10 are spotless. However, we believe that we’ve identified the organisations with the greatest potential to create benefits for their business and for society at large, based on what they’re telling the outside world.


OUR CRITERIA AND METHODOLOGY

Who we reviewedWe looked at the top 100 companies of the FT 500 combined with the Eurofirst 100. We reviewed 170 companies in total between April and May 2015. However, only companies with a public, clearly stated purpose or social intent were considered for a full review; this gave us a long-list of 127 companies, of which 100 are celebrated in this report.

We clustered our sample using Standard and Poor’s Global Industry Classification Standard.

All averages in the report are based on the full list of 127 companies.

What we looked at We want to be clear about what we’ve included in our research – which, at this stage, looks only at publicly available external communications produced by corporate brands. Key sources included:

– Company websites (including careers sites, investor relations sites)

– Company reports (annual, integrated and sustainability reports)

– Corporate campaigns (i.e., campaign aimed at stakeholders not just consumers, issued by a corporate brand not a product brand)

– Corporate social media (Twitter, Facebook, LinkedIn, YouTube)

To this end, our Communication, Performance and Behaviour scores are limited in scope by the information each organisation chooses to publish. However, the criteria represent global best practice in terms of transparency and corporate disclosure standards. As the Index evolves over time we hope to include specific metrics on consumer perception and social reputation.

How we worked out the scoresEach company in the index received an overall percentage score. This was made up of four equal scores for Purpose & Story, Communications, Behaviour and Performance (23.5%), with the remaining marks composed of a Connectivity score (6%). Percentage scores were used to define entry into our Top 100, and to identify the Top 10.

A secondary systems of ranking helped us to define the classification used in the Top 100. We plotted the quality of the stated Purpose & Story against the other three main scores – Communications, Behaviour and Performance. This was designed to identify four types of organisation:

– The Super-fit are those with a strong stated purpose, and who reference purpose in relation to Communications, Behaviour and Performance narratives

– The Heavyweights reference purpose in relation to Communications, Behaviour and Performance narratives, but do not have such a clearly articulated purposes in the first instance

– The Middleweights have a strong stated purpose, but lag behind somewhat when it comes to referencing purpose in relation to Communications, Behaviour and Performance narratives

– And the Lightweights lag behind the rest of the Top 100 on both the dimensions above.


WHAT MAKES A BRAND FIT FOR PURPOSE?

The four main criteria that underpin our Fit for Purpose methodology:

COMMUNICATION

Building a brand movementAre companies using their purpose to engage and activate their audiences?

Using communication channels effectively can help you to build movement and momentum around your stated purpose – inspiring other stakeholders to get involved and play their part.

We looked at social media, dotcoms, campaigns, annual and sustainability reports. Our criteria looked for evidence that companies are using their communication channels to inform and encourage dialogue, create affinity and ultimately build a movement around their stated purpose.

Specifically we looked at: – The extent to which purpose is clearly embedded into key external communications channels

– Whether the brand has run a purpose-led campaign

PURPOSE & STORY

All mouth and no trousersAre companies articulating their reason for being in a clear and compelling way?

A great statement is clear, memorable, and inspires action. It gives people something to focus on, and prevents the proliferation of disparate messages that aren’t delivering on one meaning.

Some of the companies we assessed didn’t have a well-crafted statement but were communicating and acting with a strong sense of social purpose. We didn’t want to discount these companies from our ranking, so while they were not able to reach full marks for this area, we did go on to score them across all others. If there was no sign of social purpose, then the company was discounted from the ranking.

Specifically we looked at: – Whether your purpose clearly addresses a world need

– How you describe that purpose in the context of your operations

– What promise you make with the world

– How you differentiate yourself from others

– Whether the stated purpose is clear, inspiring and forward looking


BEHAVIOUR

Inspiring actionAre companies embedding their purpose into their culture?

In a purposeful company, people will have a shared understanding of why their employer exists and what they can do to contribute to the company’s success.

We investigated, how leaders champion their company’s purpose, how purpose is used to attract talent and whether employees are given the opportunity to engage in activities related to the company’s purpose. Also we observed what type of governance structures businesses are putting in place to deliver on their purpose, and whether employees are actively engaged with the company’s purpose.

Specifically we looked at: – The extent to which purpose is referenced in externally available leadership statements

– Whether the brand offers any evidence that employees can do purposeful work

– Whether there are any purpose-led partnerships in place

– Whether the brand offers any disclosure on integrated governance practices that link back to purpose

– Whether purpose links to values or talent attraction

– Whether the brand uses case studies to show purpose in practice

PERFORMANCE

Measurement is everythingAre companies letting purpose drive their performance?

Communication is important, but your purpose needs to run deeper than that. If you are really committed, it should be reflected in the way that you organise your business, set goals and strategies, and monitor progress.

We assessed whether companies are embedding purpose into their business model, business strategy and sustainability strategy. Not only that, we wanted to know whether companies are setting specific targets aligned to their purpose or linking the impact generated by their purpose to specific KPIs.

Specifically we looked at: – Whether purpose is connected to business model and business strategy

– Whether purpose is connected to targets or KPIs

– Whether purpose is connected to the brand’s approach to sustainability

RY FIT FOR PURPOSE INDEX | THE TOP 100 | 7

THE INDEX:WHO MADE

THE TOP 100?

8 | RY FIT FOR PURPOSE INDEX | THE TOP 100

36COMPANIES

THE SUPER-FITThese companies get it. Demonstrating clearly that they want to do more for people and society at large, they have started putting actions into place to achieve this. Whether their corporate campaigns are moving millions, or their ambitious long-term targets demonstrate their commitment, they’re on the move and Fit for Purpose.

ARE YOU FIT FOR PURPOSE?

We recognise it’s not just about better or worse scores in a ranking, but about how fit companies are to deliver on their purpose, when executed correctly.

With this in mind, we’ve grouped the Top 100 brands from our sample according to their stated purpose and the practical steps they claim to be taking to convert their purpose into impact. We’ve defined four main groups: the Super-Fit, the Heavyweights, the Middleweights, and the Lightweights.

28COMPANIES

THE HEAVYWEIGHTSIn this group, we see those companies that are doing a lot of the hard work, from integrating their purpose into their sustainability strategy to connecting employees with their purpose. However, the way they tell the world about what they’re up to leaves room for improvement.

20COMPANIES

THE LIGHTWEIGHTSFinally, the Lightweights. These are the companies that have an implicit sense of a social intent or purpose, but it isn’t well articulated. Similarly, and perhaps as a result of this, there’s room for improvement in putting their purpose into action.

16 COMPANIES

THE MIDDLEWEIGHTSIn contrast to the Heavyweights, the Middleweights have figured out why they exist and tell their story in an inspiring and compelling way. However, they still have some way to go to put the necessary actions in place that will allow them to live and breathe their purpose on a daily basis and become Fit for Purpose.

Wha

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in p

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What you say: Stated purpose


THE SUPER-FIT

1 Unilever 89.3%2 Philips 85.5%3 Lloyds Banking Group 82.9%4 Pearson 82.3%5 Nestlé 80.5%6 GlaxoSmithKline 80.2%7 PepsiCo 80.1%8 Marks & Spencer 78.8%9 Kingfisher 77.7%10 Rolls-Royce 77.4%

11 AstraZeneca 75.1%12 BASF 73.9%13 Bayer 73.8%14 Danone 73.7%15 Engie 72.9%16 Novartis 72.8%17 Airbus Group 71.9%18 Procter & Gamble 71.6%19 Vodafone 71.3%20 Sky 71.2%21 Coca-Cola 70.7%22 SAP 70.4%23 GE 70.3%24 ABInBev 70.2%25 L’Oréal 70.1%26 Renault 68.1%27 Total 67.1%28 Toyota 66.2%29 Microsoft 66.1%30 AkzoNobel 65.3%31 Cisco Systems 64.0%32 Sanofi 63.3%33 Google 63.2%34 Volkswagen Group 62.8%35 Verizon 62.6%36 Wells Fargo 61.6%

SKY

Making life better by entertaining and connecting peoplePartnerships are a key element in bringing Sky’s purpose to life. Sky Rainforest Rescue in partnership with WWF is particularly inspiring. Aiming to help save three million hectares of forest from deforestation, Sky has created a series of programmes that connect their viewers to stories from rainforest communities in Acre, North West Brazil.

GE

To invent the next industrial era, to build, move, power and cure the worldCorporate campaigns are central to GE’s purpose. GE’s campaigns are fairly unique in the corporate sphere, with an aspirational purpose to ‘invent the next industrial era’ reflected by the quality of their campaigns. They are visually appealing and set out in a compelling way how GE’s purpose works across the wide range of sectors in which it operates.

GOOGLE

To organise the world’s information and make it universally accessible and usefulGoogle’s products are true to its purpose. When disaster strikes, people turn to the internet for information. Google help ensure the right information is there in these times of need by building tools to collect and share emergency information, and by supporting first responders in using technology to help improve and save lives.


THE HEAVYWEIGHTS

37 Siemens 75.9%38 Novo Nordisk 75.0%39 Johnson & Johnson 74.0%40 Heineken 73.6%41 BP 72.6%42 Kering 72.4%43 BT Group 71.8%44 Saint-Gobain 71.1%

45 Lafarge 70.9%46 LVMH 67.8%47 Bank of America 67.6%48 Inditex 67.5%49 Tesco 67.2%50 ING 66.8%51 Anglo American 66.6%52 Barclays 64.5%53 Aviva 63.8%54 Banco Santander 63.4%55 Reckitt Benckiser Group 61.7%56 BMW 60.3%57 Bristol Myers Squibb 60.2%58 Wal-Mart Stores 60.1%59 HSBC 59.8%60 Royal Dutch Shell 59.4%61 SAB Miller 59.0%62 Pfizer 58.7%63 British American Tobacco 58.6%64 Orange 57.8%

SIEMENS

We make real what matters, by setting the benchmark in the way we electrify, automate and digitize the world around us Siemens’ purpose is the ‘red thread’ in their integrated report. Believing fundamentally that purpose matters to all their stakeholders, Siemens produce one of the best Integrated reports in terms of its implementation. Their purpose features on its initial pages and acts as a core theme throughout the report. It forms part of a detailed discussion around the business strategy and wider value creation.

KERING

To allow our customers to express, fulfil and enjoy themselves through our productsAligning their recruitment strategy with their purpose, Kering say their aim is to empower their employees to fulfil their potential and creativity, by fostering their skills and performance in the most imaginative and sustainable manner.

BT GROUP

To use the power of communication to make a better worldPurpose builds BT’s sustainability report credibility. BT have built their sustainability report around a brand purpose of ‘using the power of communications to make a better world’. This approach provides two main benefits. Firstly, by using their purpose to anchor their sustainability communications they build a coherent and consistent story that is told and reinforced at all touchpoints. Secondly, and more importantly, it gives the message real credibility and readers a reason to trust BT, which in an age of transparency is more valuable than ever.


THE MIDDLEWEIGHTS

65 Qualcomm 64.4%66 Shire 60.8%67 Vinci 58.5%68 CVS Health 57.7%69 IBM 56.4%70 Intel 56.3%71 Facebook 56.1%72 AXA 55.3%73 Merck & Co. 55.2%

74 Roche 55.1%75 McDonald’s 54.9%76 Apple 52.9%77 AbbVie 49.0%78 Union Pacific 48.3%79 UnitedHealth Group 47.1%80 Samsung Electronics 46.9%

FACEBOOK

To give people the power to share and make the world more open and connectedPurpose grows with leadership support. CEO Mark Zuckerburg is a huge advocate of purpose and uses many different forums and channels to discuss it. He hosted a Q&A on his Facebook page discussing their purpose in detail which guides the company’s philanthropic efforts, aiming to help people in less developed countries get online, through internet.org. This gains the attention of specialist audiences such as the media and opinion-formers who grow and share the story.

APPLE

To leave the world better than we found itApple’s committed to measuring their purpose. The sustainability section of their corporate website clearly displays a wide range of impressive KPIs, such as the fact that 100% of their data centres run on renewable energy. In addition, they provide a range of annual statistics and a breakdown of the greenhouse gas emissions for the full life-cycle of their products: from production to use, to recycling. Taken together, these measures go a long way in demonstrating Apple’s commitment to leaving the world better than they found it.


THE LIGHTWEIGHTS

81 National Grid 55.7%82 WPP 54.8%83 Petrobras 54.1%84 Chevron 52.0%85 JPMorgan Chase & Co. 51.9%86 Industrial & Commercial

Bank of China51.6%

87 Enel 51.5%88 Relx Group 51.1%89 Telefonica 50.6%

90 Citigroup 49.9%91 Royal Bank of Canada 48.9%92 Toronto-Dominion Bank 48.1%93 Centrica 48.0%94 Diageo 47.9%95 Generali 47.8%96 BHP Billiton 47.4%97 Commonwealth Bank

of Australia46.2%

98 Rio Tinto 45.0%99 Carrefour 44.4%100 The Walt Disney Company 44.3%

NATIONAL GRID

To be a recognised leader in the development and operation of safe, reliable and sustainable infrastructureAligning their purpose with their sustainability story, National Grid has crafted an inspiring promise, ‘making connections’. It describes their role in the transportation and use of energy and exploring the changing production and use of energy. They aim to ensure the safety, security and sustainability of our energy grid now and in the future through preserving the environment, inspiring the next generation of engineers and designing the safest, most reliable network.

JPMORGAN CHASE & CO.

To be a first class business, in a first class wayJPMorgan Chase & Co. produced an inspiring film that captures what it is to be first class. Describing their business as more than skyscrapers and investments; more than cash and credit cards; more than numbers and loans. The film explains how they help families buy their first home and parents save for their children’s education. They also share a number of case studies demonstrating what this means in practice. They tell the story of a small, recycled toy business that is expanding into markets overseas and a story about a vet setting up his own practice. This explains their role in society and how they create societal value alongside financial value.

RELX GROUP

To be a world-leading provider of information solutions that improve outcomes for our professional customers and benefit societyRELX Group’s case studies bring to life their purposes. When describing what they do as a business, they say that they help scientists make new discoveries, lawyers win cases, doctors save lives and executives forge commercial relationships with their clients. To prove this, they have a section on their website dedicated to the success stories of their clients which are substantiated by KPIs and quotes from their customers.


THE LEADERS: WHO MADE THE TOP 10?


WHAT WE LOVETheir statement, ‘Making sustainable living commonplace’, is strong and inspirational. It leaves no doubt about the impact Unilever want to make. The way the business lives up to this aspiration means Unilever perform well across our criteria.

Their ability to communicate in a way that embodies their purpose and builds engagement is peerless, earning the only maximum score in our Top 10. The evidence? Think Project Sunlight or Unilever’s Bright Future with its 240 million supporters around the world.

Their commitment to make an impact is so strong that they not only clearly state their purpose in their business strategy and business model; they also revised the entire portfolio and are working hard to ensure each individual product brand aligns to the vision set out in the Unilever Sustainable Living Plan. The fact that their purposeful consumer brands have contributed to half of the business’s overall growth, growing twice as fast as other brands in the portfolio, is proof of this successful move.

The structure and operating model of the business is designed to drive purpose-led decisions. For example, the marketing and communications functions also lead Unilever’s sustainability agenda and the Unilever brand.

#1

UNILEVERMaking sustainable living commonplace

WE CAN NO LONGER PRETEND THAT BUSINESS CAN IMMUNISE ITSELF FROM THE RISING TIDE OF ENVIRONMENTAL CHALLENGES. WE SEE THIS AS THE BEST LONG-TERM WAY FOR US TO GROW AND BRING BENEFITS TO ALL OUR STAKEHOLDERS. TO SUCCEED IN THIS GOAL, WE NEED TO CHANGE THE WAY WE DO BUSINESS AND TO SCALE UP THE IMPACT ON THE ISSUES THAT MATTER MOST.

Paul Polman Chief Executive Officer

THE NUMBERS

OVERALL

PURPOSE & STORY

COMMUNICATION

PERFORMANCE

BEHAVIOUR

89.3%

82.6%

100%

86.7%

90.5%


Case studyIf taking a hot shower is more about waking up than washing, it can be easy to forget that one in nine people still lack a steady supply of clean water. That’s over 700 million people worldwide.

Unilever’s Comfort One Rinse is formulated to dramatically reduce the amount of foam left in fabrics after washing, so requires just one bucket of water to fully clean items. This means a family can save up to 30 litres of water on every hand-washed load. It launched in India and Cambodia in 2012, and has now reached Thailand, Vietnam, Indonesia and the Philippines.


WHAT WE LOVEPhilips’s external communications suggest that ‘Improving people’s lives’ is an authentic mantra for the whole organisation. From the brand film showing the positive difference Philips has been making since 1891 to the company’s business model, their purpose plays a central role.

Within the narrative Philips use to attract talent, there is a real sense of this purpose, which is built around a tangible opportunity for recruits to make a mark on the world.

Philips’s transition to circular economic principles, with a passion for improving people’s lives, goes hand in hand with their vision of ‘making the world healthier and more sustainable’ through innovation.

They set an ambitious target to improve three billion lives a year by 2025 and created a series of measures to get there. The result? In 2014 they introduced seven new Healthcare green products to improve patient outcomes and expand access to care; green product sales reached 52% of total sales and 55% of the company’s energy usage came from renewable sources.

#2

PHILIPSImproving people’s lives through meaningful innovation

THE NUMBERS

OVERALL

PURPOSE & STORY

COMMUNICATION

PERFORMANCE

BEHAVIOUR

85.5%

95.7%

73.3%

93.3%

76.2%

TWO YEARS AGO, WE DECIDED TO EMBED CIRCULAR-ECONOMY THINKING IN OUR STRATEGIC VISION AND MISSION, BOTH AS A COMPETITIVE NECESSITY AND WITH THE CONVICTION THAT COMPANIES SOLVING THE PROBLEM OF RESOURCE CONSTRAINTS WILL HAVE AN ADVANTAGE. WE BELIEVE THAT CUSTOMERS WILL INCREASINGLY CONSIDER NATURAL RESOURCES IN THEIR BUYING DECISIONS AND WILL GIVE PREFERENCE TO COMPANIES THAT SHOW RESPONSIBLE BEHAVIOUR – SOMETHING WE ARE ALREADY SEEING.

Franz van HoutenChief Executive Officer


Case studyLife can’t be planned and when babies are born prematurely, there’s nothing more important than ensuring they have the right space to develop and grow stronger.

Partnering with Mangiagalli hospital, Philips has developed a unique environment designed to boost new babies’ immune systems and protect them from light and noise, transforming a place of struggle between life and death into a place that enhances mother and baby’s natural rhythms.


WHAT WE LOVE Lloyds Banking Group’s purpose is rooted in the company’s heritage, driving a desire to enhance Britain’s economic and social wellbeing. And it’s not merely a statement: when it comes to putting their purpose into action, Lloyds Banking Group really is leading the way.

An interactive map of the UK that showcases how – and precisely where – Lloyds Banking Group has helped Britain prosper. It’s a rich archive showcasing their commitment, contributing to cementing trust in a sector overcoming reputational issues.

The Helping Britain Prosper Plan spells out their approach to tackling big issues affecting British society today, setting clear long-term targets. The Plan is updated yearly with indications of Lloyds Banking Group’s achievements and what it will take to reach the goals they’ve set for the future. For example, one of their metrics is the ‘increased amount of new funding support provided to UK manufacturing businesses per year’. They have achieved their 2014 target for this, setting a 2015 target of £1 billion alongside a 2017 target of £4 billion.

There is a strong drive to enable employees to engage in purpose-related activities. The group’s Day to Make a Difference programme enables people to spend at least one day per year volunteering for a charity or community project of their choice. Since 2010 over 82,000 colleagues have taken part in it.

#3

LLOYDS BANKING GROUPHelping Britain prosper

THE NUMBERS

OVERALL

PURPOSE & STORY

COMMUNICATION

PERFORMANCE

BEHAVIOUR

82.9%

82.6%

93.3%

80.0%

76.2%

THE HELPING BRITAIN PROSPER PLAN MAKES BEST SENSE FOR OUR GROUP BECAUSE OF OUR SCALE AND PRESENCE IN COMMUNITIES ACROSS BRITAIN. AS A RESULT, WE BELIEVE NO OTHER BANK IS BETTER PLACED THAN LLOYDS BANKING GROUP TO HELP BRITAIN PROSPER. WE ARE PROUD OF WHAT WE HAVE ACHIEVED SO FAR BUT WE KNOW THAT THERE IS A LOT MORE HARD WORK AHEAD.

António Horta-OsórioGroup Chief Executive


Case studyWhen using a bank, 66% of people with dementia need some assistance.

Working with the Alzheimer’s Society, Lloyds Banking Group have created the Dementia-Friendly Financial Services Charter, a new financial charter addressing an ageing population, of which an increase of dementia sufferers is an inevitable side-effect.


WHAT WE LOVE As the world’s largest education company, Pearson’s purpose is absolutely ownable and unique to them. Their brand promise ‘Always learning’ complements it well.

‘Helping people make more of their lives through learning’ is present everywhere when it comes to their dotcom and social media channels, acting like a red thread that brings the meaning behind their purpose to life, allowing people to engage with it.

The company has publicly pledged to report on the effectiveness of their entire range of products from 2018, but they are not waiting until then to get started. In fact, through their Efficacy website, they’ve already started to offer a view of their own performance, letting people judge for themselves whether Pearson helped someone make progress in their life. Moreover, they are inviting the global community to join and collaborate to change the way education’s impact is measured.

#4

PEARSONTo help people make more of their lives through learning

THE NUMBERS

OVERALL

PURPOSE & STORY

COMMUNICATION

PERFORMANCE

BEHAVIOUR

82.3%

95.7%

93.3%

60.0%

81.0%

FOR EDUCATION TO REALLY WORK IT NEEDS TO NOT ONLY PROVIDE ACCESS, BUT ENSURE PROGRESS...

BY STANDING AT THE INTERSECTION OF NEW TECHNOLOGY AND GOOD TEACHING PRACTICES, WE CAN MAKE LEARNING MORE ACCESSIBLE, RELEVANT AND MORE RELEVANT FOR MORE PEOPLE AROUND THE WORLD.

John FallonChief Executive Officer


Case studyMost of us take for granted being able to fill out a form at the hospital, vote in an election, or say hello to a loved one with a text message. But one in every ten of us around the world can’t read, making these simple things a big challenge for millions of people.

By partnering and providing organisations, communities and families the tools and resources to combat illiteracy, Pearson’s Project Literacy has set the goal that by 2030 every child will grow up literate.


WHAT WE LOVE Nestlé’s purpose – ‘Good food, good life’ – is central to the business and the sustainability strategy and we love how they spell out their deeper sense of responsibility: ‘Being a global leader brings not only a duty to operate responsibly, but also an opportunity to create long-term positive value for society.’

They’re doing particularly good work when it comes to our performance criteria. To support the long-term goal of ‘Creating Shared Value’, Nestlé crafted 38 commitments that ask for the direct contribution of a wide range of stakeholders. Through their online dashboard the company lets anyone explore how they’re doing with their aim to meet all their goals by 2020.

The ‘partnership and collective action’ section of the Creating Shared Value report is well worth a read as it inspires the implementation of best practice. It demonstrates clearly how the company engages in collective activities with partners and like-minded stakeholders at a global and a local level to achieve sustainable results.

#5

NESTLÉEnhancing people’s lives by offering tastier, healthier food and beverage choices at all stages of life and at all times of the day

THE NUMBERS

OVERALL

PURPOSE & STORY

COMMUNICATION

PERFORMANCE

BEHAVIOUR

80.5%

87.0%

80.0%

93.3%

61.9%

CREATING SHARED VALUE. THESE THREE WORDS ARE ACTUALLY COVERING THE FUNDAMENTAL WAY WE WANT TO BEHAVE AS A COMPANY AND ALSO AS PEOPLE. THERE’S A FUNDAMENTAL WAY WE WANT TO GO ABOUT OUR ACTIVITIES AND IT IS REPRESENTED BY THE CONVICTION THAT A COMPANY TO BE MEANINGFUL AND SUCCESSFUL OVER TIME HAS TO INTERSECT WITH SOCIETY IN A VERY POSITIVE AND CONSTRUCTIVE WAY.

Paul BulckeChief Executive Officer


Case studyToday, agricultural work is less appealing for younger generations in many regions of the world, affecting the reliability and quality of food supply.

In Venezuela, Nestlé is helping to make cocoa production a livelihood of choice, one that leads to higher incomes and improved social conditions through its Nestlé Cocoa Plan. Since 2008 they’ve provided technical assistance and training in good agricultural practices, almost duplicating the production of cocoa in the area.


WHAT WE LOVE GSK have an ownable, concise and inspiring purpose that clearly differentiates them from other companies in the sector.

Their purpose is central to the brand story and is used across social media, dotcom and reports to build a compelling narrative and engage with all their audiences.

GSK communications are supported with quality case studies, demonstrating how they translate purpose into real impact. Their work is diverse – from investing in an underfunded disease that affects only a small number of people globally or joining forces with the WHO to contribute to the fight against Ebola.

Embracing an open approach to partnering, they appreciate that outside support can help addressing the health needs of people around the world. In 2014, GSK invested US$1.8 million in research on malaria vaccine, working with the Bill and Melinda Gates Foundation.

#6

GSKTo help people do more, feel better, live longer

THE NUMBERS

OVERALL

PURPOSE & STORY

COMMUNICATION

PERFORMANCE

BEHAVIOUR

80.2%

87.0%

93.3%

73.3%

61.9%

HOW WE OPERATE IS JUST AS IMPORTANT TO US AS DELIVERING FINANCIAL PERFORMANCE. WE BELIEVE OUR COMMITMENT TO RESPONSIBLE BUSINESS WILL BRING LONG-TERM, SUSTAINABLE BUSINESS BENEFIT.

Sir Andrew WittyChief Executive Officer


Case studyIn the last 25 years, the global incidence rate of polio has been cut by 99%, but the final 1% is proving very challenging. Polio is still endemic in certain areas of Africa and the Middle East.

GSK’s has delivered 396 million doses via GPEI to the countries that most needed it, being recognised by the WHO as vital to the eradication effort.


WHAT WE LOVE PepsiCo pioneered a new way of doing business when, seven years ago, they articulated their promise, ‘Performance with Purpose’, driven by its CEO’s strong advocacy and belief that companies and society can thrive together. Since then, they’ve integrated their commitment to human, environmental and talent sustainability into all their operations to drive long-term growth. This ability to translate purpose across different dimensions of the business is something we haven’t often seen in many other US-based companies in our sample. Indeed, the impressive scores for behaviour indicate that PepsiCo are best in class when it comes to getting their people on board with their purpose too.

Setting targets to align performance with purpose, the company has managed to leave its mark around the world, achieving great things like water-flow savings of more than 14 billion litres per year or packaging 750,000 meals’ worth of food in one day for those in need, to name just a few.

Celebrating their 50th birthday this year, PepsiCo are demonstrating their willingness to extend their legacy of success for decades to come – by continuing to align what is good for the business with what is good for society and the planet.

#7

PEPSICODelivering top-tier results in a way that sustains and respects business, society and the planet

THE NUMBERS

OVERALL

PURPOSE & STORY

COMMUNICATION

PERFORMANCE

BEHAVIOUR

80.1%

78.3%

86.7%

60.0%

90.5%

PEPSICO HAS SHOWN HOW A CLEAR, FOCUSED SUSTAINABILITY AGENDA CAN BE INGRAINED INTO A COMPANY’S DAILY OPERATIONS, BE A POWERFUL RALLYING CRY AMONG EMPLOYEES, DRIVE STRONG PERFORMANCE AND UNLOCK SHAREHOLDER VALUE.

Indra K. NooyiChairman and Chief Executive Officer


Case studyIn partnership with the Asian Football Development Project, PepsiCo’s programme ‘Kick for Hope’ is using football as a tool for social development and touching the lives of thousands of people in 18 countries.

Beyond the sports community, this is a powerful initiative that encourages health and wellbeing as well as provide new pathways for young women and children to achieve their dreams.


WHAT WE LOVE In 2007, the team at M&S developed and delivered Plan A, revolutionising how corporate brands approach sustainability strategy. Moving sustainability from compliance exercise to opportunity, the strategic long-term view demonstrates an intention to create value for society at large while ensuring enduring business results.

An aim to become the world’s most sustainable retailer has driven the company since then and after five years they refreshed their strategy as well as their targets until 2020, to accommodate a changing world.

Today, they employ a collaborative approach to tackle their challenges. Their Plan A Challenges website is an open platform inviting businesses, academia or individuals to share ideas which will solve the challenges M&S present for the benefit of everyone.

Unusually for brands in our sample, actions speak louder than words here. Articulation of purpose scores less well than the extent to which it’s embedded in communications, behaviour and performance.

#8 MARKS & SPENCEREnhancing lives. Every day.

THE NUMBERS

OVERALL

PURPOSE & STORY

COMMUNICATION

PERFORMANCE

BEHAVIOUR

78.8%

65.2%

86.7%

86.7%

76.2%

I BELIEVE PLAN A SHOULD REPRESENT MORE THAN A BETTER WAY OF WORKING; IT SHOULD MATERIALLY IMPROVE OUR CUSTOMERS’ AND PARTNERS’ EXPERIENCE OF M&S. IT SHOULD INSPIRE AND ENGAGE THE MILLIONS OF PEOPLE WHO VISIT OUR SHOPS WORLDWIDE EACH WEEK BY HELPING US DELIVER OUR CORE PURPOSE.

Marc BollandChief Executive Officer


Case studyM&S are on a mission: by 2020, they want to get 50% of their cotton from sustainable sources. And they’re working with the WWF in India to make this happen. Thanks to this partnership, 18,500 farmers are already earning 114% more, using 16% less water and 18% fewer pesticides.


WHAT WE LOVE Kingfisher’s purpose is simple yet effective and highly attributable to them. The welcoming brand strapline ‘Better homes, better lives’ enriches the meaning of their purpose, which is integrated within their dotcom, annual and sustainability report.

Their ambition, to create positive change in their business and in the world, is summarised in their ‘Becoming Net Positive’ idea and substantiated by four focus areas with targets attached to them for 2020. The Net Positive Report also presents a commercial model to implement plans across the group, integrating sustainability into their core business in a locally relevant way – and contribute to goals overall.

They offer strong purpose-related KPIs that highlight the impact they made, such as £600 million estimated savings for customers who have purchased energy efficient products and services from Kingfisher or £375 million in sales of their most innovative eco products.

#9

KINGFISHERHelping people have better and more sustainable homes

THE NUMBERS

OVERALL

PURPOSE & STORY

COMMUNICATION

PERFORMANCE

BEHAVIOUR

77.7%

91.3%

86.7%

80.0%

52.4%

OUR LONG-TERM AMBITION IS TO CREATE A POSITIVE IMPACT IN THE WIDER WORLD. WE WANT TO PLAY OUR PART IN CREATING A SOCIETY THAT IS BETTER FOR ALL. WE CAN ONLY DO THIS BY MAKING SUSTAINABILITY PART OF EVERY BUSINESS DECISION WE TAKE.

Véronique LauryChief Executive Officer


Case studyCustomers have saved 8.6TWh of energy thanks to the energy-saving products they’ve purchased from Kingfisher since 2011. This equates to enough energy to power almost 900,000 houses for one year. The company estimates that this is saving its customers over £600 million a year based on the average UK household energy bill.


#10

ROLLS-ROYCEDeliver better power for a changing world

WHAT WE LOVED Rounding out our Top 10 is Rolls-Royce. Their purpose is aspirational, driving their story of who they are, what they do and what they stand for. The company is particularly active on social media channels where they constantly engage with people and show they are delivering their ambitions.

The company offers a wide range of detailed case studies to show how they live up to their promises. This, for example, could be producing natural gas fuelled engines that reduce CO2 emissions by 22%, enabling the world’s cleanest ferries to operate.

Their KPIs also clearly report how they are doing. For example, in 2014 Rolls-Royce invested £4 million in energy efficiency improvement projects and showed a 31% increase since 2013, with £10.6 million invested in supporting communities.

Last but not least, we like the interactive dashboard of ‘higher stretching targets’ Rolls-Royce use to articulate how they are accelerating progress and invite people into the conversation. We also look forward to seeing how performance and behaviour scores increase over time.

THE NUMBERS

OVERALL

PURPOSE & STORY

COMMUNICATION

PERFORMANCE

BEHAVIOUR

77.4%

87.0%

86.7%

73.3%

61.9%

OUR STRATEGY FOCUSES ON CUSTOMER, INNOVATION AND PROFITABLE GROWTH TO ENSURE A SUSTAINABLE BUSINESS. FOR ROLLS-ROYCE THAT MEANS GROWING OUR BUSINESS WHILST ACHIEVING A POSITIVE ECONOMIC, SOCIAL AND ENVIRONMENTAL IMPACT.

Ian DavisChairman of the Board


Case studyThere are over 3,100 vessels on the Environmental Ship Index. Rolls-Royce have some of the most environmentally friendly ferries on the list.

From their LED lighting that reduce energy consumption, to their gas-powered Bergen engines that emit zero oxides of sulphur, reduce oxides of nitrogen by 98% and cut dioxide emissions by 23%, Rolls-Royce delivers remarkable, and purposeful, ferries.

34 | RY FIT FOR PURPOSE INDEX | OUR DISCOVERIES

THE INSIGHTS: WHAT DID THE DETAIL TELL US?

RY FIT FOR PURPOSE INDEX | OUR DISCOVERIES | 35

OUR DISCOVERIES

We had two questions when we began this research.

Firstly, how many companies are embracing the idea of purpose? Is purpose for everyone, or for the few that are more socially aware?

Secondly, and perhaps more importantly, we wanted to understand whether purpose is shifting the way organisations do business.

At first glance, we were surprised to find that over 75% of our sample state they want to make a difference in people’s lives and society’s wellbeing. This shows that, across sectors, corporates are clearly realising the value of having a social purpose. Corporations that act in the interest of the greater good are here to stay, and brands can no longer afford to ignore it.

However, we also found only the top scoring companies tell us they are making purpose intrinsic to their business model. This came as no surprise. It’s easy to commit to a purpose, but it is much harder to shape your business around it.

For some, this may be discouraging, but through our analysis we found some fantastic examples of organisations that are well on the way to making purpose central to their business.


PURPOSE ISAS PURPOSE DOES

Creating your purpose statement is the first step.

Not entirely an easy one, but perhaps the easiest of a long-term transformation. As shown on the chart below, it’s integrating purpose into everything in your organisation when it starts getting trickier – from Communications, to Behaviours, to Performance. The more in-depth you go, the harder it gets.

Making purpose part of the bigger pictureTalking about your purpose through your dotcom and your campaigns is incredibly important. This is how you engage your customers and consumers with your wider mission. But wholesale transformation only begins when purpose connects to your business model. How does your company’s purpose deliver profitability and a competitive advantage? How will you measure the non-financial value you create? And is purpose playing a role in your people’s everyday work?

These are the tough questions to crack. Aspirational? Yes. Idealistic? No. Our research shows that this is exactly what our top rankers have managed to figure out. They’ve taken the plunge and transformed their businesses – going on record to explain how they will deliver long-term non-financial value. The level of transformation these companies have gone through is a cause for celebration, and in our view, these companies are not only changing the way we do business in the 21st century, they’re changing the world.

PURPOSE & STORY

COMMUNICATION

BEHAVIOUR

PERFORMANCE

64.3%60.5%

55.4%50.3%

The average scores of the sample across our criteria


100

80

60

40

20

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Astra

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John

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John

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BASF SE

Bayer

Danone

Heineken NV

Engie (GDF Suez)

Novartis

BP

Kering

Airbus Group NV

BT Group

Procter & Gamble

VodafoneSky

Saint-GobainLafarge

Coca-ColaSAP SEGE

AB InbevL’OréalRenaultLVMHBank of America

Inditex

TescoTotalINGAnglo Am

erican

Toyota Motor Corporation

Microsoft

AkzoNobel

Barclays

Qualcom

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Cisco System

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Aviva

Banco Santander

Sanofi

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British

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Orange S.A.CVS HealthIBM

IntelFacebookNational Grid

AXAMerck & Co.

Roche

McDonald’s

WPP

Petrobras

Apple

Chevron

JP Morgan Chase & Co.

Industrial & Commercial Bank of China

Enel

Relx Group

Telefonica

Citigroup

AbbVie

Royal Bank of CanadaUnion Pacific

Toronto-Dominion Bank

CentricaDiageo

Generali

BH

P Billiton

UnitedH

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Samsung Electronics

Com

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MEANING WELL IS NOT ENOUGH

Purposeful brands are more than worthy wordsA purposeful brand rolls up its sleeves and turns theory into tangible action – changing processes as much as inspiring advocates. So when it comes to words vs. actions, how well is your brand living up to its social promise?

Words Brands’ score on Purpose and Storytelling

Actions The average score of brands’ across Communications, Performance and Behaviours


EMBEDDING YOUR PURPOSE...

Through our analysis, we have an understanding of the basics that most corporates are doing well. These factors won’t really make your purpose stand out but are essential for any organisation that embarks on this journey.

WHO’S DOING IT RIGHT?

SUSTAINABILITY STRATEGY

CASE STUDIES

DOTCOM

SUSTAINABILITY REPORT

LEADERSHIP

SOCIAL

ANNUAL REPORT

RECRUITMENT

PARTNERSHIPS

VALUES

BUSINESS STRATEGY

BUSINESS MODEL

KPIs

PURPOSEFUL WORK

TARGETS

GOVERNANCE STRUCTURE

0 100%

Criteria companies score well on:

embrace a ‘show, don’t tell’ approachThey offer a compelling range of case studies and stories, and though they may vary a bit in quality, they clearly demonstrate how they’re contributing to people’s lives and society’s wellbeing

communicate their purpose through their dotcomPurpose is being heroed across corporate websites – whether it sits on the homepage, their ‘About us’ section or an inspiring microsite, it tends to be easily identifiable and accessible for most organisations

of companies’ sustainability strategies are fully aligned with their purposeCompanies with a defined purpose or social intent are clearly aligning it with their sustainability strategy and report, reflecting this through a long-term strategy with proven materiality


demonstrate how purpose is intrinsic to the business strategyCompanies like Vodafone and Siemens have integrated purpose into their business strategy, demonstrating how purposeful actions are contributing to the business competitive advantage, profitability and long-term business value

tell us purpose is at the heart of their business modelM&S and AstraZeneca have created fully integrated business models, centred around creating a wider value for multiple stakeholders and shaped by a clear purpose

have targets that prove their commitment to demonstrate progress towards their purposeThe best companies have clear short-, medium- and long-term (+ten years) measurable targets aligned with their purpose. For example, Kingfisher’s Net Positive Plan is supported by specific targets and its supporting pillars of Timber, Energy, Innovation and Communities

describe how their governance structures support the delivery of their purposeFrom Unilever, that has fully integrated its Marketing and Sustainability areas, to Group Danone that has created a specific role, Chief Manifesto Catalyst, organisations are developing structures for coordinated purposeful thinking, innovation and delivery

integrate purpose to employees’ everyday workKering is giving opportunities to employees to do purpose-related work, beyond philanthropy. Through Kering Foundation and Kering University, employees have solidarity missions with craftswomen around the world to help strengthen their local businesses

...AND GETTING IT RIGHT

We identified what makes an organisation achieve recognition for their purpose. Unsurprisingly, these elements demand commitment, belief and leadership across the organisation.

Discovering what matters the mostOur research shows there’s a direct correlation between having a clearly stated purpose and overall Index score. Companies with an implicit social intent received an average overall score of 57%, while organisations with a clearly stated purpose which meets a world or societal need are scoring, on average, 65%.

Why? As we stated at the beginning, making a contribution to the world is not necessarily a new thing. Yet, in this ever-connected and networked world, in which organisations are more diverse and complex than ever before, purpose is becoming a key element that holds everything, and everyone, together. A well-articulated, meaningful purpose becomes relevant to employees across cultures, it cuts through business clutter and over-complexity and gives everyone a clear and simple vision to focus on and unify their endeavours. Not only that, a powerful purpose connects companies to the world around them, giving all stakeholders – from customers and consumers to NGOs and governments – a reason to care, with a motivation for their existence that’s in everyone’s interests.


ACTIONS SPEAK LOUDER THAN WORDS

The Word-Action Gap

While overall scores per sector are important, it’s also key to look at whether a company’s stated purpose aligns with their activities. That’s why we explored the Word-Action Gap – to assess the difference.

To work this out, we compare each organisation’s score in the Purpose & Story criteria against their scores across the communication, performance and behaviour criteria.

SectorWord score

Action score

Word-Action Gap

Utilities 53.9% 54.4% 0.5%Industrial Goods 65.9% 62.3% -3.6%Basic Materials 54.5% 49.1% -5.3%Consumer Goods 70.6% 63.7% -6.9%Services 63.5% 55.0% -8.5%Financial Services 58.6% 49.8% -8.8%Conglomerates 76.5% 67.0% -9.5%Technology 66.8% 51.8% -15.0%Healthcare 72.9% 55.8% -17.1%

Healthcare crisisConversely, the healthcare sector has done a brilliant job of articulating their purpose.

Every company from our sample in this sector has articulated their reason for being in the form of a social purpose, scoring an average of 72.9% for their articulation of that purpose. However, when it comes to putting their purpose into practice, they fall down the scale a little. This makes for quite a large gap between how they articulate their social role and how they deliver on it. They may be relying on the intrinsic nature of their business to tell a ‘good’ story, but in this transparent world, we demand more than statements. So the question is, what can the sector learn from Novo Nordisk, whose ‘Action’ scores have outperformed their ‘Word’ score?

Goods vibrationsOr perhaps there’s something to be learned from Conglomerates and Consumer Goods? Companies in these sectors have figured out not only why they exist, but also what to do to make an impact on society at large. From Kering’s Environmental P&L and Unilever’s Human Rights Report, to Philips’ Community Life Centers, these sectors are clearly putting their purpose into action, and letting their customers, employees and investors know they are serious about making change happen.

RY FIT FOR PURPOSE INDEX | SECTOR OVERVIEW | 41

THE SECTORS: WHICH

INDUSTRY IS FITTEST?

50.3%Basic Materials

69.3%Conglomerates

66.0%Consumer Goods

51.9%Financial Services

59.9%Healthcare

65.2%Industrial Goods

55.7%Services

55.4%Technology

54.3%Utilities

42 | RY FIT FOR PURPOSE INDEX | SECTOR OVERVIEW

SECTOR BY SECTOR FIT FOR PURPOSE INDEX


BASIC MATERIALS

PURPOSE & STORY

COMMUNICATION

PERFORMANCE

BEHAVIOUR

OVERALL INDEX SCORE

60.2%

50.1%

55.1%

57.4%

50.9%

50.2%

46.2%

50.3%

64.3%54.5%

ALL COMPANIES BASIC MATERIALS

The top five in this sector

BASF

73.9%

Best in sector:

Bayer

73.8%

Best in sector:

BP

72.6%

Best in sector:

Total

67.1%Anglo American

66.6%

Is the Basic Materials sector Fit for Purpose?The Basic Materials sector is an unusual one – our everyday lives depend on it immensely, yet the majority of its activities are far removed from the end user. This may explain why the sector has such a low score – it is the lowest performing sector in our analysis and none of its companies made it into the top ten. More than 75% of companies in this category have a purpose, and this goes to show that simply having a purpose statement is meaningless on its own. What is interesting about this sector is the vast difference in scores, with European companies outshining their international counterparts. BP in particular scores very well given the recent challenges it has faced.

Purpose & story

Communication

Performance

Behaviour


CONGLOMERATES

PURPOSE & STORY

COMMUNICATION

PERFORMANCE

BEHAVIOUR

OVERALL INDEX SCORE

60.2%

50.1%

55.1%

57.4%

74.7%

65.3%

61.0%

69.3%

64.3%76.5%

ALL COMPANIES CONGLOMERATES


Philips

85.5%

Best in sector:

Siemens

75.9%GE

70.3%

Best in sector:

LVMH

67.8%

Best in sector:

Samsung Electronics

46.9%

Is the Conglomerates industry Fit for Purpose?The performance of Conglomerates has been one of the big surprises of this study. Given the scope of their operations and territories in which they operate, one might assume the sector would struggle to form a unifying purpose, and worse still to embed it – but quite the opposite is true. Conglomerates are the highest scoring sector – perhaps because they see purpose as a way of unifying their diverse and complex companies. Philips is the best of the Conglomerates and made it to an impressive second in our overall rankings. Of the three US Conglomerates in our sample, GE is the only one who could be included, and they perform extremely well, most noticeably when it comes to their corporate communications.


CONSUMERGOODS


Unilever

89.3%

Best in sector:

Nestlé

80.5%

Best in sector:

PepsiCo

80.1%

Best in sector:

Danone

73.7%Heineken

73.6%

Is the Consumer Goods sector Fit for Purpose?The Consumer Goods sector fares rather well in our analysis – it has the second highest average score, and the second highest concentration of companies with a purpose, after Healthcare. Many of the companies in this sector have borne the brunt of heavy public criticism in recent years, from Nestlé’s baby milk scandal to PepsiCo and Coca-Cola becoming scapegoats for the rise in obesity in the US and Europe. It may partly be in response to this that the sector scores well above average for communication. Many have major purpose-related campaigns and maintain an active and engaging social media presence. This sector includes three of our top ten, equalling the Service sector, and contains our overall winner, Unilever.

PURPOSE & STORY

COMMUNICATION

PERFORMANCE

BEHAVIOUR

OVERALL INDEX SCORE

60.2%

50.1%

55.1%

57.4%

70.0%

57.9%

63.2%

65.3%

64.3%70.6%

ALL COMPANIES CONSUMER GOODS

FINANCIAL SERVICES

PURPOSE & STORY

COMMUNICATION

PERFORMANCE

BEHAVIOUR

OVERALL INDEX SCORE

60.2%

50.1%

55.1%

57.4%

53.0%

45.5%

51.0%

51.9%

64.3%58.6%

ALL COMPANIES FINANCIAL SERVICES


Lloyds Banking Group

82.9%

Best in sector:

Bank of America

67.6%ING

66.8%

Best in sector:

Barclays

64.5%Aviva

63.8%

Is the Financial Services sector Fit for Purpose?Out of all the sectors we’ve analysed, Financial Services is one that has suffered some of the harshest criticism in recent years. With backlashes from the public due to the PPI scandal in the UK, and of course the Global Recession, the sector has its work cut out if it wants to fall back in favour with consumers and stakeholders alike. It is then somewhat concerning that it is one of the worst performing sectors and scores below average in all the areas we analysed. There were, however, exceptions, such as Lloyds Banking Group who have shown real commitment to implementing their purpose of ‘Helping Britain Prosper’. Following a familiar trend, it is the European companies which once again outshine their international counterparts in this sector.



HEALTHCARE

PURPOSE & STORY

COMMUNICATION

PERFORMANCE

BEHAVIOUR

OVERALL INDEX SCORE

60.2%

50.1%

55.1%

57.4%

64.0%

47.6%

55.9%

59.9%

64.3%72.9%

ALL COMPANIES HEALTHCARE


GSK

80.2%

Best in sector:

AstraZeneca

75.1%Novo Nordisk

75.0%Johnson & Johnson

74.0%

Best in sector:

Novartis

72.8%

Is the Healthcare sector Fit for Purpose?Healthcare is the only sector where every constituent has a purpose, and the majority of these address a human or world need. Being in the business of healthcare, you don’t have to make much of a leap to make your purpose answer to a human need.

However, formulating a purpose is just the first hurdle, and it is in implementing and truly embedding their purpose that many companies appear to struggle. In this sector we witness a regional divide, European companies tend to score well while their US counterparts lag behind. Some of this can be put down to differences in reporting styles, but many of the US companies appear less proactive in ensuring their purpose is present at all levels and areas of the organisation.

Our top scorer was GlaxoSmithKline, whose purpose of helping people to ‘do more, feel better, live longer’ is evident in all the areas we examined. GSK’s achievement here shows the power of having a purpose. The company, along with many of its partners in the industry, has faced much criticism in recent years over issues such as corruption in its Chinese operations, to concerns about access to medicine for those who need it most. The remaining companies in this sector had a great purpose but are still struggling either in its communication or in embedding it across its performance and behaviours.


INDUSTRIAL GOODS

PURPOSE & STORY

COMMUNICATION

PERFORMANCE

BEHAVIOUR

OVERALL INDEX SCORE

60.2%

50.1%

55.1%

57.4%

71.1%

55.5%

60.3%

63.3%

64.3%65.9%

ALL COMPANIES INDUSTRIAL GOODS

The top four in this sector

Rolls-Royce

77.4%

Best in sector:

Airbus Group

71.9%Saint-Gobain

71.1%

Best in sector:

Lafarge

70.9%Is the Industrial Goods sector Fit for Purpose?Of all the sectors analysed, Industrial Goods is perhaps the least consumer facing, and the one most focused on business-to-business activities.

With consumer brands leading the way with purpose, it’s perhaps no surprise that this sector has been a bit slow to catch on. Half the companies in this sector have no purpose or social intent, with only four in our Top 100. However, those that do generally score fairly well. Rolls-Royce leads this sector and also makes it into our Top 10, closely followed by three French companies who all make a strong showing. These results dispute the much-repeated view that purpose is a consumer-focused exercise, because these companies are clearly finding value in being more purpose-driven.


SERVICES

PURPOSE & STORY

COMMUNICATION

PERFORMANCE

BEHAVIOUR

OVERALL INDEX SCORE

60.2%

50.1%

55.1%

57.4%

57.8%

52.9%

54.3%

57.3%

64.3%63.5%

ALL COMPANIES SERVICES


Pearson

82.3%

Best in sector:

Marks & Spencer

78.8%

Best in sector:

Kingfisher

77.7%Sky

71.2%Tesco

67.2%

Is the Services sector Fit for Purpose?The Service sector is unique given the wide range of companies it includes, and the huge scope of activities they undertake. Three of the companies from this sector contribute to our Top 10; however, the sector as a whole performs slightly below average. Given this sector’s high levels of interaction with consumers, it is clear that more needs to be done to ensure purpose is translated into every area of their organisation.


TECHNOLOGY

PURPOSE & STORY

COMMUNICATION

PERFORMANCE

BEHAVIOUR

OVERALL INDEX SCORE

60.2%

50.1%

55.1%

57.4%

60.8%

40.8%

59.1%

56.8%

64.3%66.8%

ALL COMPANIES TECHNOLOGY


BT Group

71.8%

Best in sector:

Vodafone

71.3%

Best in sector:

SAP

70.4%

Best in sector:

Microsoft

66.1%

Best in sector:

Qualcomm

64.4%

Is the Technology sector Fit for Purpose?This is rather surprising for a sector whose businesses are vital in today’s interconnected world. Can you imagine a day without Internet access, or without the opportunity to call from your smartphone or even without using Facebook or Google?

To be fair, US companies approach reporting differently to European companies, so we had limited access to information to assess how their purpose relates to their business model, KPIs or business strategy. Consequently, the sector score is heavily penalised. However, nothing prevents American companies from connecting purpose into their business performance and sharing how they are doing it in the future.


UTILITIES

PURPOSE & STORY

COMMUNICATION

PERFORMANCE

BEHAVIOUR

OVERALL INDEX SCORE

60.2%

50.1%

55.1%

57.4%

58.7%

52.0%

52.4%

54.3%

64.3%53.9%

ALL COMPANIES UTILITIES

The top four in this sector

Engie

72.9%

Best in sector:

National Grid

55.7%Enel

51.5%Centrica

48.0%Is the Utilities sector Fit for Purpose?The Utilities sector is one of the lowest scoring sectors in our analysis, and none of its constituents makes the Top 10. With the exception of French energy giant Engie (formerly GDF Suez), all companies in this sector make a poor showing – this is the same regardless of geography or company size.

We rely on utility companies every day, and while many have enjoyed monopolistic positions in the past, there is growing evidence that consumers are more concerned than ever about who supplies them with their utilities. And they’re voting with their feet, moving towards smaller, challenger brands that are more aligned with their values. This shows that even in industries with comfortable margins, looking after more than your shareholders matters.

52 | RY FIT FOR PURPOSE INDEX

CONTRIBUTORS

Who inspires us?Last but not least, we recognise not every company made it into our ranking given the sample we used, so we asked the team who worked on this report to tell us about the purposeful brands that inspire them:

Andrew Gorman, Managing DirectorGMN: I’ve always respected GMN for their long held enduring social purpose, committing them to promote the liberal interest which, the great Manchester Guardian editor CP Scott asserted as having ‘a moral as well as material existence’.

Ben Richards, Consulting DirectorWholeFoods: It’s unusual for a business that meets such basic needs to be founded on such a strong point of principle, and for that principle to enable the business to gain such scale. Courage, integrity and love all feature in their stated purpose.

Dan Jones, ConsultantChange.org inspires me because of the impact it has had on raising awareness and creating social movements. It democratises campaigning – no matter who you are or where you live you can still have your voice heard.

Emily Haynes, Team LeadTony’s chocolonely: Their mission to create 100% slave free chocolate inspires me, but what I like most about it is that it doesn’t take itself too seriously. Their promise, ‘Crazy about chocolate, serious about people’ encapsulates their approach to being a purposeful brand.

Matt Gibbs, ResearcherGood Energy: They quietly offer to be part of the solution to a problem affecting everyone. They empower individuals and businesses to switch their energy supply to renewable electricity, generate their own renewable power and use their energy more efficiently.

Michela Graci, ConsultantStella McCartney: The brand is a driver of change for the future of the whole fashion industry. Stella herself is a strong advocate of protecting the planet and doing good for society at large – while increasing profits.

Paulina Lezama, Team LeadWarby Parker: I love their belief that everyone has the right to see – whether that’s at a ‘revolutionary’ price or as part of their ‘buy-a-pair, give-a-pair’ social programme. Moreover, their attention to the brand experience is impeccable: simple, beautiful and good.

Ruairi Carver Nolan, ResearcherBBC: From broadcasting public service announcements during World War Two, to entertaining millions around the globe today, BBC never loses sight of its aim to ‘enrich people’s lives with programmes and services that inform, educate and entertain’.

Simone Seiter, Senior ConsultantPatagonia: Their continuous growth shows purpose doesn’t come at the expense of profit. By considering and owning up to their responsibility towards all stakeholders – from nature to consumers – Patagonia inspires new consumption behaviours.

EVOLVING AND IMPROVING OUR ASSESSMENTWe are already thinking of ways to progress our next edition of the Fit for Purpose Index edition.

So, if this research has given you a renewed sense of purpose, or you can think of ways to improve it and would like to be involved in the next iteration of this research, please get in touch at [email protected] or +44 (0)20 7033 0700.

If you would like to find out more, please contact us at:

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In this way, we help our clients keep valuable conversations going with all sorts of people, from customers to shareholders to staff.

The relationships that develop as a result tend to be meaningful and enduring.

That’s because we believe in delivering authenticity and clarity.

You won’t ever hear us, for instance, spouting jargon or consultancy mumbo-jumbo.

Our story is that we’ve been working this way since we started in 1986. And we’ve grown every single year since then.

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Documents

FIT FOR PURPOSE 2015 · – Whether the brand has run a purpose-led campaign PURPOSE & STORY All mouth and no trousers Are companies articulating their reason for being in a clear