Profit and Purpose - a balancing act that corporations need to get right.

by William McCredie

Environmental impact, social change, and consideration of the Sustainable Development Goals. These factors now more than ever are taking a prominent role in consumer decision making, presenting a growing challenge for businesses - dollar voting. With the widespread use of the internet and social media, information can be liked, reposted, retweeted, upvoted, and shared around the world in seconds. This rapid exchange of information has helped mobilise activism at unprecedented levels, with campaigns such as Black Lives Matter, School Strike for Climate, and even movements such as ‘Cancel Culture’.

With more consumer alternatives available, corporations find themselves at a crossroads - adapt their business model and meet the rapidly changing demands of the modern consumer, or fall out of relevance and be overtaken by competitors.

Take HESTA for example, an Australian Superannuation fund for healthcare and community service workers. They have overhauled their investment priorities in order to create substantial and meaningful change for society, such as dropping all investment into tobacco back in 2013 and being the first major superfund to commit to net zero emissions by 2050. Since realigning their principles to have a more ESG-centric focus, they have attracted new consumers and scored the highest customer satisfaction rating among industry funds in 2021. It is companies like HESTA that have recognised that ESG considerations must not merely be a factor in making changes to a business model, but must now be one of the key foundational pillars that underpin a large part of their operations.