Martin Vander Weyer Martin Vander Weyer

Is corporate ‘purpose’ falling out of fashion?

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Does a change of chief executive at Unilever, the British-based shampoo-to-Marmite multinational, signal the demise of the fashion for corporate ‘purpose’? Alan Jope, who steps down in July, drew scorn when he declared that every brand in his portfolio should ‘stand for something more important than just making your hair shiny… or your food tastier’. His reputation was also dented by the failure of a £50 billion bid for the consumer arm of the pharma giant GSK – but it was his preaching about sustainability and purpose while Unilever’s performance continued to flag that ultimately cheesed off his shareholders.

Jope’s departure after four years in post is not as dramatic as that of Emmanuel Faber of the French foods group Danone, who lasted just nine months after declaring Danone an entreprise à mission or ‘purpose-driven company’. And for a while many other corporate leaders also put ‘purpose’ into every speech and press release – including NatWest chief Dame Alison Rose, who in 2020 wrote of ‘building a Purpose-led bank’ with a capital P.

The move to set social purpose and respect for the planet as corporate objectives alongside or ahead of profit and shareholder value was in part a genuine rethinking of the role of capitalism. It was also a response to pressure from shareholders and consumers to address ‘environmental, social and governance’ (ESG) issues. By now, however, most public companies have adopted targets for emission reductions, workforce welfare and boardroom diversity that cover the ESG bases – while many are also battling for survival in disrupted post-pandemic markets.

Arguably, ‘purpose’ has had a positive impact on corporate attitudes – but that purpose having been fulfilled, we’re hearing a lot less about it as businesses grapple with more urgent challenges. Jope’s successor at Unilever, Hein Schumacher, is described by former Asda boss Allan Leigh-ton as ‘ESG savvy but in a pragmatic and commercial way’.

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