A new form of ecosystem is emerging – the purpose ecosystem. What is it and how does it help corporates achieve their sustainability goals? Professors Frederik Dahlmann, Warwick Business School, Joao Porto de Albuquerque, University of Warwick, and co-researchers Wendy Stubbs and Rob Raven of Monash University, explore.
When it comes to discussing the impact of business activities on society and the planet, the focus tends to be placed on one major aspect of the issue – the negative impact of business activities. It has been widely discussed and demonstrated that socio-economic factors – among them consumerism, capitalism, and global value chains – represent major causes of global warming and the subsequent effects of this. Coupled with increasing inequalities, poverty and conflicts, this context has led to the recognition that corporations have a crucial role to play to address these challenges.
In contrast, there has been less discussion about the role that corporations can take to tackle these challenges and develop sustainable activities, as most of the developments have concentrated on the role of politics and society. Yet, experts are calling for rapid and far-reaching changes in business activities and most companies are not well equipped to face these challenges.
One solution has been to propose that companies should review their “raison d’être” and take into account the social and environmental consequences induced by their activities. Nowadays, it even appears that these calls have been heard by companies. Indeed, some of them have introduced social and environmental objectives into their “raison d’être”, have become “B-Corporations”, or have referred to UN SDGs.
Nevertheless, concerns are being raised about the seriousness of these commitments. It is in this context that a myriad of intermediary actors, initiatives and organisations are appearing, whose activities are designed to push companies to review their objectives in view of more sustainable goals and to support the implementation of the UN SDGs. Prof. Dahlmann and his colleagues dub this the “Purpose Ecosystem“.
What is a “purpose-driven” ecosystem?
So what exactly is the purpose-driven ecosystem? According to Dahlmann et al, this is an emerging network of actors which interacts with each other and their stakeholders to help change the purpose of business and achieve the UN Sustainable Development Goals. These actors, private by essence, are defined as “purpose ecosystem actors”. They also include the businesses which decide to become purpose-driven.
All in all, there’s a tendency to study the question of the role of companies in sustainable development from an internal governance perspective, through the angle of purpose-driven business models and the internal organisation of companies. In a different way, researchers who study the “purpose-driven ecosystem” focus on the identification of these new “purpose-driven actors”, their networks and the actions they adopt to bring companies to adopt social and environmental purposes. As such and given the recent, growing interest in this “purpose-drive” network, the first questions are: how it is composed? And how it is organised?
Contrary to traditional networks and NGOs, this ecosystem is characterised by an absence of “structure, governance and coordination” and is composed of independent actors. It also seems that these actors do not even recognize themselves as being part of such a network. Therefore, unlike formal, goal-directed organisations, this new purpose-driven ecosystem forms an informal network. F. Dahlmann, JP de Albuquerque, W. Stubbs and R. Raven propose the following classification of key actors which compose the “purpose-driven ecosystem” (considering that no clear boundaries exist about this ecosystem and that this list is subject to evolve over time).
Making the change, going for corporate sustainability goals
How do these “purpose-driven actors” contribute to the adoption of corporate sustainability goals? A key factor is that of incentives, systems and infrastructures to support the development of purpose-driven businesses. These fundamentally integrate social and environmental objectives into organisational purpose. As such, the “purpose-driven”actors’ efforts are designed to instil change by making companies modify the purpose of their activities. They aim at turning them into purpose-driven organisations themselves and to achieve UN SDGs.
The emergence of this ecosystem is in fact partly linked to doubts raised about the effectiveness of efforts deployed by certain companies in terms of sustainable development. Current developments in this area are nonetheless overflowing and show that many companies are tending, for instance, to set up Science-Based Target Initiatives (SBTIs), as is notably the case in the automotive sector. Yet, for some authors, these initiatives, internal to companies, are insufficient in the face of the urgency and the profound transformations made necessary by the environmental emergency. For others, these efforts are even futile, unless the companies involved understand that they are part of a larger socio-ecological environment.
Similarly, the internal nature of these initiatives tends to isolate them from each other. This is the case, for example, with the increasing use of sustainable materials by industrial companies. The problem remains that no official definition yet exists, so one company may well consider that it has integrated such materials into its products, while others will see these materials as not sustainable. This might even amount to “greenwashing” or “green marketing“, where companies tend to persuade consumers that their products or services are beneficial for the environment rather than focusing on concretely limiting their environmental impact.
As such, doubts about corporations’ compatibility with sustainable activities have led to the development of these “purpose-driven actors” which seek to institute change via a more systemic approach, and aimed at getting companies to adopt non-financial objectives and SDGs in their activities. In their research, F. Dahlmann, JP de Albuquerque, W. Stubbs and R. Raven identified six different types of actions adopted by these actors to reach their objective:
- Some play the role of capacity builder, which consists in providing companies and the purpose ecosystem with resources and tools to face the social and environmental challenges.
- For others, it will be to play the role of communicator, i.e. to raise awareness, inform, educate on the importance of achieving the SDGs through conferences, forums, and webinars.
- Another type of action is collaboration, which aims to connect companies with each other and with their stakeholders, in order to help them implement purpose-driven actions.
- Enablers aim to amplify and share knowledge, resources and tools to help companies think about their business through this lens of purpose.
- As for the “influencers” they seek to influence companies, investors, and even policy makers.
- Finally, the “change makers” support the role of catalysts to create change.
A call for more research on the “purpose-driven ecosystem”
At this stage, the objective of research on the “purpose-driven ecosystem” is not so much, or at least not yet, to determine how the actors that make it up can help companies move towards the SDGs and redefine their objectives. Rather, it is a matter of raising awareness of the emergence of this new form of ecosystem and of their potential importance in responding to the social and environmental challenges already mentioned.
Dahlmann and his co-researchers have highlighted the ecosystem’s lack of organization and collaboration between its actors, many of whom do not identify themselves as part of the same organization. Nevertheless, this informal character also allows the ecosystem to benefit from a wide variety of actors and actions and to invite collaboration rather than coercion. Most importantly, Dahlmann et al’s research has highlighted the fact that its actors tend to pursue the full range of SDGs – and thus seek to contribute to the full range of social and environmental problems facing our world nowadays.
Turning a shade of green
Born of the concerns about the compatibility of business with more sustainable activities, the wide variety of actors that compose the purpose ecosystem seek to push and help businesses redefine their “raison d’être” to achieve the SDGs and move towards sustainable activities. But because of its recent and informal nature, its role in addressing social and environmental challenges remains to be clarified. But once done, maybe that typical focus on the negative impact of business activities would turn a shade or two more green.
- Link up with Frederick Dahlmann, Joao Porto de Albuquerque, Wendy Stubbs, and Rob Raven on LinkedIn.
- Read a related article: How can large corporations become more sustainable?
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