What is the purpose of a corporation? For years the answer to that question was the same among the world’s largest companies: to generate profit and serve shareholders.
It’s clear that approach has proved successful for many corporations and individuals over the course of decades. But solely using growth and profit as a guiding principle has not served the best interests of people or the planet. By pursuing profit above all else, companies are led to act in ways which are fundamentally short-sighted and unsustainable. And we are finally coming to terms with that fact.
Good Energy is different in that it was founded with a clear purpose to give consumers the power to tackle climate change by choosing renewable power.
In the 20 years since, and as a recent adviser to the British Academy’s Future of the Corporation programme, I have seen first-hand how thinking has changed among international businesses. For its new Principles for Purposeful Business report, the British Academy spoke to a range of industry voices; from mining companies to private equity firms, from academics to large retailers. They all acknowledge that business as usual is no longer a viable option, that profit should now be a product of a corporation’s purpose, not the sole reason for its existence.
A landmark moment occurred earlier this year at the American Business Roundtable. Since 1997, the group has issued a public statement which defines the purpose of a corporation as serving the interests of its shareholders. But now, the statement has changed to endorse stronger corporate responsibilities, including a duty to “protect the environment by embracing sustainable practices across our businesses.” The group of 181 CEOs includes some of the world’s largest and well-known companies.
The UN’s Sustainable Development Goals (SDGs), a framework for addressing social and environmental impact, are now being taken seriously by corporates as well. Recent research by PwC found that 72% of companies now mention the SDGs in their annual corporate or sustainability report. The goals most cited as a priority are climate action, responsible consumption and sustainable economic growth. These companies recognise they have a central role to play if we are going to achieve the global goals by the 2030 target date.
Businesses can be a tremendous force for good, especially if they focus their attention on solving global problems. At Good Energy, our purpose runs through everything we do and informs how we operate on a day-to-day basis. Back in the 1990s, we realised that to give consumers control over their energy use we needed to grow the market for homegrown, clean power. That’s why we source all our power directly from a group of 1,400 independent generators. This provides customers with an opportunity to grow that market further when they choose our 100% renewable tariff.