How Business Leaders Can Approach Purpose, Culture and ESG
A discussion with renowned economist Mohamed El-Erian on the business value of purpose, culture and ESG initiatives.
Many companies are spending more time focusing on company culture and purpose. While related, purpose and culture are different. A company’s purpose is what it stands for, beyond products or services. Company culture is how that purpose comes to life through shared values.
In this video, economist Dr. Mohamed El-Erian and Capital One’s Dave Kucera shared perspectives on purpose, culture, and the growing environmental, social and corporate governance (ESG) movement.
“People want to work for purpose-led institutions,” said El-Erian. By prioritizing purpose and culture, businesses can earn buy-in not only from their employees, but also their customers and communities.
The importance of a company’s purpose is that it serves as an anchor, El-Erian explained. “And never has this anchor been as important as when you are facing this incredibly wide range of possible outcomes...So you need something that anchors you, and you need something that allows you not just resilience, but also agility.”
ESG is gaining momentum and becoming a part of business sustainability.
In addition to purpose and culture, integrating ESG initiatives has become a critical business priority for companies worldwide. Three key stakeholders are influencing this shift:
- Consumers: Customers are looking at companies’ ESG commitments from a purchasing perspective.
- Financial community: Investors are looking at ESG as part of a company’s long-term viability.
- Workforce: Employees want to work for companies that recognize their role in the community and their environmental and social responsibilities.
As companies consider their approach to ESG and map out a plan, El-Erian shared 3 tips to getting it right:
- Communicate honestly: Be honest with stakeholders when communicating your progress.
- Focus on impact: Look for metrics that people can identify with and understand.
- Follow through: Don’t commit to metrics you cannot deliver.
Purpose, culture and ESG are long-term investments.
How companies handle their purpose, culture and ESG initiatives can help build trust with key audiences. When companies get it right, these efforts can positively impact employee, customer and community relationships.
El-Erian is a former chief executive officer, investment analyst, investor and market commentator. He was inducted as President of Queens College at the University of Cambridge in September 2020.
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