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Leon Kaye headshot

Is ‘Purpose’ the New Greenwashy Buzzword?

By Leon Kaye

“There is another, more overarching responsibility that companies would be wise not to ignore. . . and that is purpose,” proclaimed Forbes almost seven years ago.

The article continued to explain that businesses with a clearly defined purpose can more effectively leverage their employees’ talents and skills by uniting them around goals that are “bigger than themselves.” In the end, if clearly defined, purpose could become a company’s greatest asset, concluded the article's author.

More companies are adopting the term “purpose” to describe their overall mission, and often tie the word to their sustainability agenda. The publishing giant Pearson, for example, frequently evokes purpose to describe its social mission; recently, the company hosted a Twitter chat with TriplePundit to explore why “social purpose” is so important both to younger employees and companies keen on recruiting them. Beverage and snack food giant PepsiCo touts its overall business and sustainability mission as “performance with purpose.”

Purpose certainly has become a buzzword; one sees it almost as often as catchphrases including “collaboration” and “innovation.” Naturally, one could only ask, is “purpose” simply another fancy term that really is only another way to indulge in “greenwashing?”

According to the London-based marketing and branding consultancy Radley Yeldar, not necessarily. True, some may argue that purpose is not the same as sustainability or corporate social responsibility (CSR); the 2011 Forbes article made a similar point. At the same time, terms such as CSR, sustainability and purpose are often used interchangeably. That may be confusing to some stakeholders, but in the end, if the results are a more responsible and conscious company, then the semantics do not really matter.

The problem, however, is when a company says it is committed to “purpose,” but its actions speak otherwise – just as in the case when a company boasts about being sustainable, responsible or is leading as a “corporate citizen.” If deeds are not behind the words, then stakeholders, and of course, customers, will become disillusioned by the lack of authenticity. Therefore, says Radley Yeldar, risks companies face include the possibility that they could end up indulging in “purpose-wash,” which could hurt their reputation and fray their relationships with key stakeholders.

“If businesses make flimsy promises without really being committed,” said Radley Yeldar in its study, “it’ll have a negative impact.”

Credibility, paired with transparency, is what any long-term mission focused on “purpose” needs in order for stakeholders to understand that the company is striving to do far more than simply launch another public relations campaign.

In the end, the rules for a company that has become committed to “purpose” are not really different than what is needed for an organization to become more sustainable or responsible. At a first glance, a company’s stated purpose may not appear to lend itself to any reliable measuring; but if that company sets goals that are part of this purpose-driven agenda – and is honest about the company’s overall practice – then the company can certainly prove to stakeholders that it is succeeding on this front. Purpose also has to be embedded throughout the organization, and the C-suite should lead by example. “The CEO’s job is to lead a business,” explained Radley Yeldar, “and living the purpose is no different.”

Finally, purpose and profit are hardly mutually exclusive. Just as more companies have realized that being sensitive about human rights in the supply chain or becoming more environmentally responsible does not have to come at the expense of the bottom line, purpose should really transcend profit. After all, purpose can help inspire employees to become more loyal to a company while it can also attract more partners and customers to the business. The results can only be beneficial for that triple bottom line. “For purpose to be truly enduring, it has to be commercially relevant and contribute to long-term value creation,” concluded Radley Yeldar.

Image credit: Radley Yeldar

Leon Kaye headshot

Leon Kaye has written for 3p since 2010 and become executive editor in 2018. His previous work includes writing for the Guardian as well as other online and print publications. In addition, he's worked in sales executive roles within technology and financial research companies, as well as for a public relations firm, for which he consulted with one of the globe’s leading sustainability initiatives. Currently living in Central California, he’s traveled to 70-plus countries and has lived and worked in South Korea, the United Arab Emirates and Uruguay.

Leon’s an alum of Fresno State, the University of Maryland, Baltimore County and the University of Southern California's Marshall Business School. He enjoys traveling abroad as well as exploring California’s Central Coast and the Sierra Nevadas.

Read more stories by Leon Kaye