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What is the purpose of a business in 2022?

Article by: Vu Online Ltd

If you ask Google what the purpose of a business is then you’ll probably come across an answer that looks something like this:

“The primary purpose of a business is to maximise profits for its owners or stakeholders while maintaining corporate social responsibility.”

This is the definition that we’ve come to understand and that we base most of our business activity on. When you think about it this is an odd sort of definition because it doesn’t consider the needs of owners or stakeholders beyond that of profits. It effectively says money in your pocket beats health, wellbeing, community and all the other things that contribute to a life well lived. In a time of climate and biodiversity crisis, pandemic disease, war and rampant inflation in which almost 70% of the world’s wealthiest entities are not states but corporations, it’s difficult to make a case for this definition of business being sustainable or in society’s best interests. Many businesses are grappling with how to reshape this definition to truly take into account people, planet and profit. Perhaps we could settle on something like this:

“The primary purpose of a business is to maximise it’s contribution to the local community, support nature positive solutions and make enough profit to thrive.”

As a business community and as individuals we’re experiencing a time of profound change. Costs are rising quickly, food production is leaving forests destroyed, oceans and soil degraded almost beyond use. The stability of our climate and the natural world is unraveling. As we start to see that stability breaking down it becomes clearer that the global markets and distribution networks that we’ve built over the last hundred years or so are not as resilient as we might have imagined. To solve the deep rooted systemic issues that we face will take collaboration on a scale never seen before. As business owners we all have to look beyond the veil of short term commercial advantage and imagine a more balanced and equitable economy with ‘planet’ and ‘people’ as primary beneficiaries.

A new collective purpose

Many established businesses were founded based on the simple idea of achieving a living for the owners and employees. In the early 2000s, few but the most visionary of entrepreneurs were thinking in terms of disrupting markets and creating purpose driven businesses. Today things have changed. Many businesses are started with purpose at their core and still more are seeking a sense of purpose around which they can build a positive and productive culture. The current global crises (climate change and biodiversity loss) present us with the opportunity to align our purpose as businesses and work together – our collective purpose, if we choose it, can be to support nature, our communities and our employees to tackle climate change and the biodiversity crisis. We can continue to try and tackle these issues in isolation, reducing carbon emissions and slowly tip-toeing towards a more sustainable future or we can come together, admit the scale of the task and start shooting for the stars.

Is Carbon reduction enough?

When we think about climate change, we tend to simplify the issue and relate it to one contributing factor – Carbon. The quest to become carbon neutral has dominated the conversation around solving the climate crisis but there are many other factors and other crises that are equally acute and that could be addressed alongside reducing carbon emissions.

As a business community we’re all becoming increasingly aware of the challenges that we face in making our businesses carbon neutral by 2030 (or ideally even sooner). Some businesses in the network (Such as Cobalt Communications) have already achieved this goal but for many of us, including my own business, there is plenty of work to do. There are many ways to offset carbon emissions and these are often easy to access. For example, Ecologi offers a per employee subscription that plants trees on behalf of each of your team. At Vu we’ve invested 1% of our turnover over the last 18 months on planting native woodlands via local charity Moor Trees. This sort of investment in the future is a great thing but we must go much further if we want to reduce harmful emissions and regenerate nature over just a few short years.

Many of the trees that we plant today will never reach maturity and those that do will take many decades to capture their share of the carbon emitted today. Reducing carbon emissions is one piece of the puzzle in tackling climate change but to start improving the world in a meaningful way we’ll all need to consider the wider impact of our activities on nature and support nature based solutions. As an example of the sort of pledges that we could be making, Ecosia (a sustainable alternative to Google Search) recently announced that they’ll be investing 100% of their profits into tree planting. If you are interested in learning more then Ecosia’s financial reports are worth a look:

Contributing to Nature Positive Solutions

There are now many remarkable nature based solutions which require serious investment and are very likely to provide a considerable return. Take for example regenerative agriculture – a proven approach to food production that provides multiple benefits including producing higher quality food, vastly improving the quality of soil, minimising use of chemicals (pesticides and fertilisers), increasing profitability for farmers and increasing biodiversity. In Devon, we have organisations like The Apricot Centre that are engaged in training the next generation of regenerative farmers who can begin to roll these techniques out around the country. Long term thinking is required to make regenerative farming the default approach to food production in the UK and we, as a business community, can take a leading role in ensuring that progress is not inhibited by a lack of investment.

Article by Richard Wain – Director

Vu Online Ltd

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