Chances are you’ve heard about corporate social responsibility. It’s how companies integrate social and environmental concerns in their business alongside profit-making ones.
What about corporate purpose, though? It’s a very useful concept for developing Singapore’s social compact.
The difference?
“Corporate purpose goes beyond traditional corporate social responsibility (CSR) initiatives, such as volunteering initiatives, corporate donations, recycling efforts and other sustainability initiatives,” said Minister for Culture, Community and Youth Edwin Tong at the Company of Good Singapore Summit last week (Jan 12).
This is since a purpose is fundamental. Not grafted onto practices.
“Businesses that are fundamentally oriented towards being a force for good structure themselves and their operations to contribute to society,” said Minister Tong.
Minister Tong released the National Framework & Blueprint on Corporate Purpose that same day, alongside private and public stakeholders like the National Volunteer & Philanthropy Centre.
This is a crucial step in helping Singapore’s corporate landscape become more resilient, sustainable and value-driven.
Accountability and societal challenges
To begin, the Framework & Blueprint will capture data that lets companies see just how well (or not) their corporate purpose impact and journey are doing.
“The impact that corporates can make on societal issues cannot be underestimated,” said Minister Tong, highlighting its importance with the example of food security.
“It is insufficient to rely solely on the People and Public sectors. Corporates need more fundamental changes to business models and activities to move the needle,” he added.
This, after all, is an era where consumers expect grocers, restaurants and other stakeholders in the food industry to address food insecurity.
Enter FoodXervices, a local food wholesaler. It found a new corporate purpose once it discovered that food wastage and food insecurity were happening concurrently in Singapore.
“The founders took action by establishing Food Bank Singapore as a centralised coordinating organisation for all food donation in Singapore,” said Minister Tong.
“In addition, drivers at the logistics company that is one of the three subsidiaries of FoodXervices regularly volunteer their time to deliver food to beneficiaries in Singapore.”
A stronger social compact
Corporate purpose also strengthens the social compact. These purpose-driven businesses build empathy and foster resilience across society.
Here, Minister Tong pointed to the Development Bank of Singapore (DBS) starting the DBS Foundation for social entrepreneurship as well as the geriatric caregiving enterprise Homage.
Their results are impressive. The Foundation has kickstarted over 800 social enterprises since its 2014 founding and Homage has provided over a million caregiving hours across Singapore, Malaysia and Australia since 2017.
And corporate purpose synchronises well in this regard with the Party’s plan for helping Singapore progress.
“This is the intention of the Forward Singapore exercise — to discuss how our social compact must evolve; the role each stakeholder — businesses, government, community organisations, individuals, etc – will play; and what each of us is willing to contribute to build our future,” he said.
Boosting the bottom line
Corporate purpose also makes good business sense during this era of socially-conscious consumers, the Minister pointed out.
“Research shows that as businesses increasingly take environmental, social and governance (ESG) concerns into account, they tend to benefit from better financial performance,” he said.
“In recent years, the global ESG loan market has grown exponentially from less than S$40 billion in 2013 to S$265 billion in August 2022, mostly due to increased interest in sustainability-linked loans.”
He also noted that purpose-driven companies can also retain talent better: a 2021 PricewaterhouseCoopers did show that 75 per cent of Singapore’s respondents would rather work for an organisation that contributes positively to society.
“It is therefore in the long-term interests of businesses to review their corporate purpose, and wield it as a source of competitive advantage,” he said.
“Corporate purpose can be a driver of growth.”
All good. But how does the PAP Government foster this growth driver?
“There are existing structures and incentives in place to support progressive work practices,” said Minister Tong.
“Initiatives such as the Progressive Wage Model jointly developed by the tripartite partners, incentives for workforce training under SkillsFuture, tripartite guidelines around flexible work arrangements and fair employment practices, and incentives for corporate philanthropy.”
The National Framework & Blueprint on Corporate Purpose, then, is for companies which take full advantage of Singapore’s tried-and-tested tripartite framework.
“This is an opportunity for Singapore to demonstrate how profitability and the common good are not mutually-exclusive outcomes,” said Minister Tong.
