So how well are companies measuring the delivery of their purpose and, in turn, using that measurement to drive performance? Unfortunately, for the second year in a row, the majority of our samples struggled in the Performance category. While this is probably the most challenging area to get right, it is key to the credibility of every purpose story to provide evidence of purpose in action.
So where are companies falling short? Too frequently, we see purpose statements that aren’t backed by evidence of integration at a deeper level. Whether that’s a failure to link purpose to the business strategy or a disconnect between purpose and the business model, what is lacking is a clear link between words and actions.
How can business strategy, sustainability strategy, targets and goals all play a role in achieving purpose? Not everyone is doing a bad job in performance. In fact, we’re seeing lots of innovation in measurement and enhanced performance disclosure, particularly in Europe.
And there’s more to come. The IIRC continues to champion innovation in the integrated reporting space, while the EU Non-Financial Reporting Directive will improve extra-financial disclosure within reporting. So we should see greater evidence of purpose displayed through performance in next year’s sample.
This article is part of a series of thought leadership pieces as part of our Fit For Purpose research - to learn more simply download the publication below.