“Moment of truth” for brands that are “purpose-led”

How leading businesses respond to the coronavirus challenge through their partnerships with NGOs, represents a moment of truth for stakeholder capitalism – according to senior professionals from diverse parts of the business and NGO sectors.

Some of the nation’s biggest companies and NGOs in sectors such as food retail, financial services, youth development, environment, and humanitarian services participated in two (virtual) discussions convened by C&E Advisory on 24 and 25 March. This represented a first opportunity for the companies and charities involved to compare experiences with peers on their respective responses; identify emerging themes; and consider likely future implications for the cross-sector partnering agenda between companies and NGOs.

Key themes emerging from the discussions include:

This is a “moment of truth” for companies and brands who in recent years have positioned themselves as “purpose-driven”. Coronavirus has been described as “an acid test for stakeholder capitalism”. Some leading businesses are clearly failing this test, whilst others are demonstrating extraordinary leadership in their responses to the virus.

For charities, the stresses of resource constraints mean that many charities are facing an “existentialist threat”. In response, many are completely redesigning their business models in real time.

Companies are making rapid decisions about whether to maintain and if so, how to adapt their existing commitments to their NGO partners. Repurposing is a key theme – as companies and charities redeploy resources from previously committed thematic areas to issues and themes where the need is more urgent.

Overall though, this extraordinary episode is an opportunity to re-imagine the future – for which there appears to be strong appetite and optimism, even in these tough moments.

C&E Advisory CEO, Manny Amadi, who moderated the discussions, explained: “There have been strikingly divergent approaches in how businesses are responding in this extraordinary moment to COVID-19. Recent years have seen much talk of a shift towards purposeful business and brands, and stakeholder capitalism. Some wondered whether this was likely to amount to mere ‘woke-washing’ or a more fundamental change in how business does business. If the coronavirus represents an acid test for stakeholder capitalism, as some have said, then we are witnessing failures and successes of that test by some leading businesses. Companies that are truly purposeful are, in maintaining or adapting their partnerships with non-profits, demonstrating their commitment to their values.”

Participants included senior professionals from the following organisations: Aviva, Boots, British Red Cross, Credit Suisse, Experian, Family for Every Child, GE, Hubbub, Kingfisher, The Prince’s Trust, Red Badger, Save the Children, Tesco, UNICEF, Warner Bros, World Food Programme, WWF UK, Youth Sport Trust International.

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