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Wednesday, 22 July 2020 10:01

UK public back capitalism but want business to fix it green and social

The majority of the UK public backs Capitalism as the best economic system for delivering prosperity, but think it is broken and needs fixing. They are keen for businesses to take more responsibility for social and environmental issues – and are ready to support those who do by being more likely to work for and buy from them – according to an in-depth report from ReGenerate.

In the report, The Case for Purpose-driven Business, ReGenerate research shows that the public want businesses to take more responsibility towards society and the environment and it also notes that companies with a "purpose beyond profit" are far more likely to be successful commercially. Tellingly, the report warns that despite customers wanting to buy from brands doing good in the world, only 10% of consumers can tell companies that are genuinely doing good apart from ones with good PR.

regenerate public back capatalism

Ed Boyd, ReGenerate Director, said: "The potential for businesses to positively impact the world is extraordinary. The public sees this, and are ready to reward those companies that have a positive impact on people and the environment.

"The public are more likely to want to buy from and work for companies that are making the world a better place, which means having a purpose beyond profit is helping companies be more sustainable and successful."

The report has been compiled and launched this July on the back of new polling, conducted on behalf of B Lab UK and ReGenerate, in May 2020. The poll found:

• 53% of the UK public back Capitalism but think it isn't working properly and needs fixing (excluding don't knows).
• 22% thought Capitalism was harmful and there were better ways of managing society, and

• 25% thought it was working well and did not need tinkering with (again, excluding don't knows). This view has hardened over the past three years, with large numbers of people making up their minds.

The public wants businesses to take greater responsibility towards society and the environment. The top priority for the public is that companies look after their staff better. Young people are also particularly focused on them helping improve the environment.

The UK public favour brands doing good in the world. However, people are finding it hard to identify which brands are actually making a difference, versus those simply talking a good game: just one in ten could identify companies doing good versus those just talking about it.

The report analyses the existing evidence on how having a "purpose beyond profit" affected the success of companies. It finds strong evidence that purpose-driven companies are more likely to be successful and sustainable, frequently outperforming more profit-driven companies.

For example, one study in 2019 found that organisations with a clear purpose and high management clarity delivered greater stock performance of up to 7.6% above those that did not.

There were two main reasons why purpose can lead to greater success: it helps companies secure, retain and motivate employees; and also build a loyal customer base. For example:

A 2016 survey found 38% of LinkedIn members considered "purpose to be equally weighted with either money or status."

Employees who believe their company has a higher purpose than profits are 27% more likely to stay at their companies, according to a 2018 US study.

38% of millennials initiated or deepened business relationships because they "perceived a company's products or services as having a positive impact on the environment", according to the Deloitte Global Millennial Survey 2020.

Chris Turner, CEO of B Lab UK, who supported the public poll said: "What this shows is people want change. They aren't happy with the way Capitalism is serving people and the planet. The UK's B Corp movement is benefiting from this, with staff more likely to join and customers more likely to buy because they are leading the charge on this agenda."

Download the full report here