Lord Browne, former CEO of BP, on the importance of social purpose over CSR

How does social purpose differ from CSR?

Social purpose has to be relevant to the company’s core business. All companies have to think about how to engage radically with society.

This means engaging with stakeholders on their agenda and adapting your business strategy accordingly.

The strategy should not just think about the supply chain or sourcing; it also needs to relate to all the people you interact with, both inside the company and outside of it.

How will this benefit businesses?

You can see a difference with companies that engage with their stakeholders in this way and include them in their decisions. Companies that do this make better returns in the long run. Studies have shown that the most inclusive companies achieve abnormal returns of more than 20% over a 10-year period compared to competitors.

An example would be Salesforce.com, which has consistently thought about including staff regardless of their background. They operate in exactly the same way for all stakeholders affected by their business.

How does connecting with society give companies a tangible competitive advantage?

Research has shown that the value at stake for companies in their relationship with society is roughly 30% of their value. Therefore a good relationship with society is not just nice to have – it is a key determinant of competitiveness. Connecting effectively can set companies apart in many ways, from reduced regulatory risk to enhanced reputation.

Does social purpose need to be driven from the top down?

It is essential that social purpose comes from the top, from the CEO, board and C-suite. They need to think about social purpose and to make this commitment to engagement clear throughout the organisation.