The Purpose of the Corporation

How will the role of companies change in order to better deliver impact? 

• Initially, the role of the company was to make money. With the arrival of impact and with the measurement of companies impacts, as well as their profits, companies are going to see their role changing.
• The articles of association that set out the objectives are going to have to change to set out a purpose that is consistent with making money and improving lives and the environment at the same time. This is going to require a rejigging of the definition of directors' duties.
• If a company creates negative impacts in the process, it will impact its sales. It will affect its sales because it will lose consumers. It will lose talent and it will see investors disengage from it. 

What are some examples of how businesses are better delivering impact?

• Some have chosen to do it through their employment. I refer to Chobani, which is the now famous yogurt company that has focused on employing immigrants.
• Addidas - which tries to create shoes, the top ready for recycling so that you don't have to go back and create more polluting plastic, as you continue to expand your sales.
• Ikea - they are purchasing recycled materials very often to manufacture their products, they're worrying about the pollution that their fleets of trucks are creating in the world

Why will companies have to provide better transparency through accounting?

Companies have to prepare themselves for this transparency, which may come in the next three to five years. An increasing number of companies are beginning to measure their impact so as to put themselves in a better position, when transparency comes. Companies that optimize both profit and impact together with risk, will deliver better growth and better profitability, because they will be the ones that will have an advantage in recruiting talent, in recruiting customers and in recruiting loyal investors.