How the Purpose Economy is redefining business success

Written by

Estee Lutte Engao

on

April 30, 2024

5 minutes to read

Picture a bustling enterprise; its operations are smooth, its customer base loyal, and its financial health robust. This business isn’t thriving solely because of traditional business acumen. Instead, it has tapped into a powerful, emergent economic force: purpose.

In today’s fast-evolving marketplace, consumers seek companies that marry profit with purpose, proving that doing good is good for business, contributing directly to the company’s bottom line. Welcome to the Purpose Economy – a model that reshapes how businesses operate, prioritize, and engage with their communities and environment. The concept isn’t merely a trend; it’s the future of business.

The rise of conscious consumers

Modern consumers are no longer passive. Armed with information and driven by a strong set of ethics, they seek out brands that do not just promise value but whose operations reflect their values. They want to know the story behind the products they purchase: Who made them? Were they compensated fairly? What is the environmental cost?

A groundbreaking global study, The 2020 Zeno Strength of Purpose, provides robust evidence supporting the economic advantage of purpose-driven business strategies¹. This extensive research surveyed 8,000 consumers across the United States, Canada, United Kingdom, France, China, India, Singapore, and Malaysia, evaluating their responses to over 75 brands. The findings reveal a clear preference for companies that declare a purpose and integrate it deeply into their business practices.

Trust and loyalty: The rewards of purpose

According to the study, companies with a strong purpose see profound benefits in consumer behavior:

Purchase Likelihood: Consumers are four times more likely to purchase from a company that exhibits a strong purpose.

Resilience: These companies are six times more likely to be defended by consumers in the face of public criticism or missteps.

Advocacy: They are 4.5 times more likely to be championed by consumers, who will recommend them to friends and family.

Trust: Consumers are 4.1 times more likely to trust these brands.

These statistics underscore a significant shift in consumer behavior: trust and long-term loyalty are increasingly granted to brands that demonstrate genuine commitment to their values.

The pandemic’s impact on consumer expectations

The COVID-19 pandemic has further accelerated the shift towards conscious consumerism. In collaboration with market research firm YouGov, a study by the creative research platform Visual GPS revealed telling statistics about consumer expectations during the pandemic².

The survey found that 81% of respondents expect companies to be environmentally conscious in advertising and communications. Furthermore, 69% of those surveyed stated they were actively doing everything possible to minimize their carbon footprint, a notable increase from 63% just a year earlier. This data indicates a heightened awareness and commitment to environmental issues driven by the global crisis.

Consumer expectations vs. corporate practice

Despite the clear preferences for purpose-driven companies, a considerable gap exists between consumer expectations and corporate performance. The Zeno research found that while 94% of global consumers emphasize the importance of engaging with companies with a strong purpose, only 37% believe that today’s companies exhibit clear and robust purposes.

Based on a global survey conducted on 474 executives by Harvard Business Review, 90% agree that their company understands the importance of purpose. However, only 46% say they use purpose in strategic and operational decision-making for their businesses³. This discrepancy indicates that many businesses miss out on substantial brand equity and consumer loyalty by not articulating or demonstrating their purpose

Sumiaji is a seasonal farmer and a Plastic Bank collection member living in Mojokerto, East Java.

Plastic Bank: Turning purpose into a tool for success

As the story unfolds, it becomes clear that integrating purpose into business operations is feasible and advantageous. And this can be done through strategic partnerships and innovative solutions like those offered by Plastic Bank. This social fintech is addressing poverty and pollution simultaneously with a transformative concept: turning plastic into a currency.

Plastic Bank empowers businesses to fund plastic collection initiatives, aiding environmental cleanup and supporting collection communities across Southeast Asia, Latin America, and Africa – capturing customers’ hearts in the process. Collection members gather and exchange plastic for increased income, zero-interest loans, educational opportunities, and other social benefits.

Plastic Bank offers three impactful ways for businesses to get involved:

Impact subscription – Designed for small businesses, this program allows them to subscribe monthly to prevent 10,000 to 45,000 plastic bottles from polluting the environment each month.

Plastic credits – Businesses can purchase plastic credits to offset their plastic footprint with full traceability while empowering communities that collect discarded plastic.

Recycled plastic feedstock – Companies can incorporate Social Plastic®, Plastic Bank’s traceable recycled plastic feedstock, into their products or packaging. This not only reduces their environmental impact but also promotes a circular economy.

Businesses today face a clear choice: continue on the traditional path of short-term gains or pivot towards long-term sustainability and ethical practices that consumers increasingly demand. Choosing the latter allows companies to align themselves with the values of today’s conscious consumers and ensure their place in a future where doing good is the standard for doing well.

We invite businesses to become part of a larger story, where every transaction brings us closer to a just, regenerative, and prosperous world for all. Contact Plastic Bank to explore how your business can participate in ending poverty and stopping plastic pollution.