Many company leaders aspire to help the world in meaningful ways—while also maintaining long-term financial health for their investors. Adopting purpose statements to codify their strategies for designing products or services that can deliver specific social and environmental impact is one approach. Another is joining forces with other businesses to support initiatives that promote the well-being of people and the planet. Regardless of how those goals are defined, companies need to establish purpose-driven performance measurements. 


These metrics can validate companies’ efforts and increase transparency with stakeholders. Whether the goal is reducing their carbon footprint or boosting contributions to LGBTQ+ organizations and customers, companies can’t afford to exaggerate (or underestimate) the impact they have on such initiatives. So how can companies ensure their efforts measure up?


After working with clients to define purpose and measurement approaches in ways that are authentic to their ethos and meaningful to their stakeholders, we have identified three complementary strategies that companies can use to meet long- and short-term objectives and successfully integrate them.



Start With Stakeholders


To implement purpose-driven performance measurement and any related conclusions, companies must first define who will use the data—and for what goals. At a high level, there are typically three primary audiences for these reports:

  1. Financial markets (investors): Purpose-driven metrics such as environmental, social, and governance (ESG) reporting are informative to financial markets. In a recent meta-analysis of 1,000 research articles, more than half found a positive relationship between ESG reporting and financial performance. Thus, purpose-driven reporting is an opportunity to demonstrate overall long-term value by communicating in ways that are reliable and transparent, and enable comparison to other companies. Standards being developed today emphasize external reporting of the more financially significant elements—making this a compliance-focused strategy.
  2. Other external stakeholders (customers, potential employees, and partners): Company leaders might focus on reporting to these stakeholders to enhance brand reputation, improve customer loyalty, and attract talent. By adopting a cause-focused strategy, they broadcast their enduring corporate purpose and engage with similar companies to share compelling performance data.
  3. Internal stakeholders (employees and leadership): Companies able to demonstrate commitment to environmentally and socially responsible practices are better able to attract and retain employees. Adopting an action-focused strategy for reporting enables employees to see their contributions to the company’s nonfinancial outcomes, and management can course correct over time.

While purpose-driven data collection and reporting strategies initially might target one audience or strategy, management can also pursue multiple performance measurement projects and/or audiences. Figure 1 shows that these strategies overlap, and implementation approaches can meet multiple objectives.

Figure 1: Developing Purpose-Driven Reports: Audiences and Strategies

 Figure 2 The Emergence of Blended Strategies


Purpose-Driven Reporting Strategies


Best practices and processes for quantifying purpose-driven performance are evolving, so measurement can be difficult and costly. By assessing their purpose-driven objectives and motivations for achieving them, companies can choose a strategy (or strategies) that best aligns with their goals and culture.


Here’s a breakdown of strategies that focus on compliance, cause, and action.


Compliance-focused strategy. ESG reporting is increasingly becoming the expected way to describe contributions to environmental, social, and governance goals. Two organizations are playing major roles in developing reporting standards:

  • The Global Reporting Initiative (GRI) centers on how companies impact the environment and helps them ensure they’re aligned with the United Nations (U.N.) Sustainable Development Goals (SDGs).
  • The International Sustainability Standards Board (ISSB) develops the International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards. These standards incorporated ESG reporting expertise from the Sustainability Accounting Standards Board (SASB) in 2022, as part of a consolidation with the Value Reporting Foundation. Application of the first two IFRS sustainability standards began in January 2024. One provides an overall framework for sustainability disclosures, and the other defines requirements for climate-related disclosures.

Both organizations engage international, industry-focused communities to develop guidance for reporting reliable, nonfinancial performance metrics. Their approaches have been widely adopted: GRI membership includes more than 500 organizations, while the SASB received 2,301 company submissions in 2022. In March 2024, the U.S. Securities & Exchange Commission (SEC) adopted climate-related rules, so additional companies will likely be following these ESG standards, and additional standards may be developed in the United States.


Although these standards are evolving independently, some elements are supported by consistent input from leading organizations. For example, IFRS, GRI, and the SEC all recognize Greenhouse Gas Protocol’s practices for measuring emissions. This includes recognizing Scope 1 (created by the reporting company), Scope 2 (through energy the company uses), and Scope 3 (external to the company, throughout a product’s supply chain).

As standards emerge, the advantages of the compliance-focused strategy are becoming clearer:

  • Both IFRS and GRI focus on reporting requirements on items deemed most material to each industry.
  • Organizations may reduce start-up costs by adopting existing requirements, rather than developing their own reports.
  • Should regulations be adopted in ESG reporting, companies with experience will likely have less difficulty adopting new regulations.

Cause-focused strategy. Companies committed to purpose often join organizations with similar goals and strategies to support common causes. The U.N. Global Compact (UNGC) is one example. It’s designed to support company reporting progress toward the 17 Sustainable Development Goals and adhere to the UNGC’s 10 principles on human rights, labor, environment, and anti-corruption.


Industry-led initiatives focused on environmental and social factors crucial to the industry are also emerging, such as:

  • Architecture 2030 focuses on reducing greenhouse gas emissions from building construction and operations—with a goal to achieve zero emissions from new construction. The standard requires energy efficient buildings to be powered entirely by renewable energy by 2030.
  • Sustainable Agriculture Initiative Platform supports the growth of high-quality and sustainable agriculture products that benefit farmers, their employees, and the environment. As part of the effort, more than 170 member companies are collaborating to develop a regenerative agriculture program with tools to assess risks and improve soil, biodiversity, water, and the climate.

With a cause-focused approach, companies have:

  • Effective and efficient ways to measure impact.
  • Access to shared data so they can compare their efforts against the goals and strategies of other organizations.
  • An opportunity to establish a context for progress within industry efforts.
  • Potential to be recognized as industry thought leaders and build credibility by contributing to the success of coordinated efforts.

Action-focused strategy. Taking this approach is designed to build employee commitment and spur action. It provides motivating insights into individual roles in company success, while also demonstrating that many actions are needed to meet long- and short-term company goals.


Establishing measurable progress targets begins with defining the company’s purpose and then creating a concept map to identify the major activities needed to stimulate and sustain progress toward purpose. Working with clients, we call these maps the company’s “Path to Purpose.” Scorecards from these maps identify one or two metrics with targets for each component, outlining the data required to track progress.


The benefits for action-focused companies are both long-term (overall purpose target) and short-term (key components):

  • Leaders, organizational teams, and individual employees gain insights into what the company is working toward.
  • Leadership can then use these results to guide strategic planning, assess risk, identify near-term course fluctuations, and take corrective actions when needed.
  • Internal discussions can build shared commitment to the purpose and goals, as well as shared processes for tracking and achieving progress.


The Emergence of Blended Strategies

Companies that have a mix of purpose-driven ambitions can implement multiple strategies (see Figure 2).

Figure 2: Example Implementation Approaches

 figure 1 Developing Purpose-Driven Reports: Audiences and Strategies



Validation for compliance and cause. A growing number of certification agencies are outlining goals and performance metrics to evaluate company outcomes against their standards. Companies that choose certifications like B Corp, Cradle to Cradle, the Fashion Transparency Index, and Diversio DEI Certification have access to standards frameworks and industry data.  Comparing that data not only allows for independent verification but also provides opportunities for transparency to stakeholders.

Certifications can fulfill both compliance-focused and cause-focused strategies. For example, B Lab’s B Corp certification requires strong environmental and social performance metrics, governance structures accountable to all stakeholders, and performance measurement against other companies that submit to B Lab standards. Participating companies demonstrate their voluntary commitment to social and environmental goals, and certification provides evidence of compliance.

Where compliance meets action. One perspective on planning and reporting in the ESG environment has been advanced by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). With an eye toward building trust and confidence in sustainability reporting, COSO published guidance in March 2023. The report highlighted how internal controls have value beyond compliance and external financial reporting. Internal controls can also help an organization articulate its purpose, set objectives and strategy, and sustain growth. Building on that idea, Strategic Finance in May 2023 described how strong internal controls help companies make strategic decisions and achieve external reporting requirements. 

Our experience is that companies often strive to support multiple audiences and implementation approaches—making the most of performance measurement efforts and taking different approaches to meeting their larger goals.

Table 1: External Reporting Initiatives

Table 1: External Reporting Initiatives


Consider the four companies highlighted in Table 1. Each has taken a different approach to reporting.

  • Blueland, a cleaning products start-up that promotes the use of eco-friendly reusable products and refills, shares its defined metrics for measuring its purpose-driven progress—such as tracking the number of single-use plastic bottles the company has eliminated. Blueland demonstrates credibility by achieving certifications for its products.
  • Toy giant Mattel adopted GRI for its compliance efforts. Additionally, it sponsored and joined an industry-focused organization to demonstrate commitment and leadership.
  • Philips adopted both SASB and GRI for compliance and submitted targets to the Science Based Target Initiatives (SBTi). The company also joined the UNGC to demonstrate commitment to environmental and social causes and earn credibility for achieving goals.
  • Ecolab implemented the widest range of reporting initiatives. The water safety company adopted GRI and SASB reporting practices, established targets with SBTi, earned certifications, and joined the UNGC. Ecolab also belongs to climate and energy-focused organizations and has received multiple awards for their employment practices.

The Power of Purpose-Driven Reporting

Implementing the right purpose-driven reporting strategy is at the heart of making strong decisions and progress toward goals. Recognizing the differences between strategies (see Table 2) can support plans for reporting initiatives that balance the needs of potential audiences, costs and benefits from joining leading organizations and adopting measures and programs already in place, and the magnitude of customization required for documenting unique purpose-driven programs. And each company’s choices will be driven by different factors. Publicly traded companies might begin their journey with a compliance-focused approach. Newer companies might benefit by first demonstrating their commitment to their cause. And small companies that face reporting constraints might focus their reporting efforts on actions that provide the most important information to stakeholders.


Table 2: Key Characteristics of Approaches to Purpose-Driven Performance Measurement


Table 2: Key Characteristics of Approaches to Purpose-Driven Performance Measurement


As stakeholders place a greater emphasis on a company’s environmental and social impact, organizations need to demonstrate leadership by broadening reporting efforts to include meaningful, nonfinancial metrics. Based on our experiences, clients find these activities inspiring yet often more difficult to execute. Like any strategic objective, tracking progress for purpose-focused outcomes requires an investment—not just to identify metrics and create reports, but to establish a framework that sustains efforts and shared commitments.


Beyond committing to a purposeful reporting approach, company leaders must also be ready to:

  • Build a shared commitment to the company’s long-term purpose. Our clients have audacious goals, yet at times team members can be hesitant to commit, knowing it won’t be fast or easy. Leaders need to remind everyone of their shared responsibilities: how each individual’s role contributes to the company’s purpose-driven success—now and into the future.
  • Report data that falls short of targets. Projects are often launched because the organization isn’t yet achieving its goals—and initial data will reflect that. While sharing data from the start can expose an area of weakness—more importantly, transparency can reveal an opportunity to grow. Joining an industry community can help by setting a context for your goals and commitment to making progress toward them.

Company leaders know that sharing data builds transparency, which is critical for companies to show the true impact of their efforts—and their desire to make a difference. When they measure their purpose-driven performance, companies can do good while also doing good business. The benefits can be many: It helps them attract and retain customers and talent; helps develop employee commitment and more informed stakeholders and partners; drives more efficient operations; and can lead to healthier communities and a more sustainable world.

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