Corporate Purpose: A Public-Private Collaboration for the Common Good

Speech by Mr Edwin Tong, Minister for Culture, Community and Youth & Second Minister for Law at the Company Of Good Singapore Summit 2023 on 12 January 2023

1. Good morning. I am glad to join you here at the Company of Good Singapore Summit.
2. We are here today to release the Corporate Purpose Framework and Blueprint.
   
   

   a. Today’s event marks the culmination of two years’ work by the Singapore Together Alliance for Action on Corporate Purpose (AfA-CP).

   b. One year ago, I attended the Leadership Dialogue, where business and society leaders shared their views on the role and responsibility businesses have to the wider community, and the ways in which they can contribute back to society.

   c. I am encouraged to see many familiar faces from the Leadership Dialogue in the room today and I am confident that even as the AfA-CP has officially concluded, its members will continue to champion the corporate purpose movement in their respective sectors, guided by the Framework and Blueprint.

   d. I commend the National Volunteer and Philanthropy Centre (NVPC) and the Singapore Business Federation Foundation (SBFF) for working with some 50 companies from the business community to co-develop the framework and blueprint, and advocating for businesses to adopt corporate purpose as part of their business instinct.

3. Corporate purpose is not a new concept.
   

   a. There is a long tradition of corporate purpose in the business world. From corporate charters dating back to the Middle Ages, to corporate mission statements in more recent times, companies have always sought to marry the pursuit for profit and the pursuit of social purpose.

4. At the heart of corporate purpose is the close nexus between the value that firms create, and the good that society enjoys.
   
   
   
   1. It is about a vibrant private sector, searching for innovative solutions, contributing to a system that produces benefits for all.
   2. It is about corporates that recognise whether their businesses flourish, or flounder depends on the health of the community they operate in.
5. Corporate purpose goes beyond traditional corporate social responsibility (CSR) initiatives, such as volunteering initiatives, corporate donations, recycling efforts and other sustainability initiatives.
6. Corporate purpose is more than programming.Businesses that are fundamentally oriented towards being a force for good structure themselves and their operations to contribute to society. This will impact several aspects:
   

   a. First, their governance framework – how they make decisions and how they measure their impact.

   b. Second, their policies – such as how they recruit, compensate and develop their employees; and

   c. Third, their supply chains – whether the operations of their vendors are ethical and sustainable.
   
   

7. Corporate purpose has to be a company’s north star. It is core to how a business functions on a day-to-day basis, how it plans for the long term, and how it sustains its relationships with its stakeholders.
   
   
8. It is about companies that are not just profit-oriented but ensure their operations generate value for society across environmental, human, social and economic dimensions. I look forward to seeing companies redesign their business practices to go beyond what we traditionally know as corporate giving, instead of just grafting CSR onto existing practice; to operate in ways that benefit our society and exemplify corporate citizenship envisaged under the SG Cares movement.

   
   Corporate Purpose Framework and Blueprint: A Step in the Right Direction

9. The Corporate Purpose Framework and Blueprint is an important piece of work. It signals companies’ commitment to being a force for good and guides them on their journey to deepening their impact on society.
   

   a. The Corporate Purpose Framework and Blueprint will help businesses by harmonising the many metrics and standards for corporates to measure and evaluate their corporate purpose impact and journey.

   b. The data will not only increase accountability of businesses, but also allow businesses to set targets on environment, social and governance-related indicators, and to benchmark themselves against other similar corporates.

   Tackling Societal Challenges

10. This is what it takes to tackle the societal challenges we face.
11. The impact that corporates can make on societal issues cannot be underestimated.
12. Take food insecurity for example.
    

    a. According to Global Hunger Index Report 2022, the Global Hunger Index rose from 17.9 in 2021 to 18.2 in 2022. The impact of geopolitical instabilities¹, the COVID-19 pandemic, supply chain disruptions and volatile food prices have drastically weakened the world’s food systems.

    b. The report also detailed how vulnerable and marginalised communities such as children are disproportionally affected².

    c. Locally, food insecurity affects approximately 10% of Singaporean households, where lower-income groups are at higher risk of being food-insecure³

13. To address food insecurity, global programmes such as the World Food Programme provide cash or food distribution and nutrition support programmes to prevent people from falling into food insecurity⁴. However, it is insufficient to rely solely on the People and Public sectors. Corporates need more fundamental changes to business models and activities to move the needle.
    

    a. A survey⁵ showed that consumers expect food-related businesses like grocery retailers and restaurants to address food insecurities through their business activities.

    b. For example, FoodXervices (pronounced as “food services”), a local food wholesale company identified that food insecurity⁶ and food wastage are gaps in Singapore that needs to be solved. The founders took action by establishing Food Bank Singapore as a centralised coordinating organisation for all food donation in Singapore. In addition, drivers at the logistics company that is one of the three subsidiaries of FoodXervices regularly volunteer their time to deliver food to beneficiaries in Singapore.

     

    Strengthening our Social Compact

14. Corporate purpose is also about strengthening our social compact.
15. When we think about our social compact, people often think about it as the relationship between the people and the government. But I would venture to suggest that we should also look at it as a relationship that involves the people and the businesses.
16. We want a society where every worker is accorded dignity and respect, where every individual is given the opportunity to succeed, and the disadvantaged are uplifted and supported.
17. Businesses that contribute and are accountable to society help create more resilient societies and empathetic societies.
    

    a. For example, Development Bank of Singapore (DBS) established the DBS Foundation in 2014 as a commitment to champion social entrepreneurship in Asia. Through DBS Foundation, more than 800 social enterprises have been nurtured through mentorship programmes and supported through grant funding.

    b. In Asia, one in four people will be over than 60 years old by 2050. DBS Foundation supported Homage, a social enterprise that matches trained caregivers to elderly that require caregiving support.Since 2017, Homage provided over 1 million caregiving hours with a team of about 15,000 care professionals across Singapore, Malaysia and Australia.

18. This is the intention of the Forward Singapore exercise – to discuss how our social compact must evolve; the role each stakeholder – businesses, government, community organisations, individuals, etc – will play; and what each of us is willing to contribute to build our future.
19. We hope to see more businesses similarly step up to the plate and co-create a brighter future and a more empathetic society for all under the Forward Singapore exercise.

    Business Case for Corporate Purpose

20. Corporate purpose does not just create value for society. It creates value for businesses as well.
21. Research shows that as businesses increasingly take environmental, social and governance (ESG) concerns into account, they tend to benefit from better financial performance.
    

    a. In recent years, the global ESG loan market has grown exponentially from less than $40 billion in 2013 to $265 billion in August 2022, mostly due to increased interest in sustainability-linked loans.

    b. Another study showed that businesses that hinge their business practices around environmental and social considerations fared better with respect to return on assets at 34% and return on equity at 16% compared to businesses that were not focusing on environmental and social considerations⁷.

22. As consumers are more conscious of the social impact of companies and the social value businesses create, purpose-driven companies can enjoy better brand perception.
    

    a. For instance, we are witnessing a rise in eco-conscious consumers who are more aware of the impact of climate change to the global economy, society and livelihoods.

    i. From a Global Consumer Insights Pulse Survey conducted by PwC in 2019, 35% of the respondents said that they chose sustainable products to help protect the environment. In addition, a study by a market research firm YouGov highlighted that 81% of people polled expect companies to be environmentally conscious in their business operations such as their advertising and communications.

     

23. Purpose-driven companies can also lead to better talent retention.
    

    a. Given stiff competition for talent, business leaders must understand the importance of creating value for employees by engaging and motivating them to succeed.

    i. A study done by PwC in 2021⁸ stated that workers in Singapore are no longer merely focusing on salary increments and career advancements. From the study, 75% of Singapore respondents would prefer to work for an organisation that makes a positive contribution to society.

24. It is therefore in the long-term interests of businesses to review their corporate purpose, and wield it as a source of competitive advantage. Corporate purpose can be a driver of growth.
    

    Support for Corporate Purpose

25. To grow more purpose-driven companies in Singapore, NVPC will be launching the new Company of Good⁹ strategy today. We can look forward to more details later through NVPC’s CEO, Tony Soh’s sharing.
26. The Government is also committed to support businesses through various measures to encourage the adoption of corporate purpose.
27. For example, there are existing structures and incentives in place to support progressive work practices.

    Initiatives such as the Progressive Wage Model jointly developed by the tripartite partners, incentives for workforce training under SkillsFuture, tripartite guidelines around flexible work arrangements and fair employment practices, and incentives for corporate philanthropy.

     

    Conclusion 

28. To conclude, businesses have a key role to play in building a vibrant economy and maintaining the economic competitiveness of our nation.
29. At the same time, businesses have an obligation to their workers and the wider community.
30. I believe there is a shared space between businesses and society that is mutually beneficial, where businesses are profitable precisely because they contribute meaningfully to society and the environment.
31. I hope the blueprint can spark deeper conversations and collaborations between businesses, social enterprises, community bodies, social and government agencies¹⁰.
    

    a. And in this process, we can deepen the culture that allows businesses to work in support of our common good, and yet also sustain profitability over the long term.

    b. This is an opportunity for Singapore to demonstrate how profitability and the common good are not mutually exclusive outcomes.

32. Thank you.

¹ According to World Economic Forum, Ukraine and Russia account for 29% of global wheat export.

² Approximately, 7.5 million children under the age of 5 suffer from acute malnutrition from East and Southern Africa.

³ The Hunger Report (Food Bank, 2020).

⁴ World Food Programme supported 128.2 million people in over 120 countries in 2021.

⁵ Clutch (2019) surveyed 420 consumers across the United States on how they want businesses to show their commitment to social responsibility.

⁶ The Hunger Report by Lien Centre for Social Innovation (2020) states that approximately 10% of Singaporean households experienced food insecurity.

⁷ Eccles et al., 2012, “The impact of a corporate culture of sustainability on corporate behavior and performance” and UBS Asset Management (2020) “ESG investments performing better than traditional ones. 

⁸ The PwC study is conducted with over 2,000 workers in Singapore.

⁹ NVPC’s Company of Good is a programme to encourage businesses to do good through 1) capability development, 2) hosting networking platforms between businesses and the community, 3) research and 4) recognition scheme.  

¹⁰ For example, SAP established a programme called SAP Social Sabbatical. This programme allows for the secondment of SAP employees to non-profit organisation, charities and social enterprises for 2 – 4 weeks to do pro-bono consultation.