Purpose-driven business strategies have come under scrutiny in recent years. Yet, they remain critical to corporate reputation, commercial success, and employee engagement. In a time of growing consumer scepticism, businesses are judged on their ability to align with the values and needs of their customers and employees. Companies that fail to do so risk reputational damage and diminished trust.
While terms like “corporate purpose” and “purpose-driven communications” may be overused, the fundamental need for businesses to demonstrate a positive impact within their ecosystems has not changed. Consumers still expect brands—and their leaders—to contribute to societal betterment. However, they are increasingly wary of corporate virtue signalling, often questioning whether such efforts are genuine or simply a marketing tactic.
Navigating Consumer Skepticism Around Purpose
A global survey by WE Communications of nearly 15,000 people found that Australians believe only 42% of brands globally are delivering on their commitments. Additionally, scepticism toward corporate purpose is on the rise. The proportion of Australians categorized as “purpose cynics”—those who believe brands should not engage in social issues—jumped from 31% in 2022 to 37% in 2023. Meanwhile, the number of “purpose patrons”—those who strongly support corporate social action—dropped to 33%.
The Shift in Consumer Priorities
Issues like climate change, education, and social justice remain vital to corporate reputation. However, more immediate, personal concerns have risen to the forefront. In Australia, the top five consumer concerns now include employee personal needs, income inequality, economic stability, climate change, and education opportunities.
For businesses and corporate communications teams, this means striking a balance. Companies must maintain clear positions on fundamental issues such as Diversity, Equity, and Inclusion (DEI) while addressing immediate consumer and employee concerns, such as cost-of-living pressures and wage transparency.
Finding the Right Approach
Recent backlash against brands taking social stances without addressing core economic concerns highlights the need for a thoughtful, holistic strategy. Brands that commit to a focused set of values-aligned goals and communicate their actions effectively can enhance their reputation despite economic challenges and consumer cynicism.
A key takeaway? Nearly one in four Australians prefer brands to make practical commitments over ambitious, high-level promises. While climate commitments remain essential, companies that take concrete actions benefiting customers, employees, and investors will build stronger reputations and drive commercial success.
Authenticity is Key
Brand purpose must be deeply embedded in an organization’s DNA. Superficial commitments or inconsistencies between public messaging and business operations can result in accusations of “woke-washing.” To maintain credibility, brands must ensure alignment between their values and actions—across products, policies, and employee treatment.
Corporate purpose is not redundant; it has simply evolved. The challenge today lies in navigating a more nuanced communications landscape where actions must be transparent, localized, and relevant to the business’s stakeholders.
The Path Forward for Purpose-Driven Brands
Businesses that embrace this evolving landscape can enhance their credibility, build long-term trust, and drive commercial value. Standing still or retreating into silence is not an option. Instead, organizations must actively listen to their stakeholders and communicate in ways that reflect both purpose and pragmatism.
At Third Hemisphere, we help businesses craft compelling, credible, and impactful corporate narratives that resonate with today’s discerning audiences. Get in touch to learn how we can support your brand in navigating the complexities of corporate purpose and reputation management.
