Does having a purpose pay off?

… and why that’s the wrong question to ask

Originally featured on MarketingFacts in Dutch.

For years, brand purpose was the darling of the marketing world. But more and more marketers are beginning to question whether purpose truly delivers on its promise, or if it’s mostly used as a feel-good label as part of a company’s marketing strategy.

Back to the school of trends

At first glance, the numbers suggest that it pays for brands to have a purpose. McKinsey and NielsenIQ’s 2023 study (Consumers care about sustainability—and back it up with their wallet) shows that products with ESG-related claims grew 28% over five years, compared to 20% for those without. That’s a significant difference. Earlier research by Jim Stengel reaches similar conclusions: purposeful brands perform better.

Still, there is scepticism about these studies. They show correlation, not causation. Additionally, they don’t sufficiently control for other variables like marketing spend, distribution power, or product quality. As McKinsey themselves acknowledge, it is impossible to say for sure that purpose is the actual driver of of growth. However, despite their cautious tone, the researchers still claim: “the result, for CPG companies, is a fact-based case for bringing environmentally and socially responsible products to market as part of overall ESG strategies and commitments. Creating such products turns out to be not just a moral imperative, but also a smart business move.” Whilst this final claim is an overstatement, it does reflect how purpose is often viewed: as a business tool.

As for Stengel’s study, it is also flawed, as Richard Shotton convincingly shows in his article: “Why Brand Purpose Is Wishful Thinking”.

In short, the data is suggestive, not conclusive. It may simply be that companies which are well-managed—with stable leadership and a clear strategic direction—tend to perform better. It’s not brand purpose itself, or making purpose claims, that drives market success, but these companies often also have a clear vision of the value they want to bring to society. This could help explain why McKinsey finds that both large and small brands benefit from ESG claims, while medium-sized brands do not. Perhaps these medium-sized brands have been less well managed, with a lack of a clear strategy, which is why they’re medium-sized rather than large. As for smaller brands, they are often values-driven. Growth and market share are not main priorities, which may explain why they’re smaller.

Should brands then abandon their purpose, if it doesn’t pay off? Well, no, but ‘purpose’ is often misused. It is forcibly fit to existing business models, with mission statements that are reverse-engineered to match existing product portfolios. The result? Performative purpose—something that consumers can see right through. As we wrote in Purpose Marketing, purpose that is added in hindsight rarely convinces anyone and risks eroding trust rather than building it.

If purpose is used as a thin layer of varnish that is retroactively applied to a brand’s marketing strategy, then it’s far easier to abandon than when it forms the foundation of the business. It quickly becomes a burden, especially in times of inflation where the additional costs of developing and certifying ESG-compliant products can accumulate quickly. For example, Unilever was once a poster child of sustainability under CEO Paul Polman, but has recently shifted course with the new CEO stating that the company had been “too vocal” about its values. This has resulted in Unilever becoming less focused on social purpose. As we argued in Sustainability That Sells, this is not just a reputational risk. It’s a missed opportunity to align long-term societal impact with long-term growth. It reveals how shallow purpose can become when it’s not deeply embedded across the business.

What’s often missing in the discussion about the financial value of ‘doing good’ is something more fundamental. What we need is a shift in mindset. Purpose isn’t a marketing tactic. It should not be a strategy to drive profit. As Mark Ritson puts it: “The purpose of purpose is purpose.” Real purpose is about the role a company wants to play in society. Profit matters, of course, but as a means to an end, not the end itself. Financial sustainability enables long-term impact. It’s the fuel for the journey, not the destination.

Truly purpose-driven organizations start from genuine conviction, not from a campaign thrown together during a corporate awayday. They ask themselves: what do we contribute to the world? And they make decisions—on sourcing, pricing, innovation, and communication—through that lens. Purpose is a compass, not a slogan on your packaging.

Of course, when done well, purpose can lead to growth and loyalty. But these are positive by-products, not objectives. If purpose is genuine, growth may follow (although sometimes it could simply cost money). And when it’s hollow or fake, backlash is almost always guaranteed.

Written by Durk Bosma.

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