What gets measured gets managed; but what gets valued gets protected, championed
and invested in. When it comes to corporate purpose — and its impacts on
intangible assets such as trust, reputation, brand, culture and values — the
challenge for directors and executives is translating what matters into
shareholder language.
It’s not about
greenwashing,
purpose-posturing
or social
storytelling
— it’s about business strategy, risk management and long-term value creation.
And, as Daniel Aronson explained
at the Sustainable Brands® conference in
Rotorua in May, if we want to change
business behaviours, we need to start speaking with clarity and credibility
about how sustainability and purpose deliver financial
value.
There’s a common misconception that sustainability is separate from the core
business — or worse, that it’s a cost — but the data tell a different story.
Aronson shared that a lack of clear return on
investment is routinely cited
by CEOs as the number-one barrier to sustainability investment.
Aronson’s firm, Valutus, has examined over a million
data points globally and found strong empirical links between sustainability and
business outcomes including customer preference, operational efficiency and
employee engagement. The problem isn’t the lack of value — it’s the lack of
visibility.
Sustainability still often sits in the “soft” category of corporate efforts —
well-meaning, reputationally important, but financially optional.
New ways of measuring value
The recognition of brands as valuable business assets on balance sheets wasn’t
always accepted, either. In fact, the modern understanding of intangible value
was propelled by a corporate standoff in the late 1980s. When British food group
Rank Hovis McDougall (RHM) faced a hostile takeover bid in 1988, it made
a bold move by recording its internally generated brands as intangible
assets on its
balance sheet — an unprecedented act at the time.
This was more than creative accounting; it was a deliberate assertion of value.
RHM wasn’t just defending its independence — it was challenging the assumption
that value was only found in physical assets and short-term earnings.
That episode catalysed a rethinking of corporate worth. The hostile bid came
during a period when value-focused investment firms were exploiting the mismatch
between market prices and brand value. Just two years earlier, British
conglomerate Hanson
Trust had acquired
tobacco giant Imperial
Group for
approximately £2.3 billion, offloaded its food assets for £2.1 billion, and
effectively acquired a highly profitable tobacco business that generated £74
million in annual operating profit for a mere £200 million.
The value was there all along; it simply wasn’t reflected in the books — nor was
it defended in language the market understood.
Today’s purpose-led organisations face a similar challenge. If sustainability,
purpose and culture are to be considered strategic assets rather than ethical
add-ons, they must be articulated in a way that resonates with shareholders and
capital markets. That means putting numbers to narratives and showing how
purpose creates economic
moats
(advantages), not just moral momentum.
This is the argument Daniel Aronson made. He stressed the importance of
measuring the financial outcomes of sustainability
actions
— whether in terms of increased customer loyalty, reduced attrition or
operational resilience. Backed by real-world data, Valutus’ frameworks
demonstrate that when sustainability is presented through a credible,
evidence-based lens, it evolves beyond a belief system into a business case.
And this isn’t just about investor confidence — it’s about leadership
credibility. Deloitte, in its research on intentional
communication,
emphasises that the tone and structure of how we talk about purpose have
material impacts on trust. Executives are increasingly expected to be fluent —
not only in the language of profit and loss but in the languages of values and
social
licence.
In the boardroom, this isn’t just soft power — it’s strategic fluency. The
clearer we are about how intangibles deliver value, the more likely we are to
see them protected and prioritised in decision-making.
This approach is already influencing how corporate leaders frame their messages.
Research
by Lund University professor Susanne
Arvidsson tracking CEO
letters from large Swedish companies across a decade showed a clear evolution:
from narrow environmental compliance narratives to broad strategic integration
of sustainability into company value propositions. CEOs are increasingly
positioning sustainability as a value driver, not a cost centre — a shift from
‘we have to’ toward ‘we choose to because it makes us better.’
Boards and executives don’t need to dilute their arguments for purpose; they
need to sharpen them. We’ve done it before — first with brand, then with
innovation, then with culture. Now, we must do it with sustainability, trust and
purpose. If we want these intangibles to be recognised, prioritised and invested
in, we must stop treating them as a moral luxury and start recognising them as
strategic imperatives.
Purpose isn’t soft — it’s solid. It just needs the right language to prove it.
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Judene Edgar is Principal Governance Advisor and Chapter Zero NZ lead at the Institute of Directors in New Zealand.
Published Jun 2, 2025 8am EDT / 5am PDT / 1pm BST / 2pm CEST