More and more people recognize that we need a paradigm shift in the way we do business. From a model focused on maximising profit shareholder value to a model focused on wellbeing as the end goal, with profit as a necessary by-product. There are many levers to influence this shift and many stakeholders to consider. Regulators have traditionally focused on minimising harm and ensuring that businesses stay within the parameters of the law and public policy. With the shift towards purpose-led business, we want to explore a critical question: What is the role of regulators in enabling businesses to be truly purpose-led?
We convened a group of businesses, civil society, industry experts, and regulators at the annual Anthropy event in Cornwall, where leaders gather to explore the future of Britain. Under the leadership of Dr. Ros C. Rivaz, Chair of Anglian Water and Andy Brown, Group Chief Sustainability Officer of Anglian Water, we brought together an expert panel including Marcus Rink, Chief Inspector of the Drinking Water Inspectorate, Ed Leighton, Director of Strategy & Policy at Ofcom, and Will Hutton, Co-chair of the The Purposeful Company. The setting: a beautiful, hot and sweaty tropical rainforest in one of the biomes of the Eden Project.
In the session, we explored:
- The role of regulators in driving the shift toward purpose-driven business models.
- How regulators can respond to purpose-led businesses and whether this requires a different approach.
- How businesses can demonstrate authentic, long-term commitment to purpose, and what that means for how they are regulated.
This is a big topic, and we only had one hour. We started by asking the panel to provide a quick provocation about the role of regulators in enabling purpose-led business. Marcus Rink stressed the importance of regulators partnering with businesses, rather than just assuming a top-down enforcer role. Will Hutton made the point that utility companies should really be public benefit corporations, with purpose enshrined in their articles of association. Finally, Ed Leigton stressed the importance of exploring tradeoffs between the needs of different stakeholders, such as customers, the environment, and shareholders.
We then opened the conversation up for discussion with the audience. These are some of the key points that our audience fed back to us after the discussion, as well as reflections shared via our online survey.
Reimagining the role of regulation
- Moving beyond 'do no harm': A regulatory focus solely on mitigating harm is insufficient. Regulation must enable businesses to drive positive change.
- Shifting from lowest common denominator to best practice champions: Instead of merely ensuring baseline compliance, regulators should set aspirational goals for businesses to work towards.
- Defining purpose within regulation: Clear regulatory definitions and KPIs for purpose-led businesses are essential.
Building authentic purpose
- Avoiding a tick-box approach: Authentic purpose cannot be reduced to compliance checklists; regulators must consider intrinsic motivation alongside measurable outcomes.
- Governance and accountability: Ensuring organizations embed purpose structurally, rather than treating it as a superficial branding exercise.
- Building trust: Trust is really important. How can regulatory frameworks encourage long-term trust between businesses, consumers, and governing bodies? Can businesses be trusted to self-regulate, or do we need stronger guardrails?
- Listening to stakeholders: Incorporating the views of stakeholders such as employees, the environment, and consumers is critical. Models such as customer champion groups (e.g., Anglian Water’s approach) were highlighted as solutions to build authentic purpose.
Systemic alignment and coherence
- Creating the right conditions for purpose-led businesses: Asking the question of how regulators can use incentives and market structures to reward businesses that prioritize purpose alongside profit.
- Stakeholder responsibilities: Defining where business responsibilities end and regulatory duties begin.
- Defining sector-specific purpose: A cross-sectoral approach to defining purpose is needed, ensuring coherence between government policies and regulatory frameworks.
- Tolerance for failure: If businesses are truly innovating for societal impact, regulators must allow room for responsible risk-taking rather than penalising every misstep.
Building the momentum for purpose-led regulation
We shared a survey with people to understand what is needed to build momentum. This is what people said:
- A shared understanding of what purpose-led regulation actually means.
- Genuine commitment from businesses - regulators can only respond effectively if organizations are authentically purpose-led.
- Cross-sector collaboration to co-create standards, define clear objectives, and ensure alignment across government, regulators, and industry.
- A regulatory approach that enables experimentation and innovation while maintaining accountability.
Quotes
“Regulators are used to evolving their approach to meet changing needs of consumers, and respond to the opportunities and risks of new technology. The conversations we have had show it is important to also respond to different models of business. Putting purpose at the heart of business decision-making could internalize many of the tradeoffs regulators balance every day. This raises fascinating questions for how regulators should shape those processes, and also learn from how those tradeoffs are debated inside purpose led businesses.” Ed Leighton, Director of Strategy & Policy at Ofcom
“For me one of the most interesting concepts is that of sector-wide alignment. When considering the shift to a purpose-driven approach, it seems logical to me that this can not be optimally achieved by parties working in isolation or with antagonistic relationships. All those in the sector must be attempting to contribute to a meta-purpose which they hold in common - Government, regulators, companies, etc. Each player in the sector will then define what the correct organizational purpose is that contributes to the meta-purpose. This still allows for strong policy setting, regulatory controls and a competitive vigour between companies, but all set in the context of trying to achieve a common outcome.” Andy Brown, Group Chief Sustainability Officer of Anglian Water
Survey results from the audience:
We asked, "In one word, describe the role of regulators in enabling purpose-led business". This was the outcome:
Continuing the conversation
We only scratched the surface of this complex topic. Yet, the session was a great starting point for further discussion. It raised some important questions, including:
- How can regulation create enabling conditions for markets to evolve toward purpose-led business models?
- Should regulators become more prescriptive about the benefits of purpose rather than just ensuring businesses do no harm?
- How can we ensure regulatory simplicity, reducing unnecessary barriers while still safeguarding stakeholders?
- What role does cross-sector collaboration play in ensuring a level playing field?
- How can regulatory bodies work with businesses to codify purpose in a way that aligns public and corporate objectives?
- How do we hold boards accountable for both long-term and short-term impacts of their purpose commitments?
- Should all utilities be mandated to have a clearly defined purpose?
The discussion made it clear that regulation cannot remain static—it must evolve to facilitate the transition to a more purpose-driven economy. Regulators have the potential to be partners in transformation, setting clear strategic direction while allowing businesses the flexibility to innovate for social and environmental good. However, trust, accountability, and cross-sector coherence remain pivotal challenges to address.
Our intention is to host a follow-up session with leaders across business, regulators, civil society, and government to explore in more detail what a purpose-led regulatory environment would look like. More on this soon.
Authors
Rutger Veltman, Senior Consultant at Clarasys
Rutger Veltman is an experienced consultant specialising in purpose and impact strategy, organizational design, and sustainability. Since joining Clarasys in 2022, he has worked across the food, information services, construction, manufacturing, impact investing, and not-for-profit sectors. He recently supported launch of the CPHI Sustainability Collective at Informa, a purpose-driven initiative for sustainability in the pharmaceutical industry. Before Clarasys, Rutger worked at an AI startup and in academia.
Ed Leighton, Director of Strategy & Policy at Ofcom
Ed Leighton is Director of Strategy & Policy at Ofcom, the UK Communications regulator. He leads work to anticipate changes in the communications sectors and considers how our models of regulating might need to change in future to ensure they still deliver for people who rely on them in the future. He is responsible for Ofcom’s Media Literacy work, and also leads work to transform organizations and make them more responsive to change.
Andy Brown, Group Chief Sustainability Officer of Anglian Water
As Group Chief Sustainability Officer, Andy Brown works with Anglian Water’s board to oversee the delivery of their purpose, “to bring environmental and social prosperity to the region we serve through our commitment to Love Every Drop”. He has worked for over 10 years embedding sustainability and purpose throughout the business, overseeing the development of their six capitals framework and the Purpose Scorecard. He is the sponsor of their Sustainability Centre of Excellence and is working with the AVH Group companies to develop their sustainability frameworks.
Having worked in sustainability for the past 25 years he has led in the areas of natural environment, climate change adaptation and now sustainability and purpose. He has worked with BSI to develop PAS 808 Purpose Driven Organizations and now chairs BSI National Group on this subject. He is an external advisor and Chair of Tarmac’s Sustainability Panel. In 2021 and 22 he was also appointed as a Visting Fellow of Practice for the Government Outcomes Lab based at the Blavatnik School of Government in the University of Oxford focusing on place-based regeneration and responsible business.
