Philip Newborough, Bridges Fund Management

Purpose-driven businesses do not just make sense from a moral imperative; in these challenging times they also represent a big economic opportunity, says Philip Newborough, co-Founder and co-CEO of Bridges Fund Management, the impact investment firm.

Philip says: “If you think about what needs to be achieved over the next decade or so, this is the investment opportunity of a lifetime. We have got a business solution that is really responding to the long term macro economic trends facing our society.”

Bridges was founded in 2002 to invest in purpose-driven impact businesses, in the belief that business and investment could play a vital role in tackling some of the world’s most pressing social and environmental challenges. It focuses on businesses which address one of four themes: healthier lives, future skills, sustainable planet and stronger
communities.

Philip says: “Impact and purpose-driven businesses are generally better placed to come through this crisis because they are delivering essential services or because they are addressing one of the long term macro trends such as reducing carbon emissions, aging populations, the rise in long term health conditions and inequality.”

He says the vast majority of the 65 businesses backed by its investment fund are continuing to perform well throughout the pandemic, with only four having been badly affected.

One of Bridges investments, Alina, for example, provides high quality homecare, while another, World of Books, is a ‘Circular economy’ technology business that has pioneered the reuse and recycling of unwanted books. Both address societal needs and both are benefitting from the changes in consumers behaviour during the pandemic.

Philip says the pandemic has really focused peoples attention on the things that really matter, such as the importance of building up communities and looking after others. “There have been inspiring examples of how some companies have gone the extra mile for their staff, their customers, their supply chain, and their local communities. If businesses nurture those kind of relationships in the more difficult times, they are more likely to survive the crisis and bounce back afterwards.”

The crisis is also turning a spotlight on corporate behaviour, he says. “I think there is going to be scrutiny like never before, particularly given the amount of financial support that has been given to businesses. It is not difficult to imagine that those who have benefitted from that kind of support are going to be increasingly held accountable for how they are behaving. Businesses that behave selfishly and act purely in their own interests without regard to governance and their broader stakeholders are likely suffer a negative consequence.”

The impetus for positive change is coming from all sides, he says: “In all aspects of life we are seeing the wave starting to build, from the way that many corporates are starting to position themselves through to the way that customers are demanding that business act, and you are seeing capital markets and investors respond to it as well.”

As a result even the largest businesses are now increasingly being driven by a purpose-led agenda, he says. “Large companies like Unilever and Danone are becoming B Corporations and making public declarations about the purpose of their business and how they are going to serve society and their stakeholders, firstly because it is the right thing to do but also because their customers demand it.”

The drive for change is also coming from employees, he says, with talented people increasingly wanting to work for purpose-driven businesses. He says: “People are increasingly moving towards brands that are in line with their personal values, and that is coming from employees as well as consumers. Businesses that are addressing these things and behaving the right way towards employees and other stakeholders will attract the best talent.”

Bridges Fund Management is sponsoring the Bridges Positive Impact Award at this years Growing Business Awards. Philip says: “This award is a great way to showcase businesses that are responding to these big social and environmental challenges and we are delighted to be sponsoring it. One of the big issues we have been grappling with for nearly 20 years is how business can serve society in a beneficial way and the companies on this shortlist are great examples of what can be achieved. We hope that this positive impact award will inspire other businesses to take this path and become purpose-driven too.”