Corporate purpose drives our performance

IN CONVERSATION WITH: Geoff Jennett, CEO, Emira Property Fund

One of the challenges faced by companies like Emira that work in the interests of all their stakeholders is how to balance the needs of different groups. This has undoubtedly been highlighted in the pandemic environment. 

Leadership in any environment, but especially the current one, needs a measured, balanced approach because there are always factors that weigh against each other. For example, sustaining some of our tenants’ businesses when they faced forced-closure due to lockdowns, such as by providing rental relief, may have been necessary but is also painful for the shorter-term income returns to our investors. We are also aware that an extreme tilt for or against any one stakeholder for a prolonged period compromises our overall purpose, so achieving a workable and sustainable balance is key.

This view is supported by a new report, which indicates that productive investment in stakeholder value doesn’t come at the longer-term cost of shareholder value, and that companies with a clear corporate purpose tend to outperform on financial and valuation metrics. 

The US research by Chief Executives for Corporate Purpose (CECP) and Fortuna Advisors shows that a sample of S&P 500 companies that score highly on corporate-purpose metrics posted 14.1% higher revenue growth in 2020 than low-scoring companies. The high-purpose focussed group also delivered better profitability, operating margin and return on capital, as well as other metrics. The report notes that the outperformance was already evident before 2020 but accelerated markedly during the Covid-19 environment. The research additionally links meaningful investment in purpose with a measurable improvement in market value.

Emira is a high-purpose company. Our purpose – our long-term reason for being – is “being great in the provision of great real estate”.  

Many companies talk about purpose but find it challenging to put into practice. For us, it starts with understanding the relationship between our purpose and value creation, and then allocating our focus and resources where we are most effective at building purpose (and value) with our stakeholders and the public. 

Our purpose guides our strategy and the daily endeavours of our team. It sets our path to maximising performance and achieving our goals. It is the reason for our existence. 

We fulfil Emira’s purpose by servicing the needs of all our stakeholders. Primarily, we are in the business of being excellent in the provision of great real estate to our tenants. How we do this has four main pillars:

• Firstly, being excellent in all we do for our tenants, providing great real estate in an excellent way;
• secondly, to support our staff and service providers by creating environments in which they can thrive and deliver that service excellence to our tenants;
• thirdly, we believe in leading by example and conducting ourselves responsibly as a business within our communities and the environment;
• and fourthly, for our capital providers, our goal is to ensure secure, reliable returns for our debt providers, and ultimately deliver top quartile long-term income and share price returns for our equity holders. 

All of this needs to be done collectively and in the Emira way, which requires a respectful, open and transparent approach in all we do.

This comes together to ensure a balance of emphasis across all our stakeholders over time. 

By following the path of our corporate purpose we ensure the sustainability of our business and secure greater long-term value creation for all our Emira stakeholders.