A4e cannot call itself a 'social purpose company' as its business activities generate a profit, the Advertising Standards Authority has ruled this week.

In response, A4e is considering appealing the Advertising Standard Authority's decision.  

A4e, which holds a number of government welfare-to-work contracts, had called itself a 'social purpose company' on its website. However a complainant challenged whether the claim was likely to mislead customers as to the nature of its business, and asked the Advertising Standards Authority (ASA) to investigate.

A4e believed the claim did not mislead because the key focus of their business activities was to achieve positive social outcomes. It said the majority of its revenue derived from contracts is aimed at achieving long-term sustainable employment outcomes.

However, the ASA decided that that the claim was misleading, because A4e's business activities were intended to generate a profit. It was also concerned that individuals would believe 'social purpose company' meant that A4e was a not-for-profit organisation.

The A4e website now states that it is a private company with a social purpose. A statement on its website advises that it is considering appealing the ASA decision on its use of the term 'social purpose business'.