THERE IS A PLAN B
AROUND THE WORLD, COMPANIES ARE ACKNOWLEDGING THAT OUR CURRENT SYSTEM IS EXHAUSTING OUR RESOURCES, EXACERBATING INEQUALITY AND FAILING TO RESPOND TO DEEP SEATED ISSUES LIKE CLIMATE CHANGE. B CORP BELIEVES THEY HAVE A PLAN TO CHANGE THAT.
Here, Executive Director at B Lab UK, Chris Turner, explains why.
Has the pandemic been an opportunity for B Corps to show what they really stand for?
COVID-19 has placed enormous strain on all companies, but in B Corps you can clearly see their underlying principles when they have to make reflex decisions: purpose is embedded within the business. As soon as the crisis hit, Danone – which is the biggest B Corp in the world – launched a €200 million fund to provide grants and loans to small businesses in their supply chain who were suffering. A business that wasn’t balancing purpose with profit would simply have ditched the small suppliers in favour of larger, more secure businesses, to protect the security of their supply chain.
We’re also seeing all sorts of innovation come out of the crisis. The clothing company Finisterre began making fabrics for gowns and PPE for NHS workers, while Lifesaver supported front line workers in hospitals with their powerbanks so that they can charge their phones.
What is the ambition of B Corp?
To create an economy that works for everyone, because previously, the pursuit of profit has come above all else. There are two root causes which are built into our corporate systems and are the cause of so many of our problems: shareholder primacy
and governance frameworks. Both have allowed businesses to exacerbate the climate emergency and societal inequality. We want to build a regenerative economy; one that captures and cultivates positive impacts on the environment and society.
How does it fix the system?
B Corp assesses a business’ governance and their commitment to workers, customers, community and environment. If they meet our standards, we require them to maintain a triple bottom line: People, Planet, Profit. In the UK that means legally changing your articles of association to define the purpose of the business as looking after people and planet alongside shareholders. The reality is that this can affect profit – which is why we call it a balancing act between profit and purpose. Ultimately, decisions come down to the directors who are performing this delicate act, so they need to be empowered and protected by the new articles. They need to model the kind of leadership we should expect from all businesses.
Is it true B Corp began through basketball?
The movement was born in America. Originally, there were three founders who all met at Stanford and ran a business called And1, which was the second biggest basketball brand in America after Nike. The success they built was based on B Corp principles – before B Corp came into existence – putting looking after people and planet on as an equal footing as their shareholders.
However, when they sold the business and stepped away, they saw all of those principles being taken apart. All of the amazing culture and non-bottom line initiatives were gradually dismantled by the new owners as it refocused on the bottom line. The desire was to create a framework that could embed all of that purpose, rather than something that could be washed away with a change of ownership.
How quickly is the movement spreading?
In the UK, we have just hit 300 members since our launch in 2015. This rate of growth is getting faster and one of biggest challenges we face is capacity – all verification is done by a central, global body but this means that they are having to scale and learn new markets rapidly. In the UK alone, we are hoping to add 125 new businesses this year.
WE WANT TO BUILD A REGENERATIVE ECONOMY; ONE THAT CAPTURES AND CULTIVATES POSITIVE IMPACTS ON THE ENVIRONMENT AND SOCIETY.
Why is relevant to employees?
The upcoming generation want to know ‘does this business care about what I care about?’. A B Corp certification is a way of providing a credible answer to that question. It is a shortcut for people to certify and know that this is a business that balances purpose and profit, and the number of recent job applicants who reference B Corp as one of the reasons they are applying at a particular business is growing considerably.
How are you driving innovation?
The steps that B Corps take to integrate purpose in their governance, and to measure and manage their impact, have led to a wide range of innovations. For example, Danone secures loans and financing, as a multinational, where the interest rate is contingent on their B Corp score. This is a fantastic way of pulling together investment for their business, but ensuring that it is working in tandem with their score. Innocent also link their bonuses to their B Corp score, which means it’s not only a tangible metric for the impact of a business, but for employees as well.