Redefining success in business is a pretty ambitious goal, and is one that the B Corp movement has been working towards since 2006.
SustainAbility, for over 25 years, has been working to make business and markets more sustainable, and is proud to be one of the first certified B Corps in the UK and to be part of this global movement.
We spoke with the key figures behind the launch of B Corp in the UK, as well as some companies in the B Corp community, to discuss their ambitions and how they see the movement developing.
Local Launch, Global Movement
The first B Corp was certified in the US in June 2007. Since then, over 1,000 companies in 42 countries have been verified as meeting the B Lab’s (the non-profit that supports certified B Corps) standards of social and environmental performance, accountability, and transparency.
Mark Florman (Chair, B Lab UK, Centre for Social Justice, Spayne Lindsay LLP, Time Partners) and James Perry (Director, B Lab UK, COOK, Panahpur) are championing the launch of the B Corp movement in the UK. Both are strong advocates for business as a force for good, and according to Perry, “Business is really the most powerful tool that mankind has invented. Why wouldn’t you put it to work and create a better world for everybody?” But Perry is keen to emphasise that this is the UK launch of a movement of businesses looking to redefine their role in society; it is not about any one or two individuals, as he sees it: “The more that the voice of B Lab is heard, the more we are failing. The voice needs to be the business leaders and the entrepreneurs who are part of the community. The more voices we are able to speak with the more powerful it is.”
The global expansion started with regional hubs established in Canada and South America. It then expanded into Australia, New Zealand and Europe, with Britain being the obvious next step. As Perry says, “Britain is so iconic in terms of the history of business and the history of commerce, and London is a world-leading financial centre. If this is becoming a global movement, Britain has to be part of it.”
Each market requires a slightly different approach, especially with regards to the legal element of formally recognising that a business is about purpose, as much as it is about profit. In the US, laws have been passed in 26 states, plus Washington DC, creating a new type of corporation – the benefit corporation – that meets the needs of entrepreneurs and investors seeking to use business as a force for good. In the UK, companies will be expected to amend their constitutional documents to include a commitment to a ‘triple bottom line’ approach to business.
B Corp Definitions
- B Impact Assessment: Company self-assessment of overall impact of the business on its stakeholders.
- Certified B Corporation: A company verified by B Lab to have reached a threshold of 80 or over out of 200 points on the B Impact Assessment.
- Legal Requirement: Amending governing documents or adopting benefit corporation (Read more on UK legal test).
- Benefit Corporation: A new class of US corporation that are required to consider the impact of their decisions not only on shareholders but also on workers, community and the environment. Required to make public an annual benefit report.
- B Lab: The non-profit that supports the B Corp businesses. B Lab UK exists to support the community of UK B Corps. Other partner organisations supporting B Corps around the world: MaRS (Canada), Sistema B (South America), B Lab Australia & NZ, B Lab Europe, IES – Social Business School (Portugal & Portuguese Speaking Countries in Africa).
One Size Fits All
Several notable B Corps are subsidiaries of multinational corporations such as Ben & Jerry’s, Method and Plum Organics. Green Mountain Power and Patagonia are some of the more well-known US brands to have signed up. Natura, the Brazilian cosmetics company, gained headlines for being the largest – and first publicly traded – company to become a certified B Corp. But to date, the majority of companies tend to be businesses that have a tight ownership group who can make a decision and implement it quite quickly. Florman and Perry are realistic that B Corp is most well-suited to younger, smaller companies. But neither of them is letting this limit their ambition, with both setting their sights on bigger companies as well. Florman would love to see some of the leading names from each sector join the movement, “If we
had a big retailer, a big energy company, a big bank – those are the three most controversial sectors in Britain – if one of those became a B Corp it would send a strong message.”
That said, when asked about what might stand in the way of the B Corp movement growing in the UK, Florman thinks it might be difficult to get noticed given the number of different corporate styles that exist in, and are unique to, this market – whether it is a cooperative, a partnership or a community interest company. However he is not too concerned, as he knows it is a great choice for business and entrepreneurs.
What Benefit to Business?
B Lab is very good at articulating the many benefits for companies, from attracting talent and differentiating from competitors, to protecting mission and attracting investors. Yoti, the company behind a digital identity app, sees one of the benefits as a validation of their approach to business. As Rachael Trotman, Marketing Executive at Yoti, explained, “We are focused on
growing both profits and social purpose, on the positive outcomes of putting people back in control of their identity and personal data. The B Corps ethos of transparency fits exactly with our aim to make life simpler, safer and fairer, and supports our founding principle to be fair and transparent in how we operate.”
The process of becoming a certified B Corp can enable powerful conversations about a company’s purpose and business model. From Perry’s own experience with COOK, the frozen ready meal company, the assessment brought to light that the company did not have a well-articulated impact business model, despite doing great things such as hiring offenders on day release and hiring from marginalised communities. This stimulated a conversation amongst the
senior leadership about the company’s theory of change, its impact model and whether the company wanted one or should have one. Perry explains, “The whole process has been a very powerful one to engage the senior team and the management of the business more generally on this question of purpose.”
Another benefit is harnessing the power of the community – business coming together to have a collective voice on a fundamentally different way of creating value is very compelling. This is in an era where many influential voices are calling for companies to work together to shift policy, mindsets, behaviours and measurement systems. As Jake Hayman of The Social Investment Consultancy, a B Corp in the UK, sees it, “The B Corp community itself will be an exciting cohort of companies committed to doing things differently. Even more important than the community itself is the impact that the existence of such a community will have on the broader corporate sector. This is not just a community of practice but a statement that business can be done differently and indeed that great businesses don’t sacrifice all for short-term margins.”
For Natura, being a B Corp challenges the company to continually improve and enables it to evolve its business strategy whilst keeping to a sustainable path. It also sees the opportunities for partnership that being a B Corp can bring. As Roberto Lima, CEO Natura, explains: “Being a B Corp challenges us to be better day after day. By joining the B Corps, we believe we can contribute to broaden the network and influence other companies to innovate as we build new sustainable solutions together.”
An Audacious Goal?
Is it such an ambitious goal to try and redefine the role of business? For Florman this is simply the way that business is heading, “If you are doing good as a business and are seen to be doing good and building your reputation and being a ‘decent’ citizen, you will also probably make more money.” The bigger question is, what will happen to companies that are not considering their role in society? As Kresse Wesling of Elvis & Kresse, another founding B Corp in the UK, sees it, “Those companies that won’t or can’t be B Corps – how long will they survive?”
This piece was originally published in the autumn issue of Radar Magazine – Issue 08: Beyond the Company, The Future of Sustainability Goals.