27 January 2019

Why B Corp is one of the more important movements in the world today

Capitalism emerged over the past 200 -300 years. It has been a game changer for productivity and raising the quality of life for many, with the selection of consumer products almost unlimited as a result.

Here is a definition I found.

Capitalism is the paramount economic system because it provides limitless opportunity, encourages innovation, and has not been proven inferior to alternative economic systems. … Capitalism is the only economic system which allows every individual an equal chance of success, regardless of inherited social class.

It has a wee flip side though – that of greed, buggering the planet, and a widening gap between rich and poor. These are just a few of the negatives, and they exist across the world. It is hard to fathom, that a city like Los Angeles (a mecca of capitalism), has 60,000 homeless people living on the streets.

Capitalism, in its purest form, could well be the demise of the human race.

The relentless pursuit of financial profit, has lead to companies producing crazy products – like food that is absolutely bad for humans to consume, with disastrous health implications for hundreds of millions of people. Who would actually want to do this?

We have a fashion industry, that has used child labour to manufacture garments, malnourished models to wear them, that entice us to buy clothes, and then dump 400 billion dollars worth of clothes annually, into landfill. Who would actually plan to do this?

And the juxtaposition is just fabulous, created by Sam Jones of Little Yellow Bird (a B Corp) here in NZ. Read it and believe it: https://www.littleyellowbird.co.nz/

Meanwhile, traditional companies have produced cigarettes, mined coal, hunted whales, and told us to spend money on shit we just don’t need, to make a profit. And the greater the profit, the more status and value of the company, regardless of the unintended consequences of the transactions. And to top it off, CEO’s get paid maximum rates, while cleaners are paid as little as possible.

That’s a cynical overview, but reasonably accurate.

So when I heard about Certified B Corps, a new kind of business that balances purpose and profit, from the sage Alex Hannant, I was immediately interested. Business is not going to disappear any time soon, we just need to get a whole lot smarter and balanced in our execution of commerce.

So, what is a B Corp?

Certified B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. B Corps are accelerating a global culture shift to redefine success in business and build a more inclusive and sustainable economy.

Society’s most challenging problems cannot be solved by government and nonprofits alone. The B Corp community works toward reduced inequality, lower levels of poverty, a healthier environment, stronger communities, and the creation of more high quality jobs with dignity and purpose. By harnessing the power of business, B Corps use profits and growth as a means to a greater end: positive impact for their employees, communities, and the environment.

B Corp is a standard that are relevant to for-profit companies of any size. It originated out of the USA, and is represented in over 50 countries.

In 2018 our company, Collective Intelligence, qualified as a B Corp, after 15 months of hard work to attain this standard – it’s not easy. Here are our assessment scores – https://bcorporation.com.au/directory/cq-new-zealand-limited You need to get 80 points to qualify, and as you can see we just snuck in. We were the 16th company in New Zealand to do so, and to say we are proud to have made it into this international community is an understatement.

The fascinating aspect with companies wanting to be a force for good, and redefining the purpose of business, is that it is not at the detriment to profit. In fact, the opposite can be true. Capitalism is being re-defined.

Now let’s get down to practicalities – tangible benefits for those thinking this is just feel good nonsense.

Here are the 4 main benefits I have come across.

  1. B Corps grow faster than their counterparts
  2. Talent is strongly attracted to B Corps – especially young talent
  3. Customers love companies motivated by profit and purpose – e.g.Patagonia.
  4. Access to discounted capital – it’s happening now with Danone as an example

 

One of the best examples of increased growth was explained to me by Andrea De Almeida (The Executive Director at B Lab – who is our Aust/NZ parent body). Andrea talked about Unilever actively acquiring B Corp companies as they out performed other companies they own by 46% than the rest of the businesses they owned and delivered 70% of its turnover growth.

Plus its going to affect banking big time.


Danone’s decision comes on the heels of the recent warning letter to CEOs by the world’s largest investor that the CEOs risked losing BlackRock’s support if they fail to demonstrate that they create value for society. We may be approaching a tipping point in the evolution of capitalism where finaanncial value creation is directly linked to societal value creation and systemic risk mitigation.

Oh, and Danone North America has just become the largest company to become a B Corp:

Danone becomes the world’s largest B Corporation.
A “B Corp” certification requires answering an intensive set of questions on environmental, social, and governance issues. But most importantly, it commits a company to create value for all stakeholders (customers, employees, communities, and so on), not just shareholders.
French consumer products giant Danone has now put 30% of its brands and businesses through the certification process and says that “companies are fundamentally challenged as to whose interests they really serve.” Becoming a B Corp is arguably a direct statement about whose interests it values most, and it’s a fascinating frontal attack on the dominance of shareholder capitalism.


Here’s another example.

One of the shining lights of the B Corp movement is the American based company Patagonia. Recently their CEO Rose Marcario, announced that based on last year’s irresponsible tax cut, Patagonia will owe less in taxes this year—$10 million less, in fact. Instead of putting the money back into their business, they’re responding by putting $10 million back into the planet.”Our home planet needs it more than we do,” she said. That my friends, is what a true B Corp would do. Read More

It intrigues me when billionaires suddenly become these wonderful philanthropists at the end of their careers. Yes, it’s a nice thing to become, but when you look at how some made their fortune on the way through, it was often at the expense of others by often paying minimum wages, or creating a model that decimated local communities for example. B Corps do the good on the journey – not at the end.

There is a NZ company, based in China, that is currently producing $600 million dollars worth of plastic toys, that will last a few months at most, and end up in landfill or waterways. The young founders are commercially sharp for sure, and maybe will one day be fabulous philanthropists. Until then, they are working hard to bugger the planet making shit that kids don’t need, but creating a healthy profit along the way. Once upon a time, we would commend them for their industrious pursuits. Not any more. It’s just not bloody good enough.

Australia have 236 companies B Corp registered, and Aotearoa now have 19, so there is a real need to kick on with this as a nation and help get more companies certified, to make a true impact.

For Collective Intelligence, the benefits started during the accreditation process where we got the chance to view all aspects of our company as we assessed the 5 B Corp pillars of Governance. Workers, Community, Environment and Customers. We tweaked a number of aspects along the way, including our constitution, and contracts, with a more robust company as a result.

Once we were certified, our behaviour has changed. We are more transparent internally, and considered of our environmental impact for example. We have put our bank under more scrutiny (who give us good service) by asking them to look into their contracts with their cleaners, and are they fair?. Which they have – they weren’t, and sorted. We also asked if they are placing funds in ethical investments only? No answer to this yet. We would consider changing banks if we are not able to get a satisfactory answer to this question.

In early December last year Andrea De Almeida, agreed to come over to New Zealand for a tour of the three main cities to raise the awareness of B Corp. 200 people turned out, at a time of year that is clogged enough with other events, so we were stoked with the response. Watch here

We are about to hit a positive tipping point of B Corp certifications in New Zealand, and Collective Intelligence wants to help companies that intend to certify. In response to the need for support, B Lab AuNZ will be running a series of B Corp Boot Camps across New Zealand in March 2019. These 3 hour live working sessions with the Head of Community Building Mindy Leow, are designed to help you get over the finish line. They will be offered at $150 per attendee.

Please register your interest here.

 

There is a wealth of resources to help support your understanding of the B Corp movement and the impact B Corps are having in creating the new economy. Visit bcorporation.com.au for more information.

Alternatively, connect with our New Zealand Ambassador and fellow B Corp Tim Jones from Grow Good who will be more than happy to chat further about any questions you might have with certification and the B Corp movement.

I believe Aotearoa can lead the world in this movement within 5 years, as we can adapt quicker than most, so get into it, if you intend to be part of the business world of the future.

Ian Harvey (Harv)

Founder

Subscribe to Harv's Blog

Enter your email address to be notified of new posts by Harv.

Call Us

06 323 3651

 

Email Us

hello@collectiveintelligence.co.nz

 

Social

Members Area

Forgot your password?

Login not working?

Clear your Browser Cache:
Windows: Press Ctrl+F5
macOS/OSX: Press Command + R

Learn More

Generic selectors
Exact matches only
Search in title
Search in content
Search in posts
Search in pages