LEADERSHIP
The Rise of Meaningful Business More and more businesses are becoming B Corps – effectively altering their corporate DNA to legally mandate a triple bottom line of people, profit and planet. Is “Capitalism Lite” the new way of doing business? BY SAMUEL DIXNEUF PHOTO JURRE ROMPA
T HANNAH MUNGER Head of PR & Communications, B Lab
he annual study Edelman Earned Brand tells how brands can “earn, strengthen and protect their relationships with consumers.” Around 40,000 respondents in Brazil, China, France, Germany, India, Japan, the U.K. and the U.S. take part and in 2018, one opinion stood out. The report found that 64 percent of consumers now self-identify as “Belief-Driven Buyers” – a 13-point increase from 2017 – and concluded: “These consumers said that they use brands to demonstrate their personal values. They will choose, switch, avoid or boycott a brand based on where it stands on the political or social issues they care about.” Another Edelman study focused on employers, and in 2019 it noted a similar shift when it comes to what people demand of the companies they work for. These studies are only two examples that demonstrate how values change in society and about how companies should – or must – take into account other factors than the bottom line to remain relevant. A growing group of companies - the B Corporations - endeavor to do just that.
Founders with a mission
The three founders of the nonprofit organization B Lab had anticipated this trend towards valuesdriven business long ago. “B Lab was founded in 2006 by 3 friends, Bart Houlahan, Jay Coen Gilbert, and Andrew Kassoy in an effort to create the market infrastructure to make it easier for mission-driven businesses to protect and improve their positive impact over
time,” explains Hannah Munger, Head of PR & Communications at B Lab. After certifying the first nineteen B Corps in 2007, B Lab’s founders realized that they needed a legal framework and credible standards in a marketplace where everyone claimed that they were a “good” company. Seeing this as the natural next step, in 2010 B Lab began lobbying US states to pass “benefit corporation” legislation. Benefit corporations expand the obligations of boards, requiring them to consider environmental and social factors, as well as the financial interests of shareholders. This gives directors and officers the legal protection to pursue a mission and consider the impact their business has on society and the environment.
Coming of age
Meanwhile in corporate America, business leaders had begun slowly waking up to the fact that shareholder profit isn’t everything. Last summer The Business Roundtable, an association of CEOs of America’s leading companies, declared that business was “responsible for providing economic benefits to all, not just its investors.” After the official announcement from the Business Roundtable, thirty American B Corporations including Cotopaxi, Klean Kanteen and Patagonia, seized the occasion to challenge the Business Roundtable. A full-page ad was released in the New York Times at the end of August 2019, with the headline Get To Work: “We are businesses that meet the highest standards of social and environmental performance. Business Roundtable, we’d like
