Rethinking the idea of a company
You may have heard about B Corps.
Starting in the USA and now spreading globally, 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 non-profits 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 Corps form a community of leaders and drive a global movement of people using business as a force for good.
Many small companies have become B Corps but some large corporates have joined this movement and are getting their subsidiaries certified.
Let's take the case of Danone, a €25bn revenue conglomerate, headquartered in Paris, selling to over 130 countries. Brands you may have heard of are; Activia yogurt, Evian, Volvic, etc.
The Economist reported that Emmanuel Faber, the CEO sees change driven mostly by the new habits of consumers in rich countries. “People are walking out of brands that they’ve been consuming for decades,” he says. "Millennials in particular do not think their food system works and are shopping locally, favouring smaller producers and buying organic, plant-based or GM-free products."
His answer is to pursue a very meaningful goal. The “purpose of this firm is not to create shareholder value”, he says. "Instead it is to get healthy food to as many mouths as possible, benefiting everyone from suppliers to consumers to owners."
Since 2015, Danone has partnered with B Lab to help define a meaningful and manageable path to B Corp certification for multinationals and publicly traded companies, as well as accelerate growth of the B Corp movement into the mainstream.
As part of this approach, Danone is transforming the way in which the food and beverages of its flagship brands are designed and produced, notably by reducing the number of ingredients, and proposing new organic and non-GMO product lines. The company also commits to promoting sustainable agriculture, encouraging the circular economy, conserving water, reducing waste, reducing its carbon footprint, promoting animal welfare and investing in the community.
One of Danone’s key strategies is a new approach for managing its strategic resources (milk, water and plastic). These resources are essential for Danone, not just from an economic but also from an environmental and social standpoint.
A total of nine Danone entities have now earned B Corp Certification, including dairy subsidiaries in France (Les Prés Rient Bio), in Spain and in the UK, Plant-Based brand Alpro, organic baby food brand Happy Family in the U.S., Aguas Danone de Argentina, and AQUA in Indonesia.
As a result, approximately 30% of Danone’s global business is now covered by B Corp certification, marking significant progress towards Danone’s ambition to become one of the first certified multinationals.
Jay Gilbert, founder of B Lab, talks of a pressing need to rethink the philosophy of the company, saying “we need to correct an error in the source code of capitalism: shareholder primacy. B Corps promote better governance and better serve the interests of workers, suppliers and wider society, in addition to investors."
If you are a business owner or director, why not think about becoming a B Corp?
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Geoff Knott, 20/02/2019