I recently participated on a panel discussion as part of a conference on creativity for MBA students. The subject veered into the territory of a corporation’s social responsibility, and a banker on the panel—a really sharp guy—said that as far as he was concerned, if you created a job, you had fulfilled a social promise.
He also admonished the audience against letting emotions like “social good” sway practical business operations.
The Other Side of the Profit Coin
I’ve got a different take on the matter that’s in sharp relief from that of my banker friend. While my view might not yet be in the majority, a growing movement of companies shares it.
I believe it’s not about simply creating a job that shows up as a statistic in the employment data. I firmly hold that it’s more about what type of job you create—and the type of company you build—that is the important part of today’s business/social equation.
Sure there’s some emotion to this. But then, hey—if the world ran purely on logic, you wouldn’t be overpaying for that trusted brand of laundry detergent in the colorful and comforting packaging, right?
But it’s not all emotion—and it’s not just me. There is a pragmatic movement of profit-minded companies—called “B Corps”—that believes it can thrive by using the power of business to address social issues.
In the process, they are building profitable companies that are able to compete for the best levels of talent by adding a sense of meaning to the job description.
A Framework for Social Impact
Social responsibility has been one of our four core brand values since we started our brand-marketing firm nearly 23 years ago. (The other brand values are to be creative, collaborative, and progressive.)
In support of this, we’ve tried to be enterprising in a number of ways, from open-book financials to environmental practices. A hallmark of our commitment to social responsibility is the grant program we put in place for nonprofits. Over our history, we have been fortunate enough to award more than $1.7 million in cash and services to causes in the community. Our giving has always been based on corporate commitment—and an operational formula that is a percentage of annual profits.
To B or Not to B?
Three years ago, I heard about this new class of company called a B Corporation. The community of B Corps has one unifying goal: to redefine success in business. At an individual level, the B Corps I’ve met definitely regard the profit imperative as central to their mission. It’s just that B Corps also use the power and profitability of sustainable business to help solve environmental and social issues as well.
Our company was interested to see if this would provide a framework to measure our work in social responsibility. I learned that in order to become a B Corporation, companies undergo an in-depth assessment of their business practices.
The assessment is conducted by B Labs, a nonprofit that gave birth to B Corp certification. It certifies B Corporations in the same way Fair Trade USA certifies Fair Trade coffee or U.S. Green Building Council certifies LEED buildings.
Transparency, Accountability, and Performance
The assessment centers on transparency, accountability, and performance. It takes a measure of your governance, as well as policies for workers, the community, and the environment. This certification provides a framework, just what I was looking for, to help companies benchmark and measure their progress in these areas. It also lends authenticity, helping people differentiate between a good company and just good marketing.
In addition to certification, B Lab also supports social entrepreneurs through work to change the legal infrastructure and attracting capital to scale. It has led a movement to introduce a new type of legal entity, the benefit corporation, which has passed into law in 19 states and counting. B Lab also created B Analytics, a platform that benchmarks, measures, and reports on impact, which is used by a growing industry of impact investors, fund managers, and impact entrepreneurs.
It IS about the Type of Job You Create
On the operating level, there are other reasons to become a B Corp. As I alluded to earlier, it helps attract and retain talent. You have access to technology and expertise from a large family of B Corporations. It also saves money and increases profitability, as many of the B Corp practices are conservative in nature and actually reduce the use of resources, such as energy and paper, while enhancing the productivity (employee retention), among others.
Oliver Russell successfully completed the assessment in 2012 and was recertified again earlier this year. (To recertify, companies must complete a new assessment every two years.) Our sister company—Social Good Network—was certified last year, and was just included on B Corp’s “Best for the World” list recognizing the companies that make the most impact for a better world.
A New Class of Capitalism
This movement is growing at a rapid pace. When Oliver Russell was certified in January 2012, there were fewer than 500 B Corps. Today, just two years later, there are more than 1,000 B Corps from more than 60 industries in 32 countries. They range from well known, larger consumer companies like Ben & Jerry’s, Patagonia, and Etsy to smaller businesses such as ours.
This movement is flourishing because a new type of social entrepreneur is leading the charge, but also in part because consumers are rewarding it. People are giving their loyalty to brands that not only operate in a socially responsible way, but also proactively create positive social impact in the world. These same consumers are differentiating beyond the corporate level, increasingly purchasing products that trigger a donation to someone in need, like eyewear company Warby Parker, a fellow B Corp.
“The B Corp Community is evidence of a larger systemic shift and the evolution of capitalism. These companies are leading the movement to redefine success in business, and one day we hope people are asking, ‘Where aren’t there B Corps?’ Change is less about a specific sector, and more about a new mindset,” says Andrew Kassoy, B Lab co-founder.
A Sustainable Positioning for the Future
Becoming a B Corp has created a new asset for our business. We like to measure things, so the assessment provides an invaluable dashboard for our efforts. It’s a motivator for the people who work here, and catnip for recruiting new talent.
It’s brought an even bigger change to our business. Since we’ve been inside the belly of the B Corp beast, we’ve seen a new opportunity for how we can “B the Change” around the trend toward purposeful organizations and consumers.
As you see by engaging with our website, we have repositioned our business to build upon two decades’ plus in the category and are now specializing in building purpose-driven brands and causes. Sure, there’s emotion behind this move, but it’s also married to calculated strategy. We believe this differentiation creates a competitive advantage for Oliver Russell that will be sustainable into the future.
by Russ Stoddard & Oliver Russell