Business for Good – what does that actually mean?
By Stephanie Anderson, Scottish Enterprise
It was fantastic hearing from Alan Mahon of Brewgooder at the Building Scotland’s Future Together conference about the way he has set up his company and proudly positioned it as a “business for good” with a mission to bring clean drinking water to 1 million people. Completely inspiring, especially for such a young company to have such a strong purpose-driven mission from the off. But for other companies who may not have such a clear social mission – can they be a “business for good” too and what does this actually mean?
The Shift Towards Business for Good
We all want to work for, buy from, and invest in businesses we believe in and businesses that do good. But what actually defines a business that does good and how can we tell if a company claiming this really is doing what it says on the tin? B Corp Certification (administered by the non-profit B Lab) has emerged the most powerful way for businesses to build credibility, trust, and value in demonstrating that they truly do. B Corps – such as Brewgooder - are a new kind of business that balance purpose and profit.
Society’s most challenging problems cannot be solved by government and non-profits alone. 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. 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.
About B Corps
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. They are legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment. B Corps can be organisations of all kinds—from multinationals and investors to universities and business networks – and they are helping build an inclusive and sustainable economy that works for everyone. B Lab envisions that in a generation's time, all businesses will measure and manage their impact as readily as they do profitability.
B Corp Certification doesn’t just evaluate a product or service; it assesses the overall positive impact of the company that stands behind it. Increasingly that’s what people care most about. Certified B Corporations must achieve a minimum verified score by undertaking the B Impact Assessment—a rigorous assessment of a company’s impact on its workers, customers, community, and environment—and make their B Impact Report transparent on bcorporation.net. Certified B Corporations also amend their legal governing documents to require their board of directors to balance profit and purpose. So they are really walking the talk and making that info accessible and transparent for all to see. The combination of third-party validation, public transparency, and legal accountability help Certified B Corps build trust and value and can really gain them competitive advantage.
The B Economy
The B Economy is built by everyone who works for, buys from, invests in, learns or teaches about, or supports businesses striving to create a shared and durable prosperity for all. This movement is already happening everywhere and has many leaders throughout the world. Some are small businesses; some are multinationals. Some use business to reduce poverty; some to restore the environment. All are creating meaningful work with dignity and purpose. There are Scottish companies from Edinburgh, Glasgow, Forres, Stonehaven and Wishaw who are already B Corp certified including Brewgooder, Good Loop, Beyond Green, One Stone, Living Alive, Wildhearts Group, Macphie Ltd and The Beauty Kitchen.
The ultimate vision from those who are a part of it is that one day there will be no B Economy—just a global economy that aligns its activities toward achieving our common purpose of a shared and durable prosperity for all.
Scotland CAN B
Recognising the importance of this, the Scottish Government announced the creation of Scotland CAN B, a new organisation within the Scottish Ecosystem to drive this agenda forward. Scotland CAN B is the first nationwide programme of its kind combining a nation’s vision to become a leader in innovation and entrepreneurship (the Scotland CAN DO ambition) with a global movement to drive business as a force for good (B Lab).
Inspired by B Lab's Best for Cities initiative - implemented in partnership with many city mayors around the world – Scotland CAN B was designed to take a holistic view of the country with the purpose to build more resilient businesses and communities and to be part of the wider B Economy. In alignment with Scottish values, Scotland CAN B shares the ambition of the Scottish Business Pledge and multiple other existing programmes to promote a business culture based on the principles of fair work and inclusive growth.
Where Do We Start? Measure What Matters
The business world needs comprehensive, credible, comparable impact standards to support a systems change of this level. We ought to measure what matters most: the ability of a business to not only generate returns, but also to create value for its customers, employees, community, and the environment. This change in thinking and ultimately, change in culture seeks to redefine success in business, so that one day all companies compete not only to be the best in the world, but to be the best for the world.
To make it easy for all businesses to participate in this vision, the B Impact Assessment provides standards, benchmarks and tools to not only helps them become a better corporate citizen,
but also helps them be a better business who can attract and engage employees, earn press and trust and gain competitive advantage.
The B Corp Assessment will walk a company through a series of questions to help them learn what it takes to build a better business - better for their workers, community, and the environment. It takes around 30 mins to get a quick snapshot or around 2-3 hrs for a full impact report. Companies receive questions that are tailored to the company’s size, sector, and geography.
Questions are in four impact areas: Governance, Workers, Community and Environment.
Example questions are:
- What portion of your management is evaluated in writing on their performance with regard to corporate social and environmental targets?
- Does the company have a formal process to share financial information (except salary info) with its full time employees?
- Has the company worked within its industry to develop social and environmental standards for your industry?
- Have you ensured that the social environmental mission of your company will be maintained over time, regardless of company ownership?
- Based on referenced compensation studies, how does your company’s compensation structure (excluding executive management) compare with the market?
- What is the minimum number of holiday days / sick days / personal days offered annually to full time workers?
- What percentage of full time workers were reimbursed for continuing education opportunities in the last fiscal year?
- What percentage of the company is owned by full time workers (excluding founders/executives)?
- Based on the results of your employee satisfaction assessment (conducted within the past 2 fiscal years), what percent of your employees are “Satisfied” or “Engaged”?
- Do you have a worker health and safety committee that helps monitor and advise on occupational health and safety programmes if your company has warehousing or manufacturing facilities?
- When evaluating the social and environmental performance of significant suppliers, which practices apply?
- What percentage of management is from underrepresented populations?
- Are full time employees explicitly allowed any paid or non-paid time-off hours options for community service?
- Which underserved populations does your business impact or target?
- Which is the broadest community with whom your environmental reviews/audits are formally shared?
- If you lease your facilities, have you worked with your landlord to implement any energy/water/waste efficiency programmes in the past two fiscal years?
- What percentage of energy (relative to company revenues) was saved in the last year for your corporate facilities?
- What percentage of energy used is from renewable on-site energy production for corporate facilities?
- Does your company monitor and record its universal waste production?
Taking the Assessment alone will be a valuable, eye-opening experience for any company and will more than likely throw up some questions on areas they had never considered. The best way to improve a company’s impact is to first understand where they are today on the full dimensions of sustainability. It can be difficult for a company – particularly a startup to have full 360 visibility on all aspects of sustainability and future considerations when they are at an early stage but with the B Corp Assessment, they can get a baseline of their impact in 90 mins plus an added awareness of the types of things they could change in order to make a positive impact. A company’s accountability, transparency, compensation/benefits/training, worker ownership, worker environment, community products and services, community practices, suppliers and distributors, diversity, job creation, civic engagement and giving and environmental practices will be given a score and ranked against the average score of other businesses.
Becoming a “business for good”, whatever your business is absolutely possible. Any company can become a B Corp if it is led by a committed leader or team who are driven by more than just the bottom line, and who are willing to join the global movement of people using business as a force for good which could well be one of the most important trends of our lifetime.
If you are interested in helping your company or the companies you work with to become B Corp certified, you can find out more at https://bcorporation.uk and see case studies of companies who are making impact every day. Info about Scotland CAN B can be found at https://canb.scot/ with info about events, opportunities, workshops and ways to get involved. Further reading around research into the bottom line benefits of being a sustainable and impact-driven company can be found in the below articles.
McKinsey article – How Companies Manage Sustainability (March 2010) – https://www.mckinsey.com/business-functions/sustainability/our-insights/how-companies-manage-sustainability-mckinsey-global-survey-results
McKinsey article – The Business of Sustainability (October 2011) - https://www.mckinsey.com/business-functions/sustainability/our-insights/the-business-of-sustainability-mckinsey-global-survey-results
McKinsey article – Sustainability’s Strategic Worth (July 2014) - https://www.mckinsey.com/business-functions/sustainability/our-insights/sustainabilitys-strategic-worth-mckinsey-global-survey-results
McKinsey article – How Impact Investing can reach the Mainstream (November 2016) - https://www.mckinsey.com/business-functions/sustainability/our-insights/how-impact-investing-can-reach-the-mainstream
MIT Sloan report – The Benefits of Sustainability-Driven Innovation (Winter 2013) - https://sloanreview.mit.edu/files/2012/12/f0bfde1b37.pdf