Ahead of our coming 'Exploring the Value of Purpose' event, James Rutter — Brand Director at COOK — charts the B Corp movement's story, and its rising popularity within the 'purpose economy'.
When your certified members include such darlings of the digital economy as crowdfunding platform Kickstarter and online eyewear specialist Warby Parker, you’re clearly succeeding in attracting the business ‘in’ crowd.
Throw in admiring name-checks from the likes of Virgin’s Sir Richard Branson and Paul Polman, CEO of Unilever; add a global reach that covers 50 countries and six continents; and it’s clear your club also has global clout. And when your stated aim is to change the very structure of capitalism so that businesses compete not to be the best in the world, but the best for the world, then your club has clear ambition.
Meet the B Corporation movement: The most significant global business body to emerge in the 21st century. Its corporate members have all passed a tough test to prove the way they do business is much better than average: better for their employees, better for the planet, better for the communities where they operate, and maybe even better for their bottom lines.
B Corps are right at the heart of the rapidly growing ‘purpose economy’, promoting the idea that capitalism, properly re-directed, can be turned from the root cause of many of the world’s ills into the instrument of our collective salvation. To do so, businesses and brands need a genuine purpose beyond profit that benefits the world at large.
"B Corps are right at the heart of the rapidly growing ‘purpose economy’."
The rising tide of populism, and the fracturing of many of the certainties that seemed to underpin stability and growth in the western world, brings an added sense of urgency. Perhaps now, more than ever, creative businesses should be stepping up to paint a more positive and compelling picture of the future.
The near 2,000 companies certified as B Corps sign up to the idea of business as a force for good in society. Their three-word slogan is borrowed from Mahatma Gandhi: Be the change (“…you wish to see in the world”, was how Gandhi finished it). Oh yes, there’s the whiff of bright-eyed, hippy idealism. But forget your Birkenstocks. The business element of the equation is serious indeed. In among the eco-friendly cosmetics companies (Dr Bronner’s soap; Jessica Alba’s The Good Company); outdoor clothing brands (Patagonia); and ethical food and drink businesses (Ben & Jerry’s ice cream, One water, Ella’s Kitchen baby food), the ranks of certified B Corps include venture capital partnerships, banks, and law firms.
Such ‘serious’ businesses are attracted by the fact that behind the B Corp brand lies a robust auditing framework.
The certification process to become a B Corp is eye-wateringly thorough. The B Impact Assessment – the online form companies have to fill in – is a forensic examination of how a business’s activities impact on society in the broadest sense. There are hundreds of questions in sections covering corporate governance, community, employees and the environment, many of which require documented evidence. Random on-site audits by the team at B Lab, the non-profit that oversees the B Corp movement globally, add an extra level of oversight.
"Perhaps now, more than ever, creative businesses should be stepping up to paint a more positive and compelling picture of the future."
The final hurdle to B Corp certification that weeds out all but the truly committed, is that a company must change its legal articles of association so that the obligation of company directors goes beyond simply maximising profits for shareholders. In addition, they must also ensure the business operates in a way that furthers its non-financial goals.
Nick Davies, founder of Neighbourly.com, a Bristol-based online platform that matches brands with local community projects, says the robust process was part of the attraction of becoming certified. “Because it is an external audit, it immediately has credibility,” he says. “It also has teeth, it’s not easy, and we liked the fact it was going to be hard work.” Davies set up Neighbourly three years ago after a 20-year career in advertising: “I was seeing it getting harder and harder to do the same old thing as media fragmented and consumers increasingly turned their back on messages. Instead, they were responding to brands that were actually doing something, demonstrating effective action rather than just selling stuff.”
The role of Neighbourly is to make it easier for brands such as M&S and Starbucks to ‘do’ by connecting them with local community projects. He describes Neighbourly, and the companies it targets as clients, as ‘movement brands’. “Any organisation that recognises a fight and is willing to take it on is potentially a movement brand. And becoming a certified B Corp meant we would be part of a movement too. B Corp is the movement for movement brands.”
Origins of B Corp
The roots of the B Corp movement lie in an American basketball clothing brand called AND1 that flourished in the late 1990s on the back of distributing ‘mix tapes’ of trash-talking, street ball players doing outrageous shots and tricks.
AND1 was founded by Jay Cohen Gilbert and one of his Stanford University buddies. Gilbert brought in another classmate, Bart Houlihan, to run the business and together they turned AND1 into the second biggest basketball apparel brand in the US. The company was sold in 2005 for an undisclosed sum, after which Gilbert, Houlihan and another Stanford friend, corporate lawyer Andrew Kassoy, set up the non-profit B Lab with Gilbert as its creative driving force. As if on cue, the collapse of Lehman Brothers and the ensuing global financial crisis seemed to prove the deep fault lines running through the western economic system built solely on delivering shareholder value.
The B Corp movement has certainly found fertile ground both in the US and globally. Yet there is also plenty of cynicism. After all, there are existing corporate structures that enable a business to operate in a way that is one step or more removed from shareholder capitalism, be it as a co-operative or a social enterprise. While the structures were already there, the mass appeal has definitely been lacking. The success of B Corp to date has been as much about its strong brand as the underlying idea that capitalism can be improved upon. In the US, the B Corp logo is gradually gaining consumer awareness with the goal for it to be used and recognised much as the Fairtrade logo is for coffee.
"The B Corp movement has certainly found fertile ground both in the US and globally. Yet there is also plenty of cynicism."
The receptiveness of millennial and generation Z consumers to purposeful brands they regard as ‘doing the right thing’ has also underlined the case for ‘good’ business. But a recent research report from Claremont Communications raised what it called ‘the spectre of purpose-wash’ – the use of purpose as a marketing tactic rather than a genuine business strategy.
Arguably, this risk grows movement tries to extend its reach to bigger, global businesses. It is exploring how its methodology might be applied to multinationals and has set up an advisory panel involving Unilever and Danone, both of which have publicly stated their admiration.
B Lab co-founder Gilbert recognises the risk but also identifies B Corps as the remedy. “When everyone uses the same words, but they have no standard definition, they can be co-opted by talented and well-resourced marketers, leaving us more confused and skeptical. B Corps cut through this clutter because they have met rigorous standards of third-party verified social and environmental performance, transparency and legal accountability. B Corps are an antidote to 'purpose-wash'.”
For creative agencies seeking to distinguish themselves as more purposeful than their peers, B Corp certification is attractive. The 100 plus certified B Corps in the UK include a smattering of creative businesses such as Bournemouth-based digital agency Folk and Birmingham’s Be Inspired Films.
One of the very first certified B Corps in the UK was Futerra, a 60-strong creative agency that articulates its purpose as: Making sustainability so desirable it becomes normal.
Co-founder, Solitaire Townsend, says: “It’s possible to create a significant amount of value by putting your purpose first. We fundamentally believe our business performance is an outcome of our purpose.”
She sees the rise of B Corporations as an opportunity to move beyond “the Victorian way that capitalism works where the only legal form a company can take is one that means being obliged to maximise returns for shareholders.”
In this regard, she suggests the creative industries are surprisingly lagging behind the times, focused on traditional, profit-first business models rather than forging something new. However, the challenge of bringing purpose to life in the context of a creative agency is that the work tends to be a means to someone else’s business ends. So whereas other companies can look at their direct social impact in terms of widgets, emissions, or employing ex-convicts, agencies are by definition one step removed. For Townsend, the answer is straightforward: “Professional services businesses have an impact through the clients they service.” Last year, Futerra published a client transparency report showing which industry sectors its revenue came from and included its top ten briefs by value, albeit with the client name removed – as close as it could get to complete transparency without naming names. It didn’t have zero clients from controversial industry sectors, says Townsend: “We look for work that’s transformational, not clients.” Futerra has to then accept accountability for the impact of its work. “The creativity is there to sell. That is its impact and you have to accept it and you have to be accountable for it.”
'The challenge of bringing purpose to life in the context of a creative agency is that the work tends to be a means to someone else’s business ends."
This hints at the real power within the B Corporation movement and the purpose economy more broadly: Its attraction to the growing number of people who want to do purposeful work. Companies that can successfully channel this desire in the workplace, with certification as proof of their integrity, should be at an advantage when it comes to recruitment. Says Townsend: “The most creative people know they have an impact. They know they have the power and can make a choice about where they want to deploy it. And that’s not just creatives. That’s accountants, engineers, scientists… The best of the best want to do purposeful work. The war for talent is a war for purpose.” And it’s a battle in which B Corporation status may be the not-so-secret weapon.
This story was originally published in the YCN Members' Magazine.
A purposeful panel
Find out more about the B Corp movement on the 27th April at our 'Exploring the Value of Purpose' event. We'll discuss how good behaviour can be good for business, and attempt to unpack how the value in such behaviour can be quantified.