You have to BE a B-Corp

Last week I had the privilege of attending the inaugural B-Corp CEO breakfast at The Trampery | Certified B Corp, speaking on the panel alongside two fabulous leaders Nick Canney from innocent drinks and Frieda Gormley from House of Hackney, brilliantly chaired by Joanna Adjetey De Palma from B Lab UK. Whilst I was grateful to be on the panel, the real value was meeting so many other likeminded #B-Corp CEO's and hearing from The Trampery founder Charles Armstrong . Together we can drive such positive change;  a rising tide raises all the boats right? Why not join us?

Here are some of my refections for those of you considering joining us on the journey as B-Corps in the UK are on the cusp of hitting 2000 in total.

Here are my key points that I go on to expand below -

• Purpose and profit are not a paradox - indeed one will lead to the other
• You have to BE a B-Corp - B-Corp must be in your corporate DNA with words and actions aligning
• We need to balance the equation across business size, location and demographic for this to work
• Lead from the top but bring the bottom up with regulation
• Making it mainstream - ethical business shouldn't be a choice some can't afford
• Community - shared learning will help us all thrive in a world of co-opertition
• Moments that matter - in the current economic climate we need to dig in and push against the tide

Profit and purpose are not a paradox

Purpose leads to better business results in the medium to long term. Research backs this up; take two recent studies as examples -

In Harvard Business Review’s eight-year study of extremely high-growth companies, purpose was one of four key growth drivers. Companies that make a social or environmental impact, HBR reports, “create new markets, serve broader stakeholder needs and change the rules of the game.”

Deloitte found purpose-driven brands capture more market share and grow on average three times faster than their competitors. They also report 30% higher levels of innovation and 49% higher levels of workforce retention.

The key however, is accepting that this will be a sustainable profit in both senses of the word, and not about making the largest amount of money in the shortest amount of time. Equally it won't and shouldn't drive excess profitability benefiting a few at the expense of broader stakeholders. But there is still a very respectable market level of return that can be made within those two parameters.

Capitalism isn’t a bad thing. It's not a dirty word. Done proportionately with a level playing field whilst taking into account limited resources as well as other stakeholders, it will be the route to ending a great deal of the permacrisis. It also accepts human nature and motivation theory. Working with these things rather than pretending they don't exist is a realistic way forwards. I firmly believe that profitable purposeful business deployed through responsible ownership alongside the public sector and incensed by joined up fiscal policy is the way forwards.

But it needs to be more than words ...

You have to BE a B-Corp

There are many accreditations out there for aspects of responsible business. B-Corp is the only one I've come across that is thorough, progressive, with a bar set at an attainable, but stretching level and integrated across all aspects of ESG. You have to live and breath it to make it work in the spirit it's intended and ensure re-accreditation. We have found several things need to be present as follows;

• Board level accountability - we discuss and review at every board meeting
• Devolved decision making - people need to be educated and empowered to make decisions in line with our responsible business objectives
• Integration not added on - ihe standard needs to feel that its in our DNA, how we do things, not a tick box afterthought
• Words and actions must match and feel aligned at every level
• Continuous improvement should be seen as the norm - the standard, rightly, gets tougher each time you go through the process and no one should rest on their laurels having been accredited
• Measure what matters - we use balanced scorecards and linked reward
• B-corp is the measurement not the goal - the ethos of responsible business needs to be with you constantly nit juts when going through the process
• Ask the right questions. Seek evidence on the answers.
• Make sure there is a two way dialogue with a broadchurch in the organisation through use of responsible business champions, shadow boards and reverse mentoring.

Making it mainstream

Only around 10% of B-Corps employ more than 1000 people. In the legal top 200 there are only 4% (although there are also some fantastic ones outside the top 200 like Obelisk Support | B Corp Certified for example).

If we want to create the kind of change that will transform our children's futures and show business as a force for good. We need to make this mainstream by taking it to businesses of all sizes, but also not just luxury brands or those whose entire proposition is around sustainability or ethical business.

There is a real danger that we find ourselves in a middle-class bubble. We need to think about every part of society in terms of making ethical choices and having the ability to do so within what they can afford. A few weeks ago the Rochdale bi-election was won with four promises. What really stuck in my mind was that one of them was to open a Primark in Rochdale town centre. Let us never forget the living reality of the majority of the population particularly at the moment. We must find ways to bring ethical choice to those who feel it may be beyond their reach.

We must balance the equation

Consider this imbalance for a moment...

SMEs account for

• 99.9% of the number of businesses in the UK

• 67% of jobs
• 50% of GDP

In terms of investment to help drive growth and innovation the imbalance is starker ... only around 1% of funding goes to female founders. Ethnic minority stats are similar and the geography of the support massively favours London where currently over 50% of UK funding is invested.

What you measure changes, right? To make this stick we need to look for more balanced measures than purely GDP or GVA, bringing in health, happiness and limited resources into account.

B-Corps can help shift the dial and drive the rebalance needed across all the facets noted above. It's encouraging to see private equity and organisations like the British Business Bank building metrics into their funds to ensure better distribution and prioritisation of responsible business.

Bring the bottom up

Like any other population, business has a normal distribution in terms of attitude to ESG. The top 10%, the early adopters, are well down their path and the middle is sorting to see the benefits and follow. We now have a role as ambassadors to help create and maintain this momentum. Our voices raised together can make an unforgettable and compelling sound.

For those who have seen Les Miserables, I defy you not to have been moved when Marius sings in isolation about 'Empty Chairs at Empty Tables' ... I suspect it was the rousing revolutionary choruses of 'Do You Hear the People Sing' or 'One More Day' belted out by the full company that would have had the hairs standing on the back of your necks!

Battles cries aside, the bottom 10%, disproportionately larger businesses and therefore a bigger proportion of GDP, will need regulation to get them there and justify to the markets and their shareholders that other stakeholders must also be taken into account. The Better Business Act provides a fantastic first step for this with the reforms to S172 of the Companies Act. We must continue to pressure to see this enshrined in upcoming manifestos and a commitment of any new government to follow through on it. This paves the way for further incentivisation using fiscal policy around green and place based initiatives that also help solve other aspects of the permacrisis and support society, communities, the environment and equal opportunities alongside helping the economy grow responsibly.

Community rocks

Being a B-Corp isn't a solitary exercise. The growing and inspirational community of prospering businesses provides insight and support in the sprit of great co-opertition.

"When you want to go fast, go alone; when you want to go far, go together " African proverb

The philosophy that a rising tide raises all the boats first struck me when I worked at Boots the Chemist. We found that the more we combined products from multiple suppliers through joint working and co-operation between them in our displays the more they all sold. And of course this is enshrined in game theory through the 'prisoners dilemma'. The more we all work together the greater benefit for us all and the consumers and communities we serve. We all win.

Moments that matter

This is an interesting moment in time. Never has the need for responsible business been bigger but equally after the economic shocks of the last 15 years, with many businesses still healing from the related scars, never has it been harder to justify getting there.

My fear is best articulated by Alfred Doolittle, the dustman father of Eliza Doolittle in Pygmalion (or My Fair Lady if you like me are of the musical type!)

"Morals, I cant afford ‘em governor" (with apologies to George Bernard Shaw for the paraphrasing!)

Despite what should be a sustainable return on investment given time, it's naive to ignore the cost of getting there or market pressures for those still driven by short term super-profits.

However we do need to stick to our determination for business to be a force for good in both good times and the bad. Being responble doesn't mean you duck the difficult commercial decisions but it does mean you do them well.

Now is the time to dig in, remembering the decisions we make today will set the course of the next 100 years. If not now then when, if not us then who and if not here then who. We must step up; speak up and speed up

So, do YOU hear the people sing?

If so come and join the throng and BE a B-Corp.