* Any views expressed in this article are those of the author and not of Thomson Reuters Foundation.
Reading the title of this article, you may be skeptical. Why is business the key? What about nonprofits or even government?
Business is one of the most powerful forces on earth, having the potential to create systemic impact for everyone. While government and the nonprofit sector are necessary and an important part of creating change, they are insufficient to address today’s greatest challenges. Therefore business must step up and play a larger role. The successful company of tomorrow must create value for society, not just shareholders.
For much of the past 50 years, the dominant narrative has revolved around the old maxim: the purpose of business is to maximize shareholder value. With free markets unshackled from government interference, business will benefit society through jobs and economic growth. However, this traditional view is outdated and severely limiting, if not destructive, and has failed to provide the shared and durable prosperity that most of us seek.
To address today’s greatest challenges we need a scaleable, systemic approach, one which restores trust in business. This requires a market ecosystem that includes a supportive corporate legal infrastructure, access to aligned capital markets, and tools that allow consumers, employees and investors to differentiate good companies from just good marketing. It also requires a global movement that enables millions of people to use business as a force for good, providing the data and the stories that inspire everyone to move beyond responsibility (do no harm) to impact.
The B Corp movement is such a solution, putting theory into action. Today there is a growing community of over 1,100 Certified B Corporations, from 37 countries across 120 industries, all working together towards one unifying goal: to redefine success in business. B Corporations are certified by the nonprofit B Lab to meet the highest standards of social and environment performance, accountability and transparency. This helps build their most important asset – trust, which can in turn attract customers, talented employees and capital.
The community of Certified B Corps includes well-known brands like Ben & Jerry’s, Patagonia, Fratelli Carli, Cook Food, and etsy. However, any company can start creating a positive impact. The B Corp movement is for everyone, from public utilities like Green Mountain Power to large, public multinationals like Natura to small tech startups, such as Kickstarter.
And, as the movement grows, it has become an increasingly powerful agent of change. Benefit corporation legislation has been passed in 27 states to create a new corporate form giving business leaders and investors a new freedom to make decisions that are in the best interests of society as well as their bottom lines. B Corps are also driving capital by providing investors with a customizable platform, B Analytics, for benchmarking, measuring and reporting on impact, giving everyone the opportunity to measure what matters.
Now is the Time
With this growing infrastructure in place, the path is now clear to scale business as a force for good. Accelerating consumer and investor demands have resulted in huge opportunities. Consumers are more willing to support brands that are taking a step towards building a better world. In fact, the 2013 Cone Communications Social Impact Study indicated that where price and quality are equal, 89 percent of consumers would switch from their current brand to a brand that is socially responsible.
We are also seeing an increase in the number of impact investors, who are interested in understanding how their investments serve a higher purpose. The increased transparency by Certified B Corps and benefit corporations, and the growing database and tools available on B Analytics, reduces investors’ risk and allows comparability, further helping impact investing to grow.
Today’s best talent are even echoing this demand. The next generation of employees want more than just a salary – they want to work for the right purpose. A report by the Brookings Institution found that in the U.S., 63 percent of millennials want their employers to “contribute to social and ethical causes.”
With these forces in place, there has never been a better time to join the movement. By looking beyond just profit, we will be able to build the next generation of world-class businesses and create a shared, durable prosperity for all.
For those new to measuring impact, the B Impact Assessment provides a free, confidential tool to start managing and benchmarking the social and environmental performance of any company. It also features best practice guides and tips along the way, allowing any company to improve their impact on their community, workers and environment.
Whether you are an entrepreneur, employee or consumer, there’s a way to get involved. Please join us! Have your company take the first step by measuring their impact at bimpactassessment.net and help spread the word about a better way to do business. To learn more visit bcorporation.net and B the Change.
Katie Kerr is B Lab's Communications Director.
