How to Produce a Green Product Out of a Brown Company? Hint, it’s Impossible.
B Lab assesses your business conducts and creates a community for good
An interview with Marcello Palazzi, co-founder of B Lab / B Corp Europe, by Bram Pauwels
The key to outstanding ‘good’ business within the B Corp community isn’t satisfied shareholders or stellar stock exchange rates.
It is all about knowing how to be excellent in everything you do – by working with communities and an inclusive approach.
With a service called ‘B Lab’ assessment companies can assess their internal business from governance to business models and resources to stakeholder management. All come together online to learn in a global community of ‘Businesses for Good’. In this article we meet with Marcello Palazzi, serial entrepreneur for human progress, and co-founder of B Lab / B Corp Europe, who rides the wave of ‘change is possible’. And he can prove it. In my conversation with Marcello, one thing became clear: you can become a successful entrepreneur while striving for more sustainable goals. It is still possible to tap into hallmarks like creativity and entrepreneurship while maintaining a clear focus on the creation of something positive in the world, and leave it better than we found it.
“Just look at the many companies who have already done it.”
With a vast majority of the world’s investable resources in the hand of corporations and SMEs – 85% as I believe Michael Porter mentions – and around 35 to 110 million companies worldwide, one could say that betting on business as the motor of our global society and such as a vehicle to drive change for good has a fair chance of winning.
It is your enterprise. This idea that you accelerated with a purity of creativity into the start-up, SME or multinational that you lead. How come that some of these have lost that purity and how did it get corrupted?
In the way back to this purity, or ‘origins of good’ two key elements stand out: inclusiveness and communities. Adages. Still in need of finding new use for our current way of doing business, Marcello has taken on this struggle since founding B Lab Europe
From shareholder to stakeholder
As an entrepreneur, you have to be excellent at all you do. Period. There is a lot at stake. What if you move your focus away from your shareholders? It sounds like a crazy idea, right?
What if you include the planet’s stakes in your business model? Absurd!
You might not be on this path of a fully inclusive business, but you probably still do something that sparks the pure creativity you felt at the initial phase of your venture. So let’s
take it from there.
B Corp standards enable your organisation to contribute to a prosperous society by focusing on inclusiveness. Ask yourself how you can incorporate society’s marginalised, to what extent are you enriching people’s lives and positively impacting our planet? Concerning its governance, does your business challenge the economic system to move towards a real economy, one that serves people instead of one that exploits them? It demands well-governed companies, transparency and your leadership capabilities.
“We help leaders walk a path of integrity towards their stakeholders in society.”
“We’ve looked at the importance of moving from shareholder to stakeholder, now let’s take it a step further. Our final aim, after all, is to create shared prosperity for all.”
Assessment of your business conduct, according to the B Lab standards, stimulates organisations to contribute to a prosperous society by focusing on 1) inclusion, 2) sustainability, 3) integrity and 4) a lot of innovation. The tool generates a cumulative score and provides insight in your relationship to a wider society. By performing this assessment you join 1719 corporations who see g themselves as the new class of businesses. These businesses are spread over 50 countries but unified in one goal.
Open data standards
Globally we become more aware of the inadequacies around measurement standards.,”The GDP for instance lacks measurement of innovation and has trouble to include a broader sense of societal welfare alongside economic welfare.
So does B Lab claim that measuring profitability fails to capture the full extent of our entrepreneurial intentions? “It’s like an evolution, we strive to be the vanguard of business. And, to support entrepreneurs to be excellent in everything they do and aspire to do.”
The GRI and ISO standards, unmistakingly recognisable by SMEs by its somewhat bureaucratic approach, measuring solely for compliance purposes tends to stand in stark contrast to the entrepreneurial reality, which is the DNA of B Corp. It is developed for and by entrepreneurs, in spirit of measurement based on aspirations, and now grows into a globally used tool.
Both Impact Hub and B Corp find each other, among others, in our belief that ‘communities are essential to solving the most pressing social issues facing humanity today. Healthy communities form even stronger and more vibrant cultures and culture is what facilitates individual behavioural change. It is this personal shift that creates long-term, sustainable change from a bottom-up approach.’
Hence, one of the biggest advantage of B Lab is learning from other entrepreneurs. With an open source standard setting process ‘for the best in business,’ the B Corporation Community now consists of 40.000 companies online, varying in different stages of their assessment on becoming a force for good, and actively exchanging learnings. “Which can be as simple as picking up the phone and calling one of your fellow companies.”
Concrete solutions for change
So, to wrap it up see here some impactful examples of B Corporations:
‘Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.’
Patagonia to Help Fund Residential Solar Installations
Patagonia is working with Kina’ole, a solar finance company, as well as New Resource Bank, Beneficial State Bank and the installer Sungevity, all certified B corporations. Such companies are part of a viable approach that requires executives to take into account not just how decisions will affect profit and shareholders, but also how they will affect the public, generally defined as a society or the environment.
“We all recognised that the B-corp relationship created a kind of mutual interest in the business and the social and environmental side of how we run our businesses. That naturally led to a conversation that became this deal,” said Andrew Birch, chief executive of Sungevity. “This is a new name providing new funding for the solar sector, and that’s critical.” (Source: NY Times, 2016/11/03)
B-Team (Richard Branson)
B Corporations partners with the B Team. The B Team was founded in 2012 by Sir Richard Branson and Jochan Zeitz with the hope of bringing together global business leaders to change “business as usual.”
Much like B Lab and B Corporations, the founders and members of the B Team see opportunities for businesses to change the world for the better—opportunities that most businesses are missing, or don’t know how to take advantage of. We also share the belief that not only can businesses join non-profits and governments in the work of creating a better world, but that they must if we are to see success.
As part of their Plan B initiative, the B Team has set ten Challenges for their member businesses—many of which fall firmly in line with the goals of B Lab, B Corps, and benefit corporations. For example, Plan B urges business leaders to “drive full transparency,” scale true accounting,” and “lead for the long run”—goals the B Corp community can fully get behind. Through our new partnership, B Team member businesses will be encouraged to:
• 1. Measure what matters by comparing and improving their company’s social and environmental performance using the free educational tool, the B Impact Assessment.
• 2. Bake their purpose into the legal DNA of the business and help ensure it remains central as they scale, bring in outside capital, plan succession, or even sell, by registering as a benefit corporation.
• 3. Be recognised as a leader of this new economy by becoming a Certified B Corporation.
Impact Hub Amsterdam
Both B-Corps and Impact Hub represent a voice that needs to be shared – one that utilises the power of business to solve social and environmental problems. We are convinced that it is important to be aware of, to be transparent in and to improve our impact on society.
Impact Hub Amsterdam became a certified B-Corp, because:
#1: We believe that communities are essential to solving the most pressing social issues facing humanity today. Healthy communities form even stronger and more vibrant cultures and culture is what facilitates individual behavioural change. It is this personal shift that creates long-term, sustainable change from a bottom-up approach.
#2: As the frontrunner in the business of building healthy communities, we are the product of the individuals and organisations with whom we surround ourselves.
Impact Hub creates and connects communities that share our values, mission, and energy for creating the world in which we want to live. To be part of the B-Corp community is a logic choice that supports us to maximise our collective commitment to impact.
#3: Our B-Corp certification provides us insight and transparency into the way we do business, as we believe one should ‘do’ business. The B-Corp metrics – and the process of going through the metric validation – has provided real learning and reflection for our next Impact Hub space. We commit to co-evolving this standard so that we can collectively raise the bar.
Bonus: worth a mention, and for you to explore, these are some of Impact Hub’s members and friends who are among the Dutch B Corps:
Tony Chocolonely, Moyee Coffee, MUD Jeans, Triodos Bank, Greenfox, Waka Waka and pymwymic.