Entrepreneurs

Being A B – It’s B-Corp Month But What’s The Appeal?

It’s B-Corp Month – for advocates of the business-for-good movement, an opportunity to celebrate purpose-driven companies that aim to do what they do for the benefit of all their stakeholders and society in general.  

But what does that actually mean and why are businesses signing up?  As things stand, more than 3,800 companies across 74 countries have achieved B-Corp status, with around 400 of them hailing from here in the United Kingdom. It’s probably fair to say, however, that the profile of the initiative isn’t as high as it perhaps should be outside of those in-the-know.   

Think of it this way, Walk into your local supermarket in search of, say, a jar of coffee and you might look for a Fair Trade logo on the label as evidence that the growers are getting paid decently for their labours. But would you look for evidence of B-Corp registration or even know what it meant?

Mark Cuddigan is CEO of U.K. healthy baby and toddler food maker, Ella’s Kitchen. The company is a B-Corp and Cuddigan himself is a passionate advocate for the movement, but as he acknowledges, public awareness is relatively low at this stage. “Do most consumers know what it is? I would say no,” he says.  

Which begs the question – why be a B? There is a stringent – and perhaps daunting – application process, with applicants required to score at least 80 out of 200 in an online questionnaire that explores every aspect of the business. Supporting documentation is also required and an interview with someone from the governing body in the shape of a local B-Lab. In the case of Ella’s Kitchen, Cuddigan describes the application process itself as “a bit of a nightmare.”

More Than A Good Deed

So why press ahead? Well on one level, you could see it as a good deed in a wicked world. B-Corp is aimed mainly at businesses that combine profit with purpose, so almost by definition, they are organisations intending to make a positive impact on the world. The B Corp certification process provides a means to assess whether an individual company is, indeed, aligned with the business-for-good ethos. For instance, does it contribute to a healthier environment; create jobs in which workers are treated well and with dignity; and is it helping to alleviate the problems of inequality and poverty? Equally important, can all this be verified through transparent governance policies?  All highly useful.

Proving all this requires a degree of effort and commitment, but Cuddigan insists that by embracing B-Corp, businesses become better at what they do and that feeds through in terms of performance KPIs.    

He cites the example of maternity policy. When Ella’s Kitchen made its application, the company’s policies in this area were seen to fall short of the requirement. Given the values of the company and its position in the market, this was something of a shock. “So we had to change our policies and we had to make them market-leading,” says Cuddigan.  

Now, viewed from a purely financial standpoint, that might not look like a performance win but once you step back to see the bigger picture, Cuddigan says there are real commercial benefits to creating worker-friendly policies. Put simply, staff who are treated well tend to be happier and deliver a better service to customers, Which feeds through to the bottom line.  “If you have happy, fulfilled people, they produce better work,” Cuddigan says. A similar principle could be applied to sound environmental policies. Staff take pride in the company and, again, they go the extra mile to deliver on its goals.    

That’s the theory but it’s not a given. Staff may benefit from changes brought in by the certification process but they also play a part in creating a B-Corp compliant company and, conceivably, that might seem like a bit of an imposition, especially if they are not really on board with the concept. Managers have to win hearts and minds.   

“We thought when we told staff about our plans, we thought they would see it as the best news ever,” Cuddigan recalls. “In fact, it was a bit of a damp squib because we hadn’t explained it properly.” To make it work and get staff on board, it was necessary to really communicate the benefits.

A Snowball Effect

Today, B-Corp status is embedded at Ella’s Kitchen but that’s only part of the story. Cuddigan’s aim is to create a snowball effect. The company itself employs around 100 people so it is still relatively small. It is, however,  encouraging suppliers to embrace the same ethical principles. In fact, the aim is that 50 percent of the supply chain should be B-Corp compliant within five years. This to be achieved by ongoing discussions with existing suppliers and conditions applied to new vendors coming on board.  “We give them a free sustainability plan,” he says. 

By building out in this way, Cuddigan hopes it will be possible to make a huge difference, but again there is a commercial imperative. By creating a sustainable supply chain, he says, Ella’s Kitchen is effectively de-risking its own business.    

So is this something that all new businesses should be considering – particularly if balancing profit and purpose? Cuddigan says it’s probably too much for a new startup – there are things to think about other than certification, after all – but any company can look at their business plan through the lens of values and take things forward accordingly.

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