For Coen Gilbert, B Lab will help ensure this trend reaches its conclusion, because he is convinced that shareholder primacy is a lesser way of doing business, even for the shareholders themselves. Through their growing network of B Corp alliances around the world, the B Lab founders hope to see other national legislatures follow suit. The Creative Climate. B Corp founders reveal impact to date. One of the big challenges ahead is to get investors on board. Nice is suddenly fashionable in Corporate America. Former investment banker Andrew Kassoy, the finance guru of the three, spells out the logic behind the legal requirement in simple terms. Certification is the bulk of what B Labs does, but not everything. When Coen Gilbert's friend Seth Berger, a lifelong basketball fan, told him in the early '90s that his solution to avoiding a traditional finance path after business school would be by starting a specialized basketball-apparel brand, it seemed like a fun idea. 1. Then he and his business partners fully developed the idea of a B Corporation. Outside the US, B Corp already counts a strong and growing base of certified firms in South America, Australia, the UK and mainland Europe. Jonny Price FUND MANAGER. "And I think it's a cool thing to observe and to be a part of. He went through the stress of knowing that his sister worked in downtown Manhattan during the 9/11 attacks, and he learned she was pulled to safety from debris by a first responder. Companies can also apply to be legally recognized as "benefit corporations" in 34 states and Washington, DC, as well as in Italy, with other countries considering legislation. . B Corps have been around in the US since 2007, with brands like Ben & Jerry's and Patagonia achieving certification. He met with Leslie Christian, who was then the CEO and president of Portfolio 21 and focused on socially responsible investing. He studied the careers of entrepreneurs in this space, like Ben Cohen and Jerry Greenfield of Ben & Jerry's, Tom Chappell of Tom's of Maine, and Judy Wicks of White Dog Cafe. But what makes the B Corp certification stand out is the obligation that it places on companies to amend their articles of association to clearly and unambiguously reflect the company’s embrace of stakeholder capitalism. The B Lab founders are pinning their hopes on leaders in the corporate world to win the argument for them, But, despite growing interest on Wall Street, support for the B Corp model is still mostly at the “whispering behind-the-scenes” stage, according to Kassoy: “Investors tend not to have the courage to come out and talk about these kinds of things. Katie Powers FUND MANAGER. guardian, jan. 7, 2016. Team. Can B Corp be the next Fair Trade for socially-minded corporations? Emmanuel Faber, head of French food giant Danone, which acquired America’s largest public benefit corporation, WhiteWave Foods, in 2017, is another vocal supporter. "So this is basically recognizing the fact the credit rating of Danone is better as a B Corp than not being a B Corp," he said. If you have been operating for less than a year, you can become a Pending B Corp which is £250. Once a firm crosses a certain performance threshold on these dimensions, it makes amendments to its corporate charter to incorporate the interests of all stakeholders int… Certified B Corporations are social enterprises verified by B Lab, a nonprofit organization. They brought on Andrew Kassoy, a Wall Street connection, and launched B Lab the next year. Yet, these three fast friends have not only spelled out what an inclusive business structure looks like; they have also demonstrated how to build a movement around that structure. One founder is on a green card and already works there. Oliver Balch talks to Jay Coen Gilbert, Bart Houlahan and Andrew Kassoy, about the movement's exponential growth, and the need to win over mainstream investors to their inclusive business model. At that point, the majority of folk would have thrown in the towel. Four days after that, their dad died from lung cancer. B Corps are leading a global movement of people using business as force for good. I'm focused on trying to find B Corps who can benefit from raising capital on Wefunder. Instead, the brand, AND1, reached an audience, inked NBA deals, and most famously became linked with the top performers in amateur streetball competitions. (The B Corp certification is an independent label.) Few people set out to change the world the way Jay Coen Gilbert, Bart Houlahan, and Andrew Kassoy did when they founded B Lab. Not the B Lab founders. After a few years of recruiting companies, Coen Gilbert wanted to further help companies with a social mission retain it after selling or going public, and he believed the next step would be through a legal certification. The story doesn't end there. Can the H-1B co-founder lead this company? The kind of pan-stakeholder model that the B Lab founder were advocating simply didn’t exist. Learn More. Kassoy points to the recent Vote Every Day campaign, which was conceived, designed, financed, and executed by a group of concerned US-based B Corp companies off their own bat. Jay Coen Gilbert, Bart Houlahan and Andrew Kassoy believe the currently prevalent system of shareholder wealth maximization is both socially deleterious and outdated. While the value and success […] © Reuters Events 2020 | TERMS OF USE | PRIVACY POLICY | ABOUT US | +44 0207 375 7212 |, Getting investors to back the B Corps is the next big challenge. "And that was one of the dominant and most inspiring attributes of all the entrepreneurs and investors we'd been meeting, is they weren't screaming, yelling about an unjust system — they were actually working and investing in building companies that were making real differences in the lives of their workers, their communities, and future generations through their environmental practices. If full inclusive capitalism is ever to become a reality, it will be the consequence of like-minded groups and organisations, networks and movements, all coming together. But there was a hitch. And increasingly that’s what people care most about. Bottom line: Venture investors do not “hate” B Corps. Coen Gilbert decided his vision should go beyond charity, but he also abandoned an idea for an investment fund. Annina frank | Kassel und Umgebung, Deutschland | Founder at F.N.B. Paul Polman, Unilever’s retiring CEO, was recently quoted as saying that Unilever itself was working towards B Corp certification: “It would send a strong signal to the market and attract hopefully even more of the right shareholders.”. Reuters Events is part of Reuters News & Media Ltd, 5 Canada Square, Canary Wharf, London, E14 5AQ. “It's pretty rare for companies to be doing stuff collectively and not just individually trying to sell their own stuff [yet] you've had hundreds of B Corps all around the US, all participating in that campaign.”, As big as the B Corp community is, we're just a fraction of a much broader movement. So what makes it such great shakes? Founder of B Corp Germany B Lab Europe Foundation Apr. B Corps are required to embed stakeholder governance into their articles of association, legally committing themselves to making decisions through the lens of a triple bottom line: profit, people and planet. The decision by three former college mates to set up B Lab in 2006 may not be quite in the same league – yet – but the trio’s star (as well as their impact) is most definitely on the rise. Pioneers Post, April 13, 2016. So if your startup is still in the bootstrapping phase, it may not be worth it quite yet. Both by law and by culture, most people understand that the purpose of business is to maximise value for shareholders. Today, 35 US states, plus Washington DC, have introduced statutes allowing for so-called “benefit corporations”. The B Corp certification is to businesses what fair trade is to coffee, the team describes. Connecting the drops in the battle against climate chan... Scorched earth strategies: How Cargill, Unilever and Di... ‘We can win the war on plastic waste if we marshal th... For sustainable, read resilient as companies strengthen... Biden’s first steps spur audacity of hope for US climate action proponents, 'The mining sector must come clean about its growing impact on deforestation', Working to protect Earth’s most precious raw material. That said, not everywhere needs a change in law. It's about the entire company and its impact on all of its stakeholders, not just one of its stakeholders.”. Yvon Chouinard, founder of Patagonia, has written "Benefit Corporation legislation creates the legal framework to enable companies like Patagonia to stay mission-driven through succession, capital raises, and even changes in ownership, by institutionalizing the values, culture, processes, and high standards put in place by founding entrepreneurs." Italy was the first country outside the US to adopt this policy, and Colombia is also considering it. As with their efforts to change the law, the B Lab founders are pinning their hopes on leadership within the corporate world itself to win the argument for them. Some B Corps may also be allowed to charge annual fees, collect fundraising, and other non-profit activities that are inviting to investors. Most people understand the purpose of business is to maximise shareholder value. For Gilbert the campaign encapsulates the seemingly paradoxical dynamic within the B Corp movement of autonomy and self-determination, on the one hand, and a strong spirit of community and cooperation on the other hand. In the past year alone Unilever acquired Brazilian organic food company Mae Terra, organic tea maker Pukka, US eco-laundry brand Seventh Generation and Sundial, a US haircare brand that serves consumers of colour. B Lab certifies companies based on how they create value for non-shareholding stakeholders, such as their employees, the local community, and the environment. Certification fees and other services cover about 55% of the organisation’s running costs. In a similar spirit, B Lab regularly reaches out to other organisations that share their disruptive vision, such as Conscious Capitalism and the Richard Branson-backed B Team. In 2010, the state of Maryland approved a new-look company form that allowed corporate directors to balance profits with other considerations. I'm passionate about re-imagining a financial system based on people. the atlantic, nov. 26, 2014. After months of discussion and planning, Houlahan decided that after they sold AND1 to American Sporting Goods in May 2005, his friend's ambitious idea would be worth pursuing. In 2010, a Delaware corporate lawyer helped B Lab with a proposal for a "benefit corporation" legal status. With certified firms on every continent, it is impossible to point them all in a single direction. The ‘B’ in B Corp stands for “beneficial”: for customers and employees, suppliers and sub-suppliers, oceans and orangutans, flora and fauna. With certified firms on every continent it is impossible to point them all in a single direction. . B Corp alone won’t usher in a truly stakeholder economy. Coen Gilbert thinks that in the future, the toxic short-termism he believes results from shareholder primacy will seem absurdly outdated. There are numerous member resources that are available to a B Corp once they are allowed to form. Why the reticence? And, yes, of course, for the all-important  holders of corporate capital, too. As Jay states: “I think that the initial leadership will come from a community of CEOs working together to make that case to investors and then those investors signalling, "Great. B Lab analysts grade each company on its benefits across five areas and refresh the assessment every three years. Bart describes such as move as a “pretty fundamental shift” for most businesses, Jay agrees, saying it is daunting, particularly for those companies that are listed or on the hunt for external capital. Partly, it’s because the movement has grown so exponentially, Houlahan responds. B Corps use market tools to create public goods B entrepreneurs seek to create viable companies that offer solutions to social and/or environmental problems. The sadness he felt made him think about his own mortality, and "that triggered a pretty intense period of reflection on what's the highest and best use of my life," he said. ‘L… https://t.co/74Dsp7Lc9q, Scorched earth strategies: How Cargill, Unilever and Diageo are cutting their water footprints, Connecting the drops in the battle against climate change, Mining firms ‘failing to get to grips with worsening water security crisis’, From 500 litres of water a day to 50: P&G heads up partnership to stave off next Day Zero, The Gulf companies innovating to reduce their dependence on desalination. "You can't start asking other people to do stuff unless you want to do stuff yourself," Coen Gilbert said. B Corp Certification doesn’t just evaluate a product or service; it assesses the overall positive impact of the company that stands behind it. He found it to be a fundamentally flawed concept, and his movement was designed to help decrease its hold over society. There was a chance to find out how the B Corps people are getting on one year on from launching in the UK at a session put on by Marmalade, the fringe event that happens alongside the Skoll World Forum. Take Action on Spreading the B Economy Today. B Corp certification is about the entire company and the impact on all its stakeholders. Danone CEO Emmanuel Faber has said he is so pleased with what the certification has done for that business that he is aiming to have all of Danone achieve it by 2030. ", "I think that is a conscious human choice," Coen Gilbert said. “The … Credit: Robert Cicchetti/Shutterstock. Coen Gilbert doesn't see his movement as a charitable act, but a participant in a major shift in how businesses are run. Registered in England and Wales: 2505735. People want to work for, buy from, and invest in businesses they believe in. “You can't expect a different outcome for society or for the environment if a company is still beholden to the interests of a single shareholder . After leaving the basketball-apparel company AND1, Jay Coen Gilbert founded the B Corporation movement, aimed at toppling shareholder primacy. The B Corporation movement has come a long way since the founding of B Lab (the nonprofit behind the B Corps) in 2007. Think of the Marine Stewardship Council, the 1SO 26000, and the Fair Labor Association code all rolled into one. She agreed with Coen Gilbert that the reign of shareholder primacy, rooted in economic theory most popularly expressed by free-market economists like Milton Friedman in the 1970s and then entrenched in judicial precedent throughout the 1980s, was not only harmful to other stakeholders but bad for the long-term health of a business. Italien ist seit dem 22. Diana Rojas reports, Comment: The impact of the extractives sector on forest loss has been largely overlooked, says CDP's Morgan Gillespy. This long and exacting list of social, ethical and environmental requirements turns what sounds like a wishy-washy idea into robust reality. According to the co-founders of B Lab, shareholder capitalism is failing us. This fee starts as low as £500 for certified B Corps and scales with revenue. And then two weeks later, one of his AND1 team members died in a car accident on his way to work. Today, there are 2,655 Certified B Corporations across 60 countries, and they include Danone North America, Patagonia, and Amalgamated Bank. Coen Gilbert had enough of a financial cushion that if the project failed miserably, he'd be able to work his way back onto Wall Street. In The New York Times on August 25, 33 B Corp CEOs called for the business leaders of the Business Roundtable to put their words into action by adopting benefit corporation governance structures. Corporation | 0 Kontakt | Vollständiges Profil von Annina auf LinkedIn anzeigen und vernetzen Companies that pass requirements pay an annual fee. Yours Truly, Julie Fahnestock, founder of B Storytelling & Secrets of B Corp Consulting Alumna. 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I joined Wefunder in early 2018, after 7 wonderful years running Kiva's U.S. lending division. It is this second attribute that edges them towards possible “epoch-making” territory – if they can get the rest of the Wall Street to follow the likes of Paul Polman and Emmanuel Faber in conversion to the B Corp cause. But now corporations like Danone and Unilever are genuinely pursuing the initiatives that 20 years ago were only for dreamers. In the US, where the B Corp movement began, corporate law prevented many companies from altering their legal status, even if they wanted to. This is the second in a weekly series of excerpts from the upcoming book “The B Corp Handbook: How to Use Business as a Force for Good.” By Ryan Honeyman I first discovered the AND 1 mixtapes in Kickstarter co-founder and CEO Yancey Strickler said the company pursued B Corp certification to “bind the company and future leaders of the company to act with a set of values.” Strickler added: “If it’s just based on assessment, there’s always the opportunity to betray those values or, when you’re in a tough spot, to make a decision to compromise.