Good businesses do more than generate profit and always have done. When a business only focuses on generating profit to the exclusion of everything else, it isn’t realising its full potential. Businesses can and do make a very positive impact on social and environmental change and, what’s more, many business leaders and consumers want them to do even more.
A recent survey highlighted the appetite for businesses to play a greater role in tackling pressing social and environmental issues. Over half of consumers are more likely to give their custom to a business with a strong stance on social and environmental issues and two thirds believe they have a responsibility to tackle environmental challenges.
The role of business in society is being increasingly questioned due to its failure to offer a convincing answer to a long list of social and environmental challenges around employment and supply chain practices, environmental degradation, bonuses – the list goes on. Problems continue to persist and it is becoming increasingly clear that government and charities cannot solve these challenges alone – especially not in the context of the capital that is available to them.
This is why the global B Corp movement, which launches in the UK this week, is significant. By adopting a change in their governing documents, B Corps are legally required to serve workers, communities and the wider environment - as well as shareholders. They exist for people and planet as well as profit. But this doesn’t run counter to creating shareholder value – far from it.
The philanthropist business movement has gathered momentum as investors, employers and consumers recognise that companies which create positive social and environmental impact, and which treat their workers with respect and operate with good governance, are the best of businesses.
There are over 1,400 B Corp certified companies worldwide, including Ben & Jerry’s, Kickstarter, Change.org, Patagonia and Natura, Brazil’s largest cosmetics company.
This is good for business too, evidence increasingly suggests: These companies have above average levels of employee engagement and job satisfaction amongst staff and increased resilience in times of economic turmoil. They make up 25 of the Inc5000 list of the fastest growing private companies in the USA.
It’s becoming increasingly clear that businesses can benefit shareholders whilst also addressing social and environmental problems – and that there is a huge demand for them to do so. If this can be done then solutions will attract capital and can be scaled.
Capitalism must and will evolve for the better and the arrival of B Corps in the UK will bring new energy and momentum to the UK economy. The long term stability of our society is at stake.