Business is changing. In today’s hyper-connected world, where any organisation is only ever a few clicks away from a media storm, complete transparency and trust is key. The Volkswagen scandal was a recent reminder of that.
Today’s consumers are more educated, aware and responsible than ever before. We are more informed about the products we use and the brands we buy into. Survey after survey has shown that we are far more motivated to support businesses that have a purpose beyond profit.
My experience founding Ella’s Kitchen proved to me that having a socially conscious business model does not inhibit profit making, the reality is quite the opposite.
There is a real thirst for change in the corporate world, that’s gathering momentum fast, and the UK can be at the forefront of it.
The launch of the B Corporation movement in the UK last month is certainly evidence of that. With over 1,400 companies across 42 countries this movement is proof that change is not only coming – it is here.
Recently I had the privilege of opening the London Stock Exchange with Kerry Kennedy, daughter of Robert F. Kennedy in support of business as a force for good.
Together with over fifty London business leaders, we were calling for a new kind of capitalism that’s fit for the 21st century. There is a need for a new evolution of capitalism that creates sustainable wealth, but only alongside social justice, environmental sustainability and human rights advancements.
To achieve this, the UK needs a formal process for business to contribute positively to society. To do this, I unveiled my idea for a “Public Benefit Company”, which would be legislated for by parliament and enshrined within the Companies Act.
Public Benefit Companies would be driven by profit, whilst also generating a clear public benefit that could be audited and evaluated. These businesses would be bound by their articles of association to take active responsibility for their social and environmental impact. Having satisfied rigorous criteria like committing to zero carbon footprint and paying the real living wage, these companies would qualify for tax breaks or other benefits in return for doing good.
This model is a step beyond the CSR window dressing of the past – it is a tangible way to deal with real, systematic issues in our country. It will effectively share out the responsibility for societal issues between government and business.
The Public Benefit Company model will put social responsibility at the heart of the business model rather than as a bolt-on or after thought.
This is an opportunity for the corporate world to regain trust by starting to actively solve some of the problems that it previously created.
These debates are no longer the domain of activist entrepreneurs and small businesses, they are high on the agenda of investors and major corporate companies worldwide.
For the next generation, stories like the Volkswagen scandal will be unthinkable relics of a world that’s long gone.