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B-Corp Legislation Is Helping Pave the Way to the New Economy
Seven years ago B Lab started certifying companies that maintain superior social and environmental standards as “B Corps.” But with the passage of Benefit Corporation legislation in 19 states, the District of Columbia, and now in the watershed State of Delaware, we’ve truly reached a tipping point in the formalization of the New Economy. An economy that will not only allow us to create profitable business today, but to build a productive society for our children’s tomorrow.
The Consumer Demands Better (Business)
Consumers create markets. Business 101 says the brands that win are the brands that deliver what the consumer wants. Luckily for society, what consumers want more and more is responsible, values-oriented business–the expression “vote with your dollars” is moving from the rally cry of fringe movements toward a household phrase. Consumers are demanding a new type of brand that reflects and embraces who they are and what they find important.
Profitability Because of Purpose, Not Despite It
A skeptic might propose that by formally committing to social and environmental standards, a company might be sacrificing profitability for purpose – in short, that it’s bad for business. I assert that this is a misnomer to be flipped on its head. The success of some of today’s most beloved brands – like fellow B Corps Warby Parker, Etsy, Patagonia, Ben & Jerry’s – has not been despite their social and environmental missions, it’s been because of them.
The criticism also assumes that brands have a choice to disregard social and environmental responsibility – another antiquated perspective the modern company cannot risk falling fool to. Not only do consumers demand better from the brands they support, in the digital and social media driven era, companies don’t have the luxury of assuming that anything less than the highest standards of corporate citizenship are acceptable. In the most pragmatic terms, responsible business is a good business decision.
Just Good Business Sense
One of the reasons Plum has become the fastest-growing baby food brand in America is because our core customers share the values we wear on our sleeve. Earlier this spring, Plum Organics was acquired by the Campbell Soup Company. Often when a small, mission-driven business is acquired by a larger company, there is speculation and concern that the values might fade away.
We’re proud to say that nothing could be further from the truth. Not only did Campbell not prevent us from reincorporating as one of the first Public Benefit Corporations in the State of Delaware (two months after our deal closed), they helped us get it done. Adopting this legislation for Plum is just a natural extension of how we do business and Campbell supports that.
Recipe for Success
To those looking to create a values-oriented business that sustains its mission over time, here’s my two cents:
Make it personal. Have it grounded in something that truly has meaning in your own life. I became interested in children’s nutrition after the birth of my two daughters.
Make it a mission. Ultimately the personal and individual need must tap into a broader mission. For me, I wanted to make sure every child in America had access to great food from their very first bite.
Tap into a movement. From day one, we tapped into the broader group of parents, like-minded companies, and non-profits out to improve kids’ health through better nutrition. As our “kids health” ecosystem grew so did the groundswell of consumers who were voting with their dollars. We became part of a movement that was bigger than us, but also made us big.
Etch it in to stone. As our company grew, so did our ability to effect positive change in the world around us. It was our mission that gave our company purpose; it was the ground swell of parents that made us successful and to ensure we stay true to the founding values and our commitment to parents across the country we became a Benefit Corporation. The B Corp movement provides the structure required to etch your mission in to stone.
Come On In, the Water’s Fine
To existing B Corps and responsible businesses: Benefit Corporation legislation is only as meaningful as the corporations that take advantage of it. For those mission-driven companies already out there, follow the lead of industry rock stars like Method, New Leaf Paper, Alter Eco and the other recently reincorporated B Corps. Rally the troops and reincorporate – codify your values, gain full credit with your consumers, and help accelerate the New Economy that rewards responsibility.
To future entrepreneurs and business leaders: If you are a budding entrepreneur trying to figure out how to become profitable while still staying core to your mission, don’t waiver or question for a second that you can’t have both. Budding social entrepreneurs can avoid creating tension between maintaining their mission and maintaining their bottom line by baking that mission into their brand identity and product offering. Then it’s just good business sense to maintain that mission, the same way you would maintain any brand attribute that’s driving consumer loyalty.
Live at the intersection of creating great products and services and having meaningful social & environmental impact in the world. There is a market for this kind of business, there are investors for this kind of business, and now there’s a corporate structure for this kind of business. Seize the opportunity.
To consumers: Thank you. Please keep voting with your dollars.
Editor’s Note: This piece was originally posted on the Huffington Post and has been posted here with permission from the author.
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