Special episode: B Corp – balancing profit, people and the planet

More and more businesses are becoming B Corp certified, with over 7,000 across 160 industries in 90 countries now part of this global movement. 

In the UK, there are now over 1,500 B Corps, employing more than 85,000 people. All have been recognised for prioritising people and planet in the way they approach making a profit. 

We have talked to a number of guests about B Corp – explaining what it is, the process of becoming certified and what their businesses have learned. Now we’ve collected some of these insights in one special episode. 

Transcript

Mitch Tonks:

Anyone that's got a B Corp, I want to work with them because I understand their values and they understand mine, and I think that's the real importance of it.

Joanna Allen:

And I think that's what's really powerful about B Corp. We didn't change what Graze was doing because we wanted to become a B Corp, B Corp accreditation sort of validated how we were operating as business in the first place.

Myles Hopper:

If a company is a B Corp, you know they're doing a good job in respect of the planet, in respect of their team, in respect of their impact.

Tom Bourne:

Fundamentally, is a business fit for the future is the question that the B Corp framework answers.

Mark:

Welcome to a special edition of our Business Noodles podcast, brought to you by PKF Francis Clark. Today we focus on B Corps, a movement that assesses how well businesses balance profit people and the planet. There are now over 7,000 certified B Corporations across 160 industries in 90 countries. The numbers in the UK are increasing rapidly to over 1500 in 2023 involving more than 85,000 employees. B Corps have been much discussed by our podcast guests, and in this episode, we explore some of their comments explaining what B Corp status achieves and the process underlining it. The best place to start is with Tom Bourne of Greenheart, who helps people through the certification process. He explains the B Corp philosophy and where it started.

Tom Bourne:

B Corp is really pivotal to this shift from shareholder-centric business models to much more stakeholder inclusive models. It is very much built on that premise. Came from the US where it was founded around 15 years ago and came to the UK in about 2015 and really kind of answered this question that was beginning to emerge in the mind of business leaders about, "What are we really here for? What is our role in addressing some of these things?"

So B Corp itself represents a few things. First and foremost, it is a really comprehensive operating framework, if you like, against which businesses can benchmark themselves and establish whether they have all the kind of fundamental architecture in place to be looking properly at social and environmental impact, and then, set themselves a pathway to improve.

It's also, as a movement, an incredible forum for leaders who carry the same values, who think the same way and want to collaborate and convene with each other to drive change at a system level.

And look, there are, as I'm sure you know, Mark, there are plenty of sustainability-related reporting frameworks and certifications out there, but this is slightly different in the sense that it really covers every aspect of a business's model and it also has this sort of third party verification process. So a business goes through it, they're not just marking their own homework, they're actually being judged against their peers.

Mark:

To give a flavor of why businesses are looking at B Corp status, we turn to Myles Hopper from Mindful Chef, the Healthy Food Box company.

Myles Hopper:

So just like you, Mark, hadn't heard of B Corp until late-2017, early-2018. And it's quite hard to constantly tell people if you are doing a good job in certain things, you don't always want to be shouting about it, and it's quite hard to articulate it.

And really, what B Corp did for us was two things. One was it was that third party accreditation of, okay, once you understand what a B Corp is, if a company is a B Corp, you know they're doing a good job in respect of the planet, in respect of their team, in respect of their impact. So that was a big part of it for us.

And then, the other part, I guess, was actually being a collective of companies who are trying to change the way that businesses operate. It doesn't have to solely be a choice between doing good and making a profit, actually, if you get it right, you can do all of those things together and actually have a really successful sustainable business long into the future.

Mark:

Mitch Tonks from restaurant group, Rockfish, links the concept to how he saw his business evolving after he started running a non-public company.

Mitch Tonks:

So interestingly, I've often pondered over why are we opening more restaurants and what are we doing? Remember, I ran a public company previously with my last little fish shop, grew into 13 restaurants and was floating on the A market in 2005. And I found myself no longer running a company or running a company purely for profit and to get the share price up and making decisions that were really based around that.

When we started Rockfish, I was pretty clear that wanted it to change something and to make seafood better. And I've always had this mantra that if you could build a business with really great people, you could achieve much more than making money, which is why we raise money in the community. We do a lot of community work. We raise money in the community and put it back into the community for some of our environmental projects and supporting some of the more obscure, lesser known charities in our areas. And so, I kind of felt myself that you could run a business that was beyond profit, that all stakeholders could benefit.

And I often thought that it would be a terrible place that you sold your business and you made your returns and you had to say goodbye to all the people that you'd worked with for 10 years or more, and you were going to go off and do your wonderful thing and everybody else was going to carry on doing the same things they'd always done. And it just felt to me, I don't think I'd really enjoy the thing that I was doing if I really thought these people didn't benefit either.

And so, when B Corporation came along, I can't remember, I saw it somewhere, no, in fact, it was Laura, our marketing director, comms director at work said to me, "Have you heard about B Corp? Just bit of a buzzword." And read up on it, I was like, "Oh, my God, this stuff is amazing."

And so, we got some people involved and we're really working hard to get our B Corp certification, and it's a long job and we are having to change so many things. But I think B Corp certification for me is an incredible goal. It's going to be tough. I think it's probably one of the toughest and more authentic certifications you can get.

I think a company that gets at you... I want to deal with other B Corps, right? Anyone that's got a B Corp, I want to work with them because I understand their values and they understand mine, and I think that's the real importance of it.

Mark:

Nick Rodda from cream producers Rodda's talked through how he saw B Corp status helping his family business.

Nick Rodda:

B Corporation is an American standard. So it started off in the United States, and this was really to capture and monitor all the great work that businesses are doing. Lots of businesses are obviously in business to generate a profit, but it's what you do with that profit and how you spend that and how do you invest those money back in.

We do lots of good things here within the business, it's within our DNA over the years. So when you're naturally living in Cornwall, such a beautiful place, you want to care for the environment. We like working with the people here in Cornwall, creating employment, but also, helping people with charitable causes as well.

So as we were doing this, we really wanted a benchmark or barometer to just see where we were and how do we look to improve to be better. So we embarked on the B Corp campaign to get that accreditation, to get that benchmark of where Rodda's was actually sitting.

It was quite a long process we had to go through, and record everything that we did and translate it in. And probably, one of the downsides of being a family business, we didn't have a lot written down, we just did it, so we had to go away and sort of get the paperwork in place. So we had the actions, but we just didn't have the necessary support in paperwork. And that probably took us about six months to get out for them. But we came in and we got a great score and we got our accreditation on the first time of trying.

So we see this very much as an endorsement for what we're doing, but it's also just telling people so they know that Rodda's, when they buy some of our products, that we are giving something back to the community, whether that be through environmental or through our charity works as well, it's not just a straight for profit organization.

Mark:

We discussed the importance of a strong business mission with many recent guests and Jaye Cowle from Digital Performance Agency Launch re-emphasized this link between B Corp status and company purpose.

Jaye Cowle:

So we are a B Corp, that's a little bit of a shortcut to say that we are a company that believes in purpose, people, environment, community, and one of the opportunities that businesses have is to create value, and that is normally driven by a purpose why they exist. Our purpose is powered by happiness. That doesn't say anything about the fact that we do performance marketing, but it's the energy and intention with everything that we do to have movement towards happiness.

Mark:

Even given these potential benefits, many of our guests did highlight the commitment needed to the process. Myles Hopper again.

Myles Hopper:

It was a long process. Nowadays, there seems to be all sorts of agencies and people who can take their workload off of people's shoulders and do it for you, which is why it has exploded somewhat into more and more people taking on B Corp. But it took us a year, there were only six of us working in the company at the time, so fell onto mine and Giles’s shoulders quite heavily just to get it done.

The point was I think we were already doing a lot of the things as a business, the way we were treating our staff, the benefits we had in place, the way we were working with our suppliers, the nature of the company and how we ran it.

Really, what we didn't have was necessarily the paperwork, the trail to prove it, so we spent a lot of time actually implementing that and sorting all of that side, because as a startup, you don't have lots of paperwork, and if you do, you don't know where it is, it's put in a special drawer somewhere.

Mark:

Green Heart's Tom Bourne emphasized the need to understand the motivation for seeking B Corp accreditation.

Tom Bourne:

We ask every potential client, what's their motivation for doing this? And very rarely now do we hear, "Well, we want a badge as a point of difference. We want something as a brand differentiator." If that is what people say, I always challenge them quite hard and say, "Look, are you sure you're doing this for the right reason? Because this is a really very difficult process. This is a change program. This is not just an audit. And so, what you are facing into is a cultural and business model shift over time that is going to be a multi-year, longterm transition."

And ultimately, they will invest a lot of resource, potentially a lot of time and money achieving it, but not necessarily really manifesting the change in their business that is going to make them more resilient in the long run. I think the businesses who adopt it really successfully are those who say, "Look, we know we want to be the best version of ourselves. We know we want to be as responsible as we possibly can. We need a framework against which to measure ourselves, conduct a gap analysis, flush out our blind spots, and then go on a positive improvement journey."

For that sort of business, B Corp is perfect. It doesn't provide all the answers, but what it does do is provide the essential architecture for being the best version of a business. It's a bit like an MOT if you like. You look at the business as the vehicle, let's just get it MOT to make sure it's roadworthy. And then, there are other ways in which you can decide where the journey wants to take you, but fundamentally, is a business fit for the future is the question that the B Corp framework answers.

Mark:

Joanna Allen from healthy snack business, Graze, described her business's B Corp starting point.

Joanna Allen:

For your listeners who maybe aren't as familiar, you need 80 points to secure your accreditation as a B Corp, the kind of average company, the first time they go through that assessment score around 50. So I think it shows you actually that becoming a B Corp or being a B Corp, you are really at the kind of pinnacle of being a purpose-driven business. And then, the fact that you have to certify or re-certify every three years drives that agenda of continuous improvement. And the standards get harder, right? You can't stand still as a B Corp, but I think that's really a positive.

Mark:

Tom Bourne also described how long it may take to achieve certification.

Tom Bourne:

Difficult to answer because sort of how long is a visa string, but most of the businesses we work with from starting this project through to getting B Corp certification is unlikely to be less than 18 months, possibly two years. There's a lot to do.

And what are the obstacles? Where do people find it hard? And I think that leadership point is one of the most important. If this is delegated down and somebody says, "Right, marketing, just go and get us B Corp," but there isn't kind of really sufficient leadership buy-in, then the business will struggle. Culturally, everyone needs to be on this journey. I mean, apart from anything else, it will fail to deliver what it could do in the long run, but it will be very much more challenging unless you've got real passionate leaders championing it.

The other thing is resource. Often, businesses underestimate the extent of the changes necessary to go through this process. This is not something that you can either outsource fully or just do with one or two people on top of their day job, this needs proper time, resource and so on. So I suppose the message is this is very much a worthwhile journey, but it's not to be likely undertaken.

Mark:

The B Corp movement is not just relevant to SMEs. Graze is a Unilever subsidiary, and they went through the process after the business was acquired by Unilever in 2020. Their CEO, Joanna Allen, provided further background to their journey.

Joanna Allen:

So we had actually started the process before we were acquired, and then, anyone who's gone through B Corp accreditation will know that that is a process that takes time. It is not a fast process. And so, we completed that process post acquisition.

And it was driven by a number of really passionate individuals within the business who wanted that external recognition of what we were doing as a business anyway. And I think that's what's really powerful about B Corp. We didn't change what Graze was doing because we wanted to become a B Corp, B Corp accreditation sort of validated how we were operating as business in the first place. And I think that's really powerful, right? It's acknowledging the fact that we are out there to provide more nutritious, more tasty snacks in a world where there's a lot of crap out there, frankly. And so, that was the biggest driver of our accreditation.

But I think with any business which becomes a B Corp, they, as I said, appreciate the rigor that goes with that certification process. And you need a couple of individuals within your business, we have a number who are real passionate advocates for making that certification happen.

Mark:

Mindful Chef is also now part of the Nestle group, another global giant. When asked about their ability to influence other companies in the group, Myles Hopper sounded an optimistic note.

Myles Hopper:

Actually, what we try and do, as I said, is lead by example. And we'll, obviously, get things wrong from time to time, but just we'll hold our hands up. But really, if we can use Mindful Chef as a good example of a business that is a B Corp that puts its money into wider societal, environmental activities as well as the community projects we run each year. And if we can have some influence within the Nestle portfolio for them to go, "Do you know what? We should actually encourage more of our companies to start doing this." And you see it, we have lots of different companies there go, "Can we talk more about B Corp? What does it mean? How does is it involve? What do you do?" Et cetera, et cetera.

Mark:

Green Heart's Tom Bourne also raised the impact on business valuation.

Tom Bourne:

It's been interesting because the investor community has, obviously, as we all know, got very hot on all this. I think, increasingly, the reality is that the money is following the impact, if you like. I think brand equity value is now very intrinsically linked with responsibility. Consumers are too connected and too clued-up. They know what they're looking for. They will not forgive greenwashing. It is pretty much make or break often for brands. If they commit a massive greenwashing howler, that is going to knock a huge value off the business, so it's important stuff.

Mark:

To finish this special episode, we return to Mitch Tonks who summarizes the opportunities and challenges of B Corp status.

Mitch Tonks:

I think it forces your thinking. I think one of the things that I thought about the whole initial B Corp assessment was, finally, we're going to have to think about our business in a completely different way, and the way we do everything. And I really love that. I really, really love the way it just forces incredible change.

Because I think the other side of it for any entrepreneur is that you can do it to create personal wealth, and then, you have the problem about what about the employees? What do you do with the money you need? You've got to address that before you go through the sale so that the business just becomes better and better and better, and people have better and better lives, and the community has more and more from it. And you can make more and more change, and you can drive more and more change. And at the end of it, you can just have enough, and I think that that's fine.

So I kind of feel the thing about businesses is not just about taking care of your employees and your people, but when you exit with whatever the number is, but it's more than you need, you have that huge responsibility of what you do with that money at that point. And I think for entrepreneurs today, it's better off that that money is reinvested along the way so that you create something that is an incredible legacy with better jobs, community engagement, environmental impact that you've made in the local area that you are in. I'm really care about the local areas we're in and all of our nine sites. And so, you exit with ultimately less, but your legacy is more powerful. And you can just have enough and it's fine. And your legacy behind you is what you want to leave.

Mark:

Hopefully, this unusual episode of our Business Noodles podcast gives you a real flavor of what B Corp is and some insights into the journey to accreditation. I'd like to thank all our guests for their time and fascinating input. And thank you to our audience for listening. I hope you've enjoyed the conversation. Don't forget to subscribe to this podcast to get updates and notifications on when the latest episodes are available.