Purpose and Profit

Purpose and Profit

At our event next week, Berwyn'due south Jay Coen Gilbert, who helped found the international B Corp motion, will testify why doing skillful is also good for business

Jul. 05, 2018

Dorsum in the early on aughts, Jay Coen Gilbert was one of the cofounders of AND1, the in-your-confront, groundbreaking basketball clothes company that, at its pinnacle, posted revenues of $250 million and, for a time, positioned itself every bit the upstart alternative to Nike. When he and his partners sold the visitor in 2005, Gilbert, ever-inquisitive, went on a pilgrimage to find what's next. And he settled on something rather audacious: Zilch less than remaking the very values that inform our economy. You know, something achievable .

Now, more than than a decade afterward, he is a breathless evangelist for the power of business to do good. B Lab, the nonprofit Coen Gilbert co-founded, has jumpstarted the international B Corp movement. B Lab's insignia—the B stands for Benefit—confers a type of Good Housekeeping Seal of Blessing when information technology comes to social responsibility for its more than 2,300 member companies in 50 countries, including well-known brands such as Patagonia, Ben & Jerry's and Kickstarter. More recently, women'due south able-bodied clothes retail chain Athleta has signed on, as has Participant Media, the picture production company founded by EBay cofounder Jeff Skoll to brand movies that accelerate social change. (Among Participant'due south honour-winning efforts was Al Gore's An Inconvenient Truth.)

Moreover, B Lab does more than just measure companies' social impact performance. It helped create a new type of company, the B Corp, which extends members' fiduciary responsibility beyond simply shareholders, to stakeholders such as employees, the environment and the surrounding community.

As outlined in a Harvard Business Review article headlined "Why Companies Are Condign B Corporations", the rise of B Corp Nation represents nothing less than a radical reimagining of the values that inform capitalism. B Corp firms, the study's authors write, "believe 'the major crises of our time are a result of the way we comport business organisation,' and they become a B Corporation to 'join the movement of creating a new economy with a new set of rules' and 'redefine the way people perceive success in the business earth.'"

In other words, the rise of the triple lesser line—people, profit, and planet—is more than a slogan. Information technology'southward a manner to bring purpose to the business of business organization, and proof that egalitarian values and capitalism need not be mutually exclusive, a much-needed prescription for economical reform at a time when the political blame game would have united states believe that our choices for economical growth are solely betwixt socialism and Ayn Rand-fueled corporate greed. Now that innovations like B Corps, impact investing, and social impact bonds are ascendant in the zeitgeist, the notion that business can be a force for practiced—"Conscious Commercialism"—is fast becoming a settled consequence. It'south something Coen Gilbert saw over a decade ago, when he offset started talking about "solutions commercialism."

The rise of the triple lesser line—people, profit, and planet—is more than than a slogan. It's a fashion to bring purpose to the business of concern.

"If we just wait for authorities to solve our problems, or hope that charities and NGOs will fill up the gaps, we're delusional," Coen Gilbert, a pragmatic progressive, once told me. "Government and nonprofits are necessary but insufficient to the task. The action is in the marketplace, and the question I focused on was, 'Tin can y'all use market forces for a higher purpose across just amassing personal wealth?'"

When Gilbert and his higher-buddy partners, Bart Houlahan (the former president of AND1) and Andrew Kassoy first created B Lab, they realized there was no credible fashion for consumers to gauge companies' claims to be socially responsible. They came up with an affect assessment exam companies can take that covers roughly 200 factors, ranging from how a company treats its employees to how green its buildings are to how often it buys local products and supplies. That data separates companies that really are doing practiced from those that simply practice good marketing.

Just B Lab didn't stop with operation standards. They took the mission into the legal realm, considering they were quick to learn that systemic reasons—codified into the law—lay behind our economic system's "greed is good" corporate ethos. Coen Gilbert attended an bookish gathering and heard an author concord along on the deleterious effects of "shareholder primacy": If a company'south sole fiduciary relationship is to its shareholders, if zero else matters but the return on their investment, y'all get what we've gotten—companies that move factories overseas to increase profits and founding entrepreneurs who live in fear of shareholder revolt.

B Corps, it turns out, were 63 percent more than likely to survive the Neat Recession and a surveys show that well-nigh viii of 10 millennial consumers want to exercise business organisation with companies that share their values.

So B Lab helped create a new legal category of company—a B corporation—that expands the fiduciary responsibility to stakeholders such as employees, neighbors, and the environment.

"Until B Corps, corporate law said you are free to recollect of any manner that's legal to make as much money as possible, but you have to justify everything to that one single terminate—shareholder return," Coen Gilbert says. "That's pretty restrictive. B Corp allows you to be innovative around not just the means by which you seek your ends, but besides virtually the ends that y'all seek. If you believe in costless enterprise, you lot should be able to choose the purpose for which yous're freakin' busting your butt. For a lot of united states, that's our employees and our neighbors, as well as our investors."

Why have B Corps taken off? In part, because Coen Gilbert and his partners are capitalists themselves; they've built and sold companies, so when they approach entrepreneurs about, as Gilbert says, "widening the aperture of their lens," they have more credibility than an anti-concern activist.

They also have a compelling lesser-line argument to brand: B Corps, information technology turns out, were 63 percentage more likely to survive the Great Recession and surveys show that about 8 of 10 millennial consumers desire to do business with companies that share their values. Business organization leaders who may not agree with Coen Gilbert's political preferences nevertheless have become convinced that it's in their bottom-line self interest to exist a good corporate citizens.

"Information technology'due south a settled issue already," Center Metropolis philanthropist and venture capitalist Richard Vague one time told me. "Almost every start-upwardly that comes to see me founded by twentysomethings is already committed to existence a B Corp. They're almost like, Why wouldn't we exist?"

No wonder that none other than former Secretary of State Madeline Albright has proclaimed that "the B Corp movement shows us that business tin be an agent of modify," and Esquire magazine predicted that "B Corps might turn out to be like civil rights for blacks or voting rights for women, eccentric unpopular ideas that took hold and inverse the world."

Among B Lab's latest efforts are its almanac Best For The Earth Honorees —championing those companies that are leading the mode in balancing doing well with doing good, which includes 17 local award-winners—and its Inclusive Economic system Claiming, which has led participating companies to increase the diverseness and inclusion of their workforces and supply chains.

Next Wed nighttime, at our "Denizen Speaks: Business For Practiced" effect, Coen Gilbert will talk well-nigh these initiatives and his vision for, as he puts it, "a more inclusive, resilient, and sustainable" economy with three other similarly audacious entrepreneurs: Lisa Skeete Tatum of landit.com , Todd Carmichael of La Colombe, and Emmet Dennis of Sundial Brands. They'll compare notes on the opportunities and challenges in building purpose-driven workplaces. They won't look like revolutionaries, only brand no fault: All are radically rethinking just what it ways to be in business concern in America, 2018.

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Source: https://thephiladelphiacitizen.org/purpose-and-profit/

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