Managing Your Business
Meet the Businesses Turning Karma Into Cash
This article originally appeared on Vox.com.
Shoppers typically make purchasing decisions based on the quality of a brand's product and its price. But a third factor—a brand's "purpose"—has emerged as equally influential. Roughly 84 percent of consumers say they try to consider a company's social and environmental pledges before they buy or shop, according to a 2015 Cone Communications study.
"Consumers are more educated about the marketplace," says Kate Zabriskie, consultant and founder of Business Training Works, Inc. "And the brands they choose are often a reflection of who they are, and they vote with their wallets. Businesses are recognizing this."
That's why many businesses have adopted B Corp status, a designation that holds them accountable to standards beyond just profit. By wedding conscience to corporate, B Corps are required to re-cast their mission statements and corporate goals from being "best in the world" to "best for the world."
"Companies that certify as B Corps have a mission to describe what their public benefit is," says Katie Holcomb, the communications director for B Lab, the organizing body for B Corp. "And that can be embedded in their articles of incorporation or in a deeper way."
B Corp Beginnings
The B Corp idea was hatched in 2007 by a trio of entrepreneurs who saw many owners using their businesses to make a positive impact in the world—alleviating hunger, reducing poverty, protecting the environment, and so on. To formalize this movement, they launched B Lab, created a certification, and set benchmarks against which these companies could measure their efforts. Currently, more than 1,500 businesses have certified, and an additional 30,000 have tested the waters by taking the B Impact Assessment test, a sort of gateway to becoming a mission-driven company.
Twenty years ago Tim Frick decided he wanted to make a difference. Dissatisfied by what he saw at his corporate job—poor treatment of employees and corporate decisions that had negative impact on the environment—he decided to quit and open Mightybytes, a digital creative shop.
"I wanted to find a better way to do business, to be part of the solution rather than the problem," he says. "I wanted to work toward building a more sustainable future for people and planet but also be profitable."
He worked with mission-driven institutions, museums, non-profits and civic organizations. In 2011, after learning about B Corp, he decided to become certified, a simple process that requires a business to incorporate new language into its article of organization. Now, as a B Corp, before Frick agrees to take on a corporate client, he vets them.
"We research how they operate before making decisions to work with them," he says. "Last year, for example, we turned down a fracking company who 'loved us because we were green.'"
Goldstein Hall, a New York City-based law firm, certified as a B Corp three years ago. Their mission includes providing financial and personal support to key community organizations and nonprofits that further affordable housing, arts, education and social services.
"B Corp enabled us to execute our plan to communicate who we are and to steer value based growth," says Jason Labate, an associate at the firm.
Besides allowing these companies to connect with customers on a deeper level, B Corp status yields other benefits. Regional B Corp networking groups have sprouted, offering members a forum to share best practices. Also, many B Corps have found that their values and missions align with those of a majority of the workforce—millennials.
"An engaged workforce has always been critical to a company's success," says Susan Trivers, founder of The Revenue Driver consulting group. “The substance of that engagement is a bit different for millennials, so communication that reflects their passions, such as the environment or equality of opportunity, is that much more important in recruiting and retaining them."
Jon Blumenauer, CEO of The Joinery, a furniture manufacturer, displays its B Corp badge on its website and posts its job openings to the B Corp job board.
"One of the biggest surprises about our B Corp status is how effective it is as a recruiting tool," he says. “We have done a lot of hiring over the past year, and candidates tell us they're drawn to us because we are a B Corp. This has provided us with better candidates and made our hiring process more effective and efficient. The end result is that we have a stronger team."
Doing Well… By Doing Good
How can a business begin to think about moving towards being more mission-driven? For starters, they can go online and do the short version of the B Impact Assessment test, and get ideas of ways they can make a difference. Many companies looking to dip their toes into adopting a larger purpose often start by choosing a cause and donating a share of profits, or by enabling employees to volunteer for charity on company time.
"To me, the growth of the B Corp movement is a sign that there's hope for business to be used as a force for good on a much larger scale," says Frick. "And as awareness of B Corp increases, consumers will then start making more educated choices about the businesses they are willing to support. I think it'll create a domino effect throughout business and society."
Brian O'Connor is an editor and writer in New York who writes about business and brands.