Claim: The B Corp certification relies on self-reporting

Reality: The B Corp process involves self-reporting, but it doesn’t rely on it exclusively. The process starts with self-reporting on the B Impact Assessment (BIA). According to a B Lab staffer, about 45% of businesses that reach the required 80 points fail to advance to the audit stage due to their inability to substantiate their BIA responses.

Claim: B Corp certification masks harmful practices

Reality: Several measures are in place to prevent masking harmful practices. These measures include: 

1. The BIA adjusts questions based on a business’s most likely material impact (positive or negative). 
2. B Corps must recertify every three years, or if there’s a change in ownership or an initial public offering (IPO).
3. B Corps have access to tools and partners that help them measure and improve their impact. 
4. A dedicated B Corp community fosters accountability and support. (Remember, it was the community’s response to Nespresso’s certification that led to B Lab assessing and ultimately changing their scoring system and certification process.)

Claim: B Lab has a low bar for certification

Reality: Legal structure requirements make becoming a Certified B Corp a serious commitment to maintaining a high bar for positive impact. For example, companies designated as S or C corporations must change their legal structure to benefit corporation (if recognized in their state), which are required to publish an annual benefit report. This link between the benefit corporation and B Corp certification act as a checks-and-balances system, ensuring the integrity of the positive impact movement. 

(37 states across the U.S. have passed benefit corporation legislation. Here is a complete list with links to their House and Senate bills.)

Claim: The increasing number of Certified B Corps has diluted the value of the certification

Reality: This is like saying that if every building in a major city were LEED certified, their environmental value would decrease. In fact, the opposite is true. The more LEED certified buildings, the greater the collective value they create for the environment. The same is true of Certified B Corps. After all, a rising tide raises all ships.

Claim: Nespresso’s certification undermines the B Corp designation

Reality: Nespresso’s certification exposed weaknesses in the B Corp certification process. In response, B Lab conducted a thorough review of its standards and processes to ensure the continued relevance and value of the certification. Nespresso’s certification also brought labor practice violations in its supply chain to light, compelling the company to recognize and begin repairing the harm.

Claim: B Lab is heavily influenced by corporate interests

Reality: Large corporations have sought to collaborate with B Lab to find ways for larger-scale operations and supply chains to have a net-zero or net-positive impact. This doesn’t mean lowering the standards for becoming a Certified B Corp, but rather seeks to expand the reach of positive impact. 

B Lab remains a non-profit organization primarily funded by revenue-based tiers for annual certification dues. These funds support research, assessment development, and other essential operations. B Lab also has an independent Standards Advisory Council. 

Setting the New Normal

Having delved into recent criticisms, it’s clear that the B Corp certification remains a serious commitment to making a positive impact on society and the environment. The growing number of companies actively embracing positive impact initiatives (whether through B Corp certification or otherwise) includes corporate giants like Unilever. This underscores the recognition of the inherent value in aligning operations with impact. The goal is to make benefit practices the new norm, not the exception. 

The post The Truths Behind B Corp Criticisms (and why now is not the time to walk away) appeared first on New Commodity.

If you’ve ever been on a wilderness trip, you know there are points when your guide is definitely not your favorite person. Your guide asked you to paddle harder in choppy waters to get to safety in a storm. Push through exhaustion to reach a campsite. But just the same, paddling harder and pushing through left you feeling happy, proud, stronger.

ESG is the guide that’s getting us to a better future with stronger businesses. But the anti-ESG movement is sowing doubt. So grab your coffee or a cocktail and let’s bust some anti-ESG myths, shall we?

1. ESG & Extractive Industries: Preparing for the Future

You might have heard that ESG is out to kill industries like oil and gas. But here’s the deal: ESG isn’t here to kill these industries; it’s here to help them thrive in the renewable energy era. Instead of being a roadblock, ESG is creating the path for them to participate in the opportunities of the future.

Consider the oil and gas companies investing in renewables R&D and building the capabilities to compete and thrive in the renewables economy. They’re not just being environmentally responsible in adopting these ESG practices; they’re securing their spot in the evolving energy landscape. By embracing change, these companies are safeguarding jobs and creating new ones in new sectors.

ESG isn’t the problem for these industries – it’s the solution for their more sustainable and secure future.

2. Not Politics, Just Progress

I’m not much of a conspiracy theorist, so let’s tackle the idea that ESG is secretly plotting to undermine conservative policies and industries. Nope. ESG is simply a way to raise the bar for all businesses when it comes to healing the planet we all live on, uplifting the communities that make up our stakeholders, and managing our businesses well to reduce legal and ethical risks. It’s about doing the right thing, regardless of your political stripes.

ESG doesn’t have a political agenda. It’s simply about good business and a sustainable, secure future. When companies follow ESG standards, they’re showing their commitment to ethical and sustainable practices. It’s not about politics, it’s about building a world where everyone can thrive. It’s our ally in creating a better future, which (I would imagine) is a pretty bipartisan issue, don’t you think?

3. Boosting Fairness & Ethics

Some critics say ESG standards mess with state codes and fair labor practices. Nope. Remember, the G in ESG is for Governance. ESG is inherently pro-fairness and ethical behavior. It encourages companies to treat their employees, customers, and communities with respect. Transparency and accountability reduce risk for businesses and ensure sustained positive outcomes, not just a great next quarter at any cost to the company’s future (which is arguably the anti-ESG approach).

Model legislation is popping up around the country aimed at making ESG-based operations more difficult. It’s critical, though, that all businesses have the freedom to operate in ways that benefit their bottom line and create significant social and environmental value. Of course, that also means businesses should have the freedom to choose the “good next quarter at any cost” approach if they wish. After all, having that choice is a testament to the measured freedom and flexibility American businesses are supposed to enjoy.

But history has shown that businesses prioritizing quick wins over long-term sustainability find themselves facing detrimental challenges sooner rather than later. On the other hand, history has also shown that embracing ESG-based operating models opens doors to increased returns and long-term success. Anti-ESG policies are only convenient for those looking for short-term and personal gains.

4. It’s Not Woke, It’s Just Having Values

Along the same lines as fairness and ethics, ESG is all about diversity, equity, inclusion, fair wages, and safe workplaces. These are values that should make us all smile, not cause political angst. When companies participate in ESG, they’re less likely to run into trouble with labor disputes and ethical blunders. Put simply, they’re being responsible citizens that value people, the planet, and profit in equal measure.

Those first three values–collectively DEI–are triggering for those they scare. But there’s a price to being afraid to uplift others. As a DEI expert put it to me in a recent conversation, when companies implement effective DEI practices, they’re building a bigger funnel for talent, customers, and investors than their competitors who don’t. Not to mention, of course, the moral, ethical, and simply human reasons to implement DEI practices.

The point is this – having values that serve and uplift historically marginalized people isn’t “woke.” It’s just being good to others and uplifting humanity collectively. Which, it turns out, is pretty good for business.

The Hero We Need

The anti-ESG movement has it’s wires crossed. Its roots are in short-term political and financial interests for individuals. ESG’s roots, on the other hand, are in long-term economic, social, and environmental interests of the masses. ESG isn’t the villain, it’s the hero we need. It’s a positive force pushing companies toward sustainability, scaling their benefit to society, the environment, and their own bottom line. It’s that trip guide getting us safely to our next beautiful campsite.

Choosing ESG isn’t just the right thing to do – it’s a smart business move that sets us on a path to a brighter, more sustainable future. So let’s get on board with ESG and work together to make the world a better place for everyone, especially our future generations.

The post ESG: Paving the Way to Better in the Face of Anti-ESG appeared first on New Commodity.

What’s wrong with CSR?

Since the 1970s and ’80s, CSR has been a helpful step in recognizing the value of ethical business practices. But it may be sending companies down the wrong path. CSR’s emphasis on “doing good” has primarily led to companies participating in charity matching and volunteer activities. Then, there is ESG (environmental, social, and governance). ESG’s emphasis on “being good” leads companies to healthier operations that benefit the business and society.

Done right, the difference between CSR and ESG is embedded purpose and positive impact. And increasing the number of impact-driven companies brings far greater value to society and the business than CSR programs alone.

Why ESG?

Put simply, embedded purpose and positive ESG impact means that a business’s success is good for society. It means employment practices, supply chain relationships, environmental impact, and customer care practices are aligned with purpose and values. On the other hand, CSR programs are easy to implement. They make employees and leaders feel good and help local non-profits. So why take on being purpose-driven or impact-driven? Because:

• Consumers and employees are demanding that companies operate ethically and sustainably, and that they prioritize ESG goals
• Soon, laws and regulations will be in favor of ESG standards, not short-term profit
• Purpose-driven and impact-driven businesses are far less likely to face PR and legal crises
• And, they position themselves more clearly and authentically in the market, making customers and employees loyal brand champions

How to move to ESG

New Commodity is on a mission to make sure every business is purpose- and impact-driven. So we want to share a few ways to make it easier and more intentional. Here are four steps for getting started on your ESG and positive impact journey.

1. Articulate

Embedding positive ESG impact starts with clearly stating the company’s purpose in a way that makes sense of its products, services, and activities. So, to get started, consider your company’s values and where the company has the most opportunity for positive impact and ESG standards. Be sure to include a diverse group of stakeholders in this process.

2. Assess

Conduct a materiality assessment to make sure your company’s practices align with its purpose and impact goals. Review practices with a critical eye toward sustainability, diversity, inclusion, and community & stakeholder support.

3. Prioritize

Taking on too much can burn out your people and your resources, leaving the company disheartened by the effort. Instead, prioritize areas where you can have quick wins. At the same time, build an action plan for one or two long-term impact goals. (Be sure to include metrics and resource planning.)

4. Balance

Balance the needs of as many stakeholders as you can. For instance, there are likely impact improvements that would both increase profit margins and reduce your carbon footprint. Or you may find improvements that would reduce operating costs and benefit your supply chain.

Reaping the benefits of ESG

Setting ESG goals and raising its ESG standards increases your company’s value. First, aligning operations to higher ESG standards often results in OPEX savings. While there may be an up-front cost to solutions, many will see a significant ROI. For example, renewable energy results in lower energy bills and tax incentives. Companies with operations well-aligned to higher ESG standards also gain more trust from governments and banking institutions.

Beyond the financial value of ESG standards, there are brand value benefits. In the short-term, transparently raising ESG standards generates interest and excitement in your company. And in the long-run, successfully meeting higher ESG standards creates loyal brand champions among your employees, customers, and suppliers.

But most important of all is the positive impact your business will contribute to society and the planet.

Let’s get started.

The post From “Doing Good” to “Being Good”: Moving Beyond CSR appeared first on New Commodity.

Identifying Your Business’s Purpose Archetype

Your business’s core values combined with who or what it exists to serve determines its Purpose Archetype. So to identify your business’s Purpose Archetype, start by considering two dimensions of your business: (1) core values and (2) products or services. For instance, if personal growth is a core value and the business sells fitness products, it may be a Trainer company. However, if your business sells fitness products and equitable access to fitness is a core value, it may be an Advocate company.

How Your Purpose Archetype Works

eliminates the noise

Your business’s Purpose Archetype helps in a few key ways. First, it narrows the focus and leads the business to its purpose statement. By using core values and products or services, you’ll eliminate the noise that distracts and overwhelms leadership when it comes to identifying purpose.

Take the story of a small restaurant group we worked with recently. The noise around the leadership told them that their purpose should be sustainable ingredient sourcing. They operated from that purpose for a few years, but it just wasn’t landing. Instead, a look at their values, products, and service helped them identify as a Nurturer company. From that Purpose Archetype, the restaurant group articulated a purpose statement that helped them focus and build on what makes them stand out in their market. Sustainable ingredient sourcing is an important part of the company’s business model, by the way. But their purpose is to develop the next generation of great leaders in the workforce.

connects with stakeholders

Traditional archetypes make it easy for us to understand and connect with a character, politician, or TV personality. So Purpose Archetypes make it easy for your stakeholders to quickly understand and connect with your business. When stakeholders easily understand and connect with your business, they’re more likely to commit to your business for the long-term.

The restaurant group’s Purpose Archetype helped them connect with their stakeholders by showing them great leadership in every interaction with the business. Customers experience their purpose of developing great leaders when they interact with kind and engaging staff members. They notice attention to quality when they taste the food and enjoy healthy ingredients. Likewise, suppliers experience kind and engaging buyers who are focused on building long-term relationships. And of course, employees are working in an environment of skill building and growth.

improves operations

The difference between a business that has a purpose statement and one that is purpose-driven is aligned operations. Of course purpose-driven businesses need to have a positive impact externally. But they also need to thrive as a business. This alignment is what drives the business outcomes and value that stem from purpose.

In a different example, consider an events company we worked with. Experiencing a leadership transition and changes forced by COVID, they needed to streamline and improve operations. Identifying as a Builder company, they were able to focus their operating resources on what they do best: creating space for entrepreneurs to grow. They also saw potential for expanded service offerings when they considered what it meant to be a Builder company.

Going Beyond the Purpose Statement

For businesses that strive to be truly purpose-driven, the purpose statement is only the beginning. Understanding the archetype behind your business’s purpose statement helps bring it to life in operations. Or, if your business is struggling to find clarity of purpose, discovering its Purpose Archetype will help generate an authentic and compelling purpose statement. Either way, it’s putting your purpose to work that counts.

The post Leading Your Business to Purpose-Driven: Start With Its Purpose Archetype appeared first on New Commodity.

There is an emerging business model shaping the next economy. You may hear it called purpose-driven, conscious capitalism, conscious brands, stakeholder balance, triple bottom line, or for-benefit business. Whichever name you like, one of the many factors contributing to its shaping the next economy is the largest transfer of wealth in human history taking place from Baby Boomers to Millennials. And Millennials are going to spend that wealth (along with their time and talent) on businesses embedding positive impact.

Many companies are pursuing this business model and seeing real and lasting results. Others are riding its coattails by “greenwashing;” marketing themselves as if they generate positive impact while operating in ways that do not. So how do you make the investment, generate the best impact, and make sure your stakeholders know it’s authentic?

One of the most effective ways is to become a Certified B Corp (B Corp). It sets your business apart and lets consumers know you are truly a conscious brand generating positive impact. While you don’t have to be a B Corp to be a driver in conscious capitalism, there are some advantages: 

1. Certification standards inherently reduce financial risk and improve long-term profitability
2. Greater survival rates during economic downturns
3. Stand out among competitors who may greenwash
4. Join a network of like-minded businesses
5. Build your business’s foundation for success in the next economy

The What

Certified B Corps function as a network of companies driving the next economy forward by generating positive impact. They are for-profit businesses certified by the nonprofit organization B Lab for taking measures with customers, employees, governance, the community, and the environment to generate positive impact. Certified B Corps can be LLCs, LLPs, S Corps, C Corps, or any other form of business to qualify. However, companies in states with benefit corporation legislation must file as a benefit corporation within a certain time period of becoming certified (look up your state here).

The How

Start with the B Impact Assessment (BIA), which assesses your business in five categories: workers, community, environment, governance, and customers. Your business must score at least an 80 out of 200 possible points to become certified. 

While this may sound easy, many companies do not earn 80 points on their first attempt. The BIA is designed to ensure high standards and maintain the certification’s credibility. Be prepared to take your first pass at the BIA as an initial assessment to understand where you might improve. For instance, even just documenting informal, undocumented positive practices could help increase your score. 

Once you complete the BIA with a score of 80 or higher, B Lab will make documentation requests and may perform an audit of your company. For those that don’t score 80 right away, B Lab offers a simple planning tool for setting and making progress toward improvement goals. 

A few tips to help you succeed on the BIA:

WRITE IT DOWN.

Many businesses committed to positive social or environmental impact have informal, undocumented practices that support their commitment. The more you have in writing, the better prepared you’ll be. (For instance, a mission or purpose statement, certain employee benefits, hiring practices that support improved DEI, etc.)

Establish a team.

The BIA is a rigorous policy, practice, and operations tool that can be used for the continuous improvement of your organization. There will be information to gather, unwritten practices to be captured in writing, and questions about the business to be answered. Establishing a team internally and/or hiring a Certified B Corp consultant will help you move through the process smoother and faster.

Prepare for a process, not a test.

Your first pass at the B Impact Assessment will likely provide your baseline; a starting point to build on. Stay in the process and the reward of becoming a Certified B Corp will be immense and long-lasting. Value will span facets of your business from revenue and profit to talent and employee engagement; from customer loyalty to a healthier stakeholder system to operate in. 

Ready to explore becoming a Certified B Corp?

New Commodity can help your team complete the BIA, gather information, and get all the “unofficial” positive practices you’re already following into writing. Contact us for more information or to schedule a consultation.

If the B Corp path isn’t right for your business today, there are other ways to embed positive impact into your operating model. Join the New Commodity community for more on building your business’s foundation for the next economy.

The post The Why, What, & How of Becoming a Certified B Corp appeared first on New Commodity.