In recent years, Singapore has seen a rise in social enterprises, with about 220 social enterprises registered under the Social Enterprise Association. Social enterprises apply business strategies to maximise improvements to social and environmental well-being, rather than simply maximising profits for their shareholders. In short, social enterprises show that it is possible to do good while making money.
In a forum on Conscious Capitalism presented by NUS Enterprise and the Family Business Network Asia yesterday (8 December 2014), Bart Houlahan, Co-Founder of B-Lab, Law Gin Kye, Board Member of FBN Asia, and Calvin Chu, Partner of Eden Strategy Institute discussed market-based and scalable solutions to doing good well. The forum is the first of a series to equip businesses with tools to be a force for good.
The forum yesterday introduced attendees to Certified B Corps. Certified B Corporation is a certification for sustainable businesses, somewhat like fair trade certification for coffee. This is not to be confused with benefit corporations, which do not need to be certified. B-Lab is the non-profit organisation that created and awards the B Corporation certification to businesses.
Why does this matter? Numerous studies in recent years have shown that many consumers now prefer buying from companies that take into account social and environmental impacts. “Doing good” can be an effective marketing strategy that improves the image and reputation of a company. With so many companies claiming to be socially conscious, how do we choose whom to trust?
That’s where Certified B Corps comes in and differentiates the wheat from the chaff. A certified B Corp gives businesses credit for taking into account their stakeholders, highlighting them as the best in the industry that use business as a force for good.
More than that, the process ensures that B Corporations are sustainable. B Corporations have to go through an extensive process to be certified, including a rigorous impact assessment, and, critically, a legal commitment to purpose. B Corporations must rewrite their corporate documents, engaging board members and investors about to consider the interests of all stakeholders, not just shareholders. This means that sustainability is now part of the company’s DNA.
Certified B Corps are leading a global movement to redefine success in business, changing the rhetoric from being a company that is “best in the world” to “being best for the world”. At the same time, B-Lab is trying to break the misguided assumption that being more sustainable has an economic trade-off. Instead, studies have found that considering stakeholder, rather than just shareholder, interests is better for business. In the long run, considering stakeholder interests is financial risk mitigation. A study found that certified B Corps companies were 64% more likely to survive the recent financial crisis. Critically, “shared value” companies like Certified B Corps had a 25% return on equity over an 8 year period, compared to 21% for CSR companies, and 17% for traditional companies. In other words, being more sustainable brings a better return. It also results in stronger consumer loyalty and helps a company to retain talent.
Unfortunately, B Corps has not yet come to Asia. It operates primarily in North America, although B Corps Europe is piloting this year. B Corps would be ineffective in Asia without a local partner, so local organisations in Asia must make the first step to install a B Corps Asia.
Skillseed looks forward to exploring how we can become a B Corp certified company in the future!
The Project Skillseed Team