Wednesday, January 16, 2019

Are Benefit Corporations the New Face of Capitalism?

The B Corp may give us some indication of what the future of capitalism looks like.  An increasing number of people are disgusted with the growing inequality between rich and poor. The ubiquitous feelings of marginalization and hopelessness are a recipe for disaster. At the very least they create fertile grounds for the rise of populist leaders who propagate fear and division.

Capitalism is in a life and death struggle and in response new business models are being tested. As Lin Taylor recently wrote in a Reuters article companies are seeing the writing on the wall and many are changing their ways. 

Taylor's article, "New face of capitalism sees business put planet before profit" chronicles the ways that compassion is taking precedence over unbridled greed.

She lists examples of businesses that are actively involved in environmental and social action. One experiment that appears to be gaining ground is the B Corp. The B Corp is a transparent certification scheme that involves ambitious overhauls of a companies business model. There are currently more than 2,700 B Corps companies operating in 150 industries in 50 countries. 

"We’re trying to change the operating system of capitalism," said Kate Sandle from B Lab UK. "And the only way we’re going to change that, and create long-lasting benefit for all, is for mainstream business to be seen as part of the solution."

The time is right for such a system says Danone’s Blandine Stefani, who is overseeing the partnership with B Corp.

"The world is facing significant challenges that governments, charities, social businesses cannot solve on their own," Stefani said. "Mainstream and large businesses are an important part of today’s economy. They need to be part of the transformation to foster true systemic change." Danone is the largest multinational to join B Corp."The scale of challenges facing us across the planet means that everyone needs to play a part," said Rozanne Davis, Innocent’s head of sustainability and nutrition.

Taylor points to a wide range of businesses that are stepping up to meet these challenges. She points to fashion brands that vowed to overhaul their supply chains after the deadly Rana textile factory disaster in Bangladesh that killed more than 1000 people.  She also points to improvements we have seen at Apple in the wake of criticism. This includes a recent pledge to hire human trafficking survivors in their retail stores

Some of the world's biggest brands are also getting involved. In response to the growing awareness Coke and Kellogg have vowed to eliminate plastic waste.

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