4 ways to build businesses that put people and planet over profits | World Economic Forum

By Matt Dallisson, 16/12/2019

For people working in social enterprise and impact investing, this is not news, although it is very much welcome. However, the bigger and still-outstanding question remains: will this be merely a press release that achieves little beyond a season’s-worth of good PR, or will it lead to tangible, substantive change?

On the one hand, there are myriad ways corporations can tweak around the edges to improve their workforce policies, environmental policies and so forth. On the other hand, despite being well-intentioned, such efforts can – and all too often are – wiped out by a new CEO or a disappointing financial quarter. What about deeper, more permanent and lasting change at the ‘company DNA’ level?

While B Corps are required to meet standards and maintain their certified status, benefit corporations are both legally authorized to lock in positive social, environmental and community impact (in addition to profit) in their constitutional and governance documents, and they are legally protected to make decisions and investments in furtherance of these non-financial goals. In other words, benefit corporations’ commitments to more responsible, inclusive and sustainable business cannot be changed by a new owner or new CEO deciding to change course. Etsy’s B Corp decertification would not have been able to happen had Etsy been a benefit corporation.

Can a company be both a B Corp and a benefit corporation? Yes. You undertake both processes: you go through the process of B Corp certification and the legal and governance requirements to become a benefit corporation.

Rather than being owned by investors or shareholders who may have no direct connection to a company, cooperatives are owned by their respective communities: the people who build, grow and maintain the organization. Cooperative members share in the upsides, downsides, governance and long-term wellbeing of the cooperative, hence the name.

Organized cooperatives date back to the 18th century and exist in a variety of sectors, from agriculture to retail to housing. (Indeed, agricultural co-ops and housing co-ops can be found in almost every corner of the world.) They can be quite large, such as Mondragon in Spain (81,000 employees), though most are relatively small, in alignment with their local and community roots.

The two primary types of cooperatives are worker-owned and member-owned. Worker-owned cooperatives are owned by the employees. Member-owned cooperatives are owned by members, who have less vested interest than employees. REI (retail) and Stocksy (photography) are member-owned co-ops. Lifetime membership at REI costs $20, which entitles members to an annual dividend based on their purchases at the company. Stocksy members are photographers who contribute images.

Unlike B Corps, benefit corporations and platform cooperatives, zebra companies do not have a defined structure or set of standards they must meet. In fact, zebra company ranks easily could – and do – include all of these variations. As Zebras Unite co-founder Mara Zepeda has said, “The business model is the message. We show our values in how we operate, and we can do that intentionally.”

B Corps, benefit corporations, platform cooperatives and Zebra companies address the issue of building business for good in authentic and complementary ways. They go beyond glowing press releases and ‘corporate social responsibility’ measures (CSR being an often-mocked term today) to reflect a clear commitment to all of their stakeholders and the communities they serve.

Of course more can and should be done to nudge business in more responsible directions, not the least of which is public policy reform. Tax policy, environmental and investment regulations, or even the much bolder step of rethinking corporate ‘citizenship’ altogether – these are all ripe for change.

This content was originally published here.