In February, Dr. Bronner’s, the top-selling national soap brand in North America and the highest-scoring B Corp, announced they would drop their B Corp certification and not renew with B Lab. This action stems from Dr. Bronner’s belief that B Lab has failed to fulfill its promise to implement new standards to protect the certification from abuse by companies who seek to use B Corp solely for marketing purposes.
The fact is, the road to B Corp doesn’t end with certification. Rather, organizations must live and breathe this designation in every aspect of their day-to-day existence - or, as they say, they must ‘walk the walk,’ not just ‘talk to talk.’ There are important considerations to being a B corp and they include:
Organizations can and should do both - the viability of today’s businesses depends on it. The fact is, we live in a very sustainability-conscious era, with consumers increasingly factoring ESG considerations into their buying decisions.
In this context, a natural philosophical tension exists between the traditional business paradigm (emphasizing stakeholder capitalism, with companies primarily motivated by VCs, profit and commercial gain), and the new, more modern model, which focuses on good growth and the ‘triple bottom line’ of people, planet, and profit.
We believe that companies still subscribing to the former model are adhering to an archaic way of thinking about business, and it won’t be long before the cracks start to appear. The moment for sustainability is now, and organizations that strive to do good and make money at the same time are outperforming those clinging to the outdated, purely capitalistic approach. They will become magnetic, with consumers, partners and prospective employees gravitating to their products and services.
The key lies in uncovering your unique sustainable value proposition, which lies at the intersection of people, planet and profit.
Although discovering your sustainable value proposition is a rigorous process, it can often unlock a great deal of creativity, ideas, innovation and strategic partnerships.
The reality is that consumers want more trust, traceability and accountability, especially when it comes to where products come from and how they have been made (i.e. your supply chain). Biodiversity loss, pollution and deforestation along with exploitative labor; child slavery; and keeping communities below the poverty line are all still far too common ‘negative externalities.’
To date, the drive for profitability has tended to trump good intentions, and many organizations don’t change their behavior - much to their peril.
Organizations must verify the integrity of their extended supply chains in the right way.
The smaller the enterprise, the more traceable the supply chain tends to be - and fortunately, today there are a variety of software, systems and benchmarks that larger enterprises can use to gauge and validate the environmental, social and governance (ESG) performance of their tier one and even tier two suppliers.
One of these benchmarks is the EU’s Corporate Sustainability Reporting Directive (CSRD). This regulation applies to both EU and non-EU companies with significant EU business, and requires companies to assess, quantify and report on sustainability matters across their operations and value chains. Disclosures cover the entire ESG spectrum - climate, environment, human rights, labor, community and more, and reports must be published and independently assured.
Validation of your claims is possible through independent third parties and/or a review of mandatory disclosures reporting progress against your company’s benchmarks. Avoid being blinded by the thicket of ESG metrics - instead, determine what standards are tough enough and relevant to your business, and use these as your North Star. In addition to the EU’s CSRD, California’s Climate Corporate Data Accountability Act is another example of such regulation, applicable to any organization doing business in California.
Other new laws are designed to prevent cavalier and/or illegitimate use of the sustainability lexicon. The EU’s Directive on Empowering Consumers for the Green Transition (EmpCo) and the proposed Green Claims Directive mandate that any business with a marketing presence in the EU needs to assess its advertising, labeling, and public-facing statements concerning even generic ESG claims. Under these directives, terms like “sustainable” or “eco-friendly” are prohibited or require specific, third-party verification and a demonstration of excellent performance (see paragraph above).
Consumers tend to care about an organization’s holistic performance across a full range of ESG issues. So before touting your sustainability achievements, ask yourself - does the left hand know what the right is doing, and are they in sync?
All too often, statistics and pledges that seem impressive on paper fall apart upon closer scrutiny. Consider the example of Starbucks - in 2018, Starbucks made headlines by announcing the elimination of single-use plastic straws, replacing them with paper straws in a move celebrated as an environmental win. However, a few years later, it was revealed that Starbucks’ new CEO was regularly commuting to the company headquarters in Seattle via private jet. The company has marketed itself as a leader in green initiatives, yet the actions of its leadership appeared to be in direct contradiction to those values - resulting in an embarrassing black eye in the media.
Finally, make sure you don’t shift responsibility to the consumer, which is also viewed as disingenuous. In 2020, Coca-Cola came under fire for announcing that they would not abandon their single-use plastic bottles because of their popularity with customers - specifically, the fact that they reseal and are lightweight. This practice of shifting blame onto customers is not new. But in reality, if sustainable alternatives were made available, many customers would probably welcome them, even if that meant their bottles may not be quite as lightweight.
Dr. Bronner’s move has put the B Corp community under the spotlight and called into question the credibility of certification for some, but like any community, there is only strength in numbers. Given the current political climate, where division, fear-mongering and disinformation appears to be the norm, I would advocate for calling more people in rather than calling out those who aren't perfect (but are striving very hard to be) and are committed to continuous improvement. Because, that last time I looked, that’s what business was about.
Phil White is Co-Founder and Chief Strategy Officer for Grounded World – a boutique social innovation and brand activation consultancy based in Connecticut. Grounded helps brands, retailers, non-profits and startups articulate their purpose, activate their brands and accelerate their impact - often at retail.
