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Business Strategy

Business As A Force For Good, Companies With Purpose

By August 2021No Comments
Business As A Force For Good, Companies With Purpose Beyond Accounting

More than ever, it seems that people want to find meaning in their work and brands want to show they have a purpose other than profit. The concept that “shareholder primacy” should be the norm is starting to be rejected by both business leaders and consumers.

Recent years have seen a rise in conscious consumerism – sometimes called ethical consumerism – which frames each buying decision as a moral choice. There are some interesting innovations in this space, such as Economic NutritionCM, developed by Shorefast in Canada to help increase buyer awareness of the economic impact of a purchase.

Economic Nutrition Label Beyond Accounting

Many of us are very familiar with labels such as Fairtrade, Rainforest Alliance, or Forest Stewardship Council (FSC) and will decide to pick such products over others when out shopping. But is there a more comprehensive way to evaluate the businesses we buy from? I want to look at two initiatives that focus on the concept of business as a force for good: B Corporations and Social Entrepreneurs Ireland.

B Corporations

“B Corp” is a certification administered by the non-profit, B Lab. B Corp certification evaluates a company’s record on workers, customers, suppliers, community, and the environment. It’s all about generating positive social as well as financial results – rather than only linking the purpose of business with maximising shareholder value, it puts an emphasis on other stakeholder values, particularly social and environmental concerns.

Certification is not a box-ticking exercise. It all starts with an Impact Assessment, which will grade the business out of a maximum score of 200 (the minimum for certification is 80 points). The questions you are asked during the Impact Assessment will depend on company size, sector, and market. The process of certification can take up to 10 months and only 1 in 3 applications result in certification. Certification fees work on a sliding scale according to turnover.

Which companies are Certified B Corporations?

Globally, there are over 4,000 companies across 77 countries in the B Corp directory, ranging in size from sole proprietor businesses to publicly traded companies. Some names you may recognise in the list are Patagonia, Ben & Jerry’s, Etsy, The Body Shop, Innocent Drinks, Allbirds, and The Guardian. Although some big household names are B Corps, the majority are classed as small businesses.

Which companies in Ireland are Certified B Corporations?

Though well-established in the USA, it’s still early days for B Corps in Ireland and I don’t meet many business owners who have heard of the organisation. At the time of writing, there are six certified B Corps here:

Should you become B Corp certified?

Obviously, it will depend on your business and the plans you have for it, but there are definite advantages to becoming a B Corp. Some owners choose it because they want a framework that will align the company with their personal values as the team grows and a wider range of stakeholders become involved in decision-making. Some may be interested in joining a global movement of like-minded leaders with a view to redefining business and economic models (this appears to be particularly true in industries with poor social and environmental records). For others, it is part of brand building and something that they hope will allow them to stand out from the crowd in a busy marketplace.

If you think B Corp certification might be for you, the first step is to complete the Impact Assessment, which will walk you through a series of questions to help you learn what it takes to build a better business and perhaps go for B Corp certification. There is also a book, The B Corp Handbook, which goes into the background, context, past successes, and certification process in plenty of detail.

B Corp values in general

I’ve seen a few companies adopt the methodology of B Corp without going through the process of getting certified. Because it is so well-thought-out, it provides a handy framework for those wishing to develop their corporate responsibility strategies. One I know has even included these elements in its Constitution (which replaced the Memorandum and Articles of Association a few years ago). Of course, without oversight, there is nothing to ensure that the organisation sticks to the commitments it has made in the company constitution.

What I like about B Corp certification is that it can measurably improve industry standards and is a great response to corporate greenwashing, allowing companies to demonstrate ‘real’ ethical practice. They are also working on an initiative called the B Economy, which goes far beyond certified companies to create an interdependent community with the common purpose of a shared and durable prosperity for all.

Social Entrepreneurs Ireland (SEI)

Social entrepreneurship is gaining a lot of traction these days. These businesses work to create social impact through their activities and may work in the non-profit, public, or private sectors. Typically, social ventures will target social, environmental, or cultural issues.

A well-established member of the social entrepreneurship community here is Social Entrepreneurs Ireland (SEI) – an organisation that works to actively support and guide social entrepreneurs. SEI aims to help social ventures at every step of their journey, with programmes anchored in three strategic pillars of development: step, leap, and soar.

Social Entrepreneurs Ireland programmes

Each programme has its own selection criteria but, as a general rule, you can apply if you are over 18, are the social entrepreneur leading the project (you do the work and make the decisions), and can commit the time required to fully participate in the programme – with a willingness to contribute in group events and a collegial attitude.

The Ideas Academy

The Ideas Academy – which helps aspiring entrepreneurs take the first steps in turning their idea into a reality – runs every year at four locations around the country. There are 60 places in total and the programme runs over 3 months, with core learning days, opportunities to network and get support from peers, plus a pot of €50,000 in seed funding.

The Impact Programme

The Impact Programme is the next stage for high-potential ventures that are ready to go national. Held yearly, this is a nine-month accelerator programme with support and funding worth over €20,000. There are just five places. The lucky awardees will receive one-to-one and group training in areas such as leadership development, communications, governance, strategic planning, fundraising, and resilience.

The Scale Partnerships programme

Having completed either of the two programmes above, entrepreneurs can apply to the Scale Partnerships programme. If successful, they will receive direct funding of €50,000 and SEI will then work with them to raise a further €200,000 over the course of the programme. Participants will also get tailored support and mentorship from a varied and experienced panel.

Social Entrepreneurs Ireland’s Impact

SEI has so far supported over 300 entrepreneurs across the country, providing more than €7 million in direct funding to projects. An estimated 2 in every 5 people in Ireland have been impacted by social entrepreneurship supported by SEI. Awardees include AgriKids, Grow It Yourself (GIY), Evocco, Mobility Mojo, My Mind, jumpAgrade, and Property Marking Ireland.

Social entrepreneurship

There is no specific legal definition of a social enterprise. Generally speaking, any business that places social impact over profit-making could be considered a social enterprise. You may already be running a social enterprise and simply never thought to identify it as such. Social enterprises tend to use sustainable, self-reliant business models and trade an innovative service or product, with the surplus being reinvested into the organisation’s social objective.

There is no prescribed organisational structure for a social enterprise, it might be a Company Limited by Guarantee (CLG) and benefit from charitable status, a Designated Activity Company (DAC), or a Limited Liability Company (LTD). The government recognises the important role of social enterprises and has policies and funds in place to support them. It also has a newsletter with updates and funding/support opportunities for those who want to get to know the community better.

The idea of using business as a force for good is gaining momentum around the world and these are just two examples of it. There are various networks of organisations, associations, and communities supporting entrepreneurs and business owners interested in alternative economic models. There may also be funding opportunities from local or national government, the European Union, and international initiatives.

We have numerous clients that are social enterprises or non-profits, so we understand how they operate as well as the specific requirements they have in terms of financial management and reporting. If you’d like to know how we can support your social enterprise, get in touch.
Rory