I often discuss strategy with the companies I meet, and there’s one piece of advice I am giving more and more frequently these days: consider a B Corp certification.
And I’m making this recommendation based economic more than ethical grounds. I say this because B Corp certification can help staffing immediately and – I believe -- will become more and more important in sales and funding as time goes on.
B Corp certification is the seal of approval for ethical businesses. A U.S.-based initiative, the Benefit Corporation organization requires companies to demonstrate their commitment to social good by scoring at least 80 out of 200 in four key areas: workers, governance, environment and community. It’s a rigorous process that more than a dozen Atlantic Canadian companies have now completed.
The idea is that companies that go through the process identify ways to become more ethical, and they are encouraged to improve their scores as time goes on. It also is a sign to the world that your company is ethical. It is recognized by a swath of young talent as the gold standard for the organizations they want to work for.
“Finding people with the right skills and the right cultural fit in a competitive hiring market is always a challenge,” said Jennifer Hill, CEO of Waverly, N.S.-based Dadavan. It received its B Corp designation in 2014. “Our B Corp status has attracted our last three hires to the team, and they all integrated seamlessly. The Dadavan team is now the biggest it has been since we launched in 1998.”
As well as staff, she said, the certification can help attract clients who want to buy from ethical businesses. “Our clients make decisions based on trust,” Hill said. “B Corp makes it easy to communicate our values and build honest relationships.”
Dadavan, which gathers and analyzes data on first nation education, is not alone among tech companies gaining B Corp status. Hootsuite, for example, is a B Corp. And I think more high-growth innovation companies will be joining the ranks.
For one thing, there are angels and institutions that target ethical businesses for investment. What’s more, the new federal government is interested in this segment. It has begun to let the business community know its priorities, and the list includes the environment, middle class, and native people. No surprises there. But what is eye-catching is that the list also includes ethical businesses. That creates the question: how will the government encourage ethical businesses?
My own bet is there will be funding involved, possibly something akin to Sustainable Development Technology Canada, only for ethical businesses. There are already federal institutions (like BDC) and partners (like the MaRS Discovery District) that are doing more and more work with ethical businesses. If the government does set up a program for ethical businesses, it will no doubt smile on companies that can show a long-standing adherence to the triple bottom line (profits, planet and people) by already being certified a B Corp.
I know I’m sounding cynical. The goal of the B Corp movement is not to attract funding but to benefit society and the environment. But a lot of startups have ethical missions, and it would be a good idea to formalize that mission. All businesses need solid strategies, and this is one component of strategy to consider.
“Dadavan did not become an ethical business to become B Corp certified,” said Hill. “We have always been a company that cared about people and planet. The assessment really did challenge us to be even better. Becoming B Corp certified is not easy, and it shouldn’t be. But there is learning and growth in the process.”