More than 600 people came together to discuss what we need to do, now and tomorrow, to create an inclusive and durable economy for all. It was incredibly heartening to see this purpose-led community of companies growing SO fast. B Corp is the only standard that accounts for a company’s entire social and environmental performance and governance. Certified B Corps join in a “race to the top”, with a promise of continuous improvement of business practices.
It was our first outing as a newly certified B Corp ourselves, and it filled us with inspiration and energy to get cracking on furthering the B Corp mission!
Five moments that were especially inspiring:
Former Google CFO Patrick Pichette’s call for businesses to think big and redefine structures:
“The market and companies essentially work with the short term in mind. And so do most of you. Even with high aspirations, we get dragged back in this year’s objectives, this quarter’s targets, my next financing… long strategic plan is now 3 years, maybe 5… and yet the forces shaping our planet need to have horizons of centuries.”If everyone invests in simple actions, and pushes for changes at the corporate level, Pichette believes, then the next generation may not have cause to criticize us as much as we now criticise the generation of the past 50 years.
- Kresse Wesling’s provocative:
Are you a creator or destructor? “If you are a designer or a creator for a brand which is exploiting the planet, you are not a creator, you are a destructor.”… a gloriously clear call to rethink our own role in protecting the planet and to encourage a circular economy.
- Companies’ ideas to improve workforce wellbeing – from “free range days” when staff are encouraged to reflect and take time to think, to eliminating top-down performance appraisals and hierarchies across the board.
- Oxford Professor Colin Mayer’s call to rethink ownership, incentives and governance structures: current legal structures in the UK and elsewhere give little incentive for businesses to look beyond short-term profit. This needs to change. Businesses (as well as the environment and employees) will benefit more if companies are incentivised to think long-term. Traditionally, shareholders’ interests have not aligned with society’s interests because shareholders have historically focused on short-term profit maximisation. Moving to employee ownership models could encourage better balance of social and corporate goals and generate benefits that go beyond profit.
- A new era with a new philosophy of business: the current shift to ethical, sustainable capitalism, or stakeholder capitalism. Economist Milton Friedman wrote in 1970 that “the sole purpose of a business is to generate profits for its shareholders”. While this philosophy shaped the business model of the past 50 years, today it is being widely challenged. At #BInspiredLondon there was consensus that Friedman’s model is no longer fit for purpose and that a company has social and environmental responsibilities that go beyond profit.Colin Mayer concluded: “Friedman was wrong. The purpose of business is to produce profitable solutions to the problems of people and planet”We wholeheartedly agree. And we’re not the only ones. ESG investment has significantly increased, and more and more companies are joining the B Corp movement. Even major business newspapers such as the Financial Times are supporting the change from shareholder primacy to stakeholder capitalism. It is the way the world is going, and we are proud to be part of a movement to create a better future for all.
Rebecca Jefferies and Jonathan Pell
Adam Smith International is a certified B Corporation®