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Benefit Corporations Are In The Business Of Creating Social Change

11/12/2015 06:19 EST | Updated 11/12/2016 05:12 EST
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A red heart in a suit pocket representing the business card of modern Mr. Valentine.

By Aaron H. Emery & Jared Walker

Adapted from testimony offered to Canada's Parliamentary Standing Committee on International Trade in Ottawa, ON, in March 2015. 

As Canada's first gender-neutral federal cabinet settles into new offices and dives into the work before them, we wanted to take a quick minute to highlight a strong ally that too often goes overlooked in far too many cabinet portfolios (beyond trade and finance): BUSINESS. Specifically, impact-driven businesses.

The tough job you have been entrusted with moving forward is one of balancing. You have to keep us safe -- and defend civil liberties. You'll be called on to improve healthcare for an aging population -- and keep costs down. You must grow our footprint in the global economy -- and take a strong stand to fight climate change. 

 

It's not going to be easy. But the stakes are too high for you to sit back and stay stuck. 

 

We've got to re-write the rules of engagement and move beyond "the usual suspects" in our policy conversations around healthcare, childcare, literacy, obesity, climate change and every other sticky issue in which the path forward is unclear. 

While the traditional players in government institutions such as non-profit organizations and big-business interest groups clearly have a role to play in ensuring the social and environmental well-being of our society, we will also need to expect more of our small and medium business community if we are to successfully face the onslaught of complex problems that confront our society.

To overcome the problems we face, we need to better engage the innovation (*Min. Bains) and energy of the majority of our economy that is represented by for-profit businesses (*Min. Freeland & Morneau). 

 

The problem is that for the past half-century our culture has insisted that business isn't responsible for anything when it comes to collective well-being. We've declared that "success" in business is measured by money alone and that a profit and loss statement is the only regular point of accountability. But we've seen too much to continue in that line of thinking. 

We have seen a Canadian business community that is capable of so much more. 

 

We've met inspiring, impact-driven companies in Winnipeg (*Min. CarMihychuck) where Step Forward Paper is revolutionizing an industry through the development of an affordable wheat-straw based paper.

Returning MPs may wear a lapel pin they received last year in support of Lucky Iron Fish, a Guelph, Ontario-based business that is working to end iron deficiency -- a major maternal health issue in the developing world (*Min Hajdu).

In the west, you may drink Vancouver's Ethical Bean Coffee in the morning or grab lunch at the iconic Save On Meats in Vancouver's Downtown Eastside (*Min. Sajjan & Wilson-Raybould).

In The Maritimes, its hard to miss Picaroons Brewery (*Min. Leblanc, Brison and MacAulay) and their beers giving back a portion of revenue to non-profits and community organizations across New Brunswick. 

All of this is to say -- your portfolios are already being supported by impact-driven businesses in nearly every corner of the country. They're called "benefit corporations" -- or "B Corps", for short.

Even if you've never heard of the title before today, these companies have already touched your life. Beyond the big names like Ben & Jerry's ice cream, Patagonia clothing, Etsy, or Kickstarter, there are impact-driven business leaders making significant money while making an amazing difference in communities all around us.  

 

These stories are important because each of these businesses, and tens of thousands of others across Canada aren't operating in a bubble (*Min Chagger). They operate as part of a global market.

In this global market, we know that 70 million North Americans self-identify as "conscious consumers." We know that 73 per cent of consumers at large care about the company, not just the product when making a purchasing decision and that 90 per cent  say companies must not only claim a product or service is beneficial, but they need to prove it.

They so desperately need to prove it because IBM's annual trust study says that only 17 per cent of consumers trust manufacturers. All of this this is playing out in a reality where 75 per cent of the global workforce by 2025 will be comprised of millennials that report they want to work for organizations that "make a positive contribution to society."

 

The writing is on the wall and the global market is already responding, from conscious health food to sustainable junk food. From community newspapers to green energy suppliers. Dish soap, tea bags, law firms, and ad agencies. There are of course rules against weapons of mass destruction and child-labour, but otherwise you're likely to find a B Corp in nearly any business field you can think of.

Over the past few years, this "B Corp" movement has created tools for the investment community used by the likes of global institutions Prudential, J.P. Morgan, and UBS. B Corps have also forged partnerships with some of the world's leading business schools like Yale, Columbia and Northwestern because these academic trusts have seen a clear, growing trend towards impact-driven-business within their student bodies. 

We've already seen 31 U.S. jurisdictions respond to this market by passing Benefit Corporation Legislation in recent years (with unanimous votes in 12 of those states). Through this legislation, companies can make their commitment to social and environmental benefits an organizational foundation that can be better understood by employees, consumers and investors alike.

Similar legislation at the federal level in Canada could be a game-changer in the global market. As you begin to contemplate long-term policy goals, consider the implications of Canada's number one trading partner soon having 40-45 jurisdictions officially recognizing the potential in these visionary business leaders. Making Canada the first country on the planet to pass federal Benefit Corporation Legislation would be a powerful sign of support for and stimulant of impact-driven business in Canada. 

 

This is one of those rare times where the balancing act is pretty easy. B Corps provide you with both economic and social solutions in one package. Passing this sort of legislation is both a solid, progressive step forward and a commitment to non-partisan problem solving. Every Conservative should be able to get behind this as a sign of support for small business and economic growth. Every New Democrat should love the pursuit of solutions to the social and environmental ills our society faces. And for Liberals, this is just a logical step forward in the evolution of our economy.  

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Aaron H. Emery is a corporate responsibility strategist, start-up advisor, and Canada's biggest champion of the B Corp Movement. Find him @aaremery

Jared A. Walker is a storyteller and strategist for social change. His work has included senior positions with Students for Obama, SocialFinance.ca and some leading Canadian non-profits. Find him @JAWalker

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Adapted from testimony offered to Canada's Parliamentary Standing Committee on International Trade in Ottawa, ON, in March, 2015. Full text of that testimony can be found at http://socialfinance.ca/2015/03/23/b-corp-canada-house-of-commons-committee-on-international-trade/

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