Inspire the world to change the world. Being in the world. This is the principle that drives Pedro Tarak, an Argentinian entrepreneur, expert on the economy and environmental issues, and co-founder of Sistema B. Sistema B is a network stretching across the whole of Latin America. It brings together innovators, companies, legal experts, economists, managers and opinion leaders and in a few short years, it has managed to create a very real movement around benefit corporations. But that’s not all.
“What we aspire to and hope for,” explains Tarak, founder of Empredia, the first B-Corp in Argentina, “is a paradigm shift in the economy.” To bring about this shift “we have to be in the market and give tangible proof that the market is part of the solution, rather than the problem.”
This pandemic has changed many things, even the way we see things. Once again, the economic paradigm is a crucial factor. Can we really change it?
Let’s start with an observation: the paradigm that we are part of is a model that has been around for several hundred years and its sole aim is profit. Profit for shareholders. It’s not about creating value for the community and – this is and will be the real turning point – not even for companies themselves.
Companies need to be aware that they generate value and that they have a great deal of responsibility
Companies are agents and important players in the creation of value. But only when we fully define all the elements of value: economic value, social value, ecological and environmental value. A company does not create value just for itself, it does so for its network of suppliers, clients, investors and consumers.
Is this true in every case?
When companies are set up in such a way that they are fully aware of their role as generators of value and that their responsibility extends well beyond the boundaries of their HQ, then things will change. Because this changes the way they operate on the market with regard to the community where they operate, where they interact and where they do business.
We often criticize markets as being a source of inequalities, imbalances, mismatches and as a place for pure profit-making. You propose a different vision …
It’s not different, it adheres to a different paradigm. A paradigm which is not exclusively based on profit to the detriment of others, because this model is unsustainable, and this lack of sustainability is obvious to everyone. Companies and even major investors are realizing that sustainability and social responsibility bring rewards – on the current market. The market is still a place where it is possible to respond to a need. I mean a real, tangible need rather than an artificial one. This is the real issue: learning to listen and respond to specific needs.
A market is still a place where it is possible to respond to a need. I mean a real, tangible need rather than an artificial one
So, the market becomes a place for mutually beneficial transactions and listening?
Socrates didn’t hide in the Acropolis, he went out in the marketplace. With two main centres in the ancient city, the philosopher chose the marketplace because he knew he would discover needs, that those needs would be heard, and there was honest interaction with the community. Companies that adhere to the old paradigm prefer to keep their feet in the marketplace but their heads in the Acropolis. The marketplace requires a full commitment, in other words, a paradigm shift. It’s not about regulating the market – its very framework has to change to turn it into a place where business is a force for the common good.
This paradigm shift has to be led by agents of change. Can B-Corps be those agents and make this shift a reality?
B-Corps are driving towards this new system that I have called Sistema B. When the purpose of a company – which is a community within a community – is aligned with the concept that it is important to generate value, and as a result profit, but not profit to the detriment of value, then things will begin to change. First, they will change within the company itself. But then things will also start to change on markets, because a system that creates trust will gain trust and as a result it will attract investment and make a profit. Of course, it is important that these agents build relationships between each other and within their communities, becoming poles of attraction and building social bonds. That is why sustainability is so key to bringing about this change. Sustainability helps us to understand that there is a link between the different players and the whole, and that all our actions have consequences. These consequences can have a positive or negative impact on others or on the places and communities we live in.
The term sustainability is often a misused concept but is it still necessary nonetheless?
Sustainability means understanding that each of our actions has a social impact on others and on the environment. If we understand this simple law, then we will begin to behave differently. Change will happen when it becomes clear that each of our actions needs a starting point and a way to generate value. Companies that understand this will be winning companies: they will generate value, they will create jobs, they will be integrated into communities and mitigate conflict, they will be innovators…
B-Corps are agents of change: by creating trust they will gain trust. Thanks to these companies it will be possible to bring about a paradigm shift in the economy
Can they still be profitable?
Of course, but with different goals and values: their impact on society and the environment will be a positive one. This greatly extends the boundaries of responsibility, which will no longer be limited to ‘not doing’ but also to doing. On both a local and global level, the impact of our actions will have an increasing value for all stakeholders and the way forward has been mapped out.