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Inspiring Trend 18 August Aug 2017 1100 18 August 2017

Benefit Corporations & B-Corps: Profit is Beneficial (not only for bank accounts)

More and more Italian and international companies set social and environmental objectives

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B like business or benefit. Double B like beneficial business. But also like B-Corp and Benefit corporations. Two sides of the same coin, with a shared objective. Entrepreneurs can “make their dream come true: make a profit and commit this generation to social impact,” says Italian Senator Mauro Del Barba. Del Barba is the promoter of the Bill called “Provisions for the dissemination of companies that serve the dual purpose of profit and common benefit” later merged into paragraphs from 376 to 382 of the 2016 Stability Law, which established Benefit corporations in Italy. Company law imposes to directors the obligation of making a profit in the forefront. The legislation on Società Benefit – Italian benefit corporations – instead changes the purpose of companies, giving entrepreneurs the freedom to take into account not only profit but also people and the environment.

Benefit Corporations

Today, there are 104 Società Benefit (SB) listed in the official Italian register. A figure that has been rounded down, given that the list does not include companies that have not yet communicated their Società Benefit status or companies that have decided not to expressly indicate the Società Benefit status in their name. Therefore, to date, we can estimate there are about 150 Italian SBs. "This figure is slightly higher than initial expectations. In these first months, we witnessed the heroic phase of the pioneers, the protagonists being entrepreneurs who immediately identified themselves with its legal form and didn’t think twice". "Now," says Del Barba, "we’re going through a phase of systemic assessment. The interested parties are investors, financial groups, multinational holding companies and so on, who are performing appropriate assessments". What will the future trend be? "The linear growth of native SBs will continue and the evolution underway in the traditional business world will be essential – sooner or later, from manufacturing to finance, even on the basis of international trends, there might be a tipping-point effect". That is the point of no return. "Because," says Del Barba, "the final goal is to create a market in which the anomaly isn’t being a society that generates social benefits, but not being one."

B-Corps

And B-Corps? They are another important aspect of this evolutionary process in the way companies conceive themselves. In this case, qualification is not obtained through amendments to bylaws, but through a private certification process issued by B-Lab. To be granted the certification – today in the world there are 2,204 B-Corporations spread across over 50 countries,130 industrial sectors, of which 28 are also represented in Italy – companies must receive a minimum score of 80 out of 200 points in the assessment of the company’s environmental and social impact. "More than 600 Italian companies have undergone the assessment for environmental and social impact and 61 of them have obtained the certification – the world average ratio is 2,000 out of 60,000," says Paolo Di Cesare, co-founder of Nativa (the first Italian B-Corp and country partner of B Lab). "The rate of registration to the impact assessment is growing steadily. We expect to reach 1,000 business registrations by 2017, which is twice the number of the last two years. However, to obtain at least 80 points to get the B-Corp certification is still a challenging goal that proves how most companies have different foundations and it’s hard to change them. Nevertheless, we believe this is an inevitable process and, in the next few years, we will face a revolution in the way we do business." After all, obtaining the certification is highly beneficial for the reputation of the company. "It means gaining the worldwide reputation of being at the forefront in your field," says Di Cesare.

A few examples? The word now goes to Lorna Davis, CEO of DanoneWave and Chief Manifesto Catalyst at Danone. This question came naturally: what need was there to join the B-corp movement for a multinational company with a turnover of 22 billion euros, listed on the Paris Stock Exchange, operating in 80 countries with 150 business units and 14,000 employees? This is her answer: “We have always considered ourselves as a purpose business: our company's sustainability doesn’t stop at the gates of our plants. In 2001, we launched our impact assessment and in 2003 we launched our manifesto, inspired by the mission of bringing health through food to as many people as possible. This is why we have partnered with the B-Corp movement".

Olio Carli, Alessi and others

And in Italy? The first B-Corp manufacturing company is Olio Carli, headquartered in Liguria. CEO Claudia Carli says, "we obtained the B-Corp certification in 2014 – the first manufacturing company in Italy – but we have always felt a bit B-Corp. We have been on the Mediterranean market for over a century and we have learned the importance of quality, respect for people, employees and customers, and the communities in which we operate. We perform strict control on all our suppliers and we know them all personally. They are all values consistent with the B-Corp movement, so we decided to become certified". From the first to the latest certified company, from food to design: Alessi is another one of the finest Made in Italy brands renowned for its quality that became B-Corp certified last June. "Becoming B-Corp means receiving a formal recognisable certification of what ‘doing business’ has always meant for us: the pursuit of the welfare of the company and of society through a constant search for balance between people, products and profit," says Vice-Chairman Michele Alessi, to explain their choice of entering the B-Corps world. In addition to the Buon Lavoro (“good work”) project in 2013 – when the company donated to the community over 10 thousand hours of its employees’ work as an alternative to redundancy payment – many are the special initiatives organised by Alessi for their employees and territory. The main impact, however, is the fruit of their ordinary activities, in full B Corp spirit. "It makes me proud to think that, for the first time, the cultural impact that industrial production can have on its community of customers has been fully valued and measured," says Chairman Alberto Alessi. "20% of the company’s turnover is made thanks to the display of our products in museums all across the world. More than 350,000 works of art enter people’s homes every year."