Can profit be reconciled with ethics? Do companies have a heart? These might seem to be rhetorical questions but the ‘ B-Corporation ’ phenomenon is opening up new perspectives on how to do business while respecting the rights of shareholders and stakeholders.
Certified B-Corporations are companies committed to specific standards of performance, transparency and accountability and to operating in a way that maximises their positive impact on employees, on the communities in which they operate and on the environment.
However, while it is relatively easy to shape policies and behaviours based on concrete, verifiable and measurable facts, it is much more difficult to measure concepts such as ethics, justice and happiness.
Yet, they are verifiable because we are all able to recognise ethically correct behaviour, based on our cultural and societal values, just as we are able to recognise happiness in the eyes of an individual.
The problem is how to measure and compare such concepts. Take happiness, for example: are you happier than before? Are you happier than another person?
Meeting new demands
Bearing that in mind, businesses must adapt their professional tools to meet these new demands. Professionally, our life is marked by words like audit, assurance and compliance. In the future we will have to change, introducing to our lexicon words like ethics, transparency and responsibility.
B-Corps offer us this possibility but, to clear-up a common misconception, they aren’t not-for-profit entities.
In essence, the goal of profit is accompanied by a commitment to a positive impact on society. This enables companies to measure not only the classic indicators of profitability and profit, but also quantifiable ‘ethical’ parameters.
The B-Corp revolution has enabled the creation of objective standards, capable of measuring the social and environmental performance of companies, allowing professionals to reconcile the accountancy profession with their development.
Italy leads the way
Italy is at the forefront of this field and was the first country in Europe to introduce B-Corps into its legal system, following their development in the USA.
In the future, the success of B-Corps will be linked to the development of specialised funds to finance them. These will create an important competitive advantage for those companies that have access to them and help to make the future of many communities much better.
Indeed, the first businesses in Italy to recognise the wider benefits of being B-Corps – like Panino Giusto, Save the Duck, Alessi and Treedom – are already hard at work.
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Date: January 2021