Running a business these days is not only about the bottom line. Modern consumers and CEOs often now strive to achieve what is called a triple bottom line—to have a positive impact socially, environmentally, and economically. Sarah Childers explains.
This concept is not a new one, by any means. One can attest to this by what Charles Dickens wrote about in A Christmas Carol in 1843, which ends with main character, Ebenezer Scrooge, deciding to use his financial position to promote goodwill in his community instead of spreading negativity, so to speak.
Perhaps you too are in a position to make a difference in others’ lives. Maybe you are wanting to be more mindful of your purchases, or are a new business looking to incorporate a positive aspect into your business model. Maybe you are an already established business and were just visited by three ghosts last night who told you to look this concept up. In any case, this concept of corporate responsibility falls under in the category of social enterprise.
Up until a few years ago, businesses in the US could talk all day about how they were “helping others.” Take a look at any corporate website and you will see headers or phrases that talk about “community support” and “social investing.” However, there was never actually a third-party standard a business could adhere to that truly proved their company was walking the walk and not just talking the talk.
It makes no sense, for example, for a company to say that they give X amount of profit to charity when it is simultaneously poisoning a community’s water supply to manufacture their product. Right? So, rather than just become frustrated with these types of circumstances, there are some standards that businesses can adhere to, to prove they are an all-encompassing entity that makes a profit as well as be of benefit to others and the planet.
“This means that people and the planet are given the same consideration as profits.”
There are two main movements that I see gaining momentum. The first is for companies to become a “benefit corporation,” a concept that is also known as “corporate responsibility” or “ethical capitalism.” Spearheaded a few years ago by a non-profit organization called The B Lab, this idea is going global. It is basically a process that a business can go through that will promote transparency and contribute to the greater good while still turning a profit. It adheres to what is referred to in the accounting world as “the triple bottom line.” This means that people and the planet are given the same consideration as profits. I also know of a few large companies that have joined this movement, such as Ben and Jerry’s and Etsy.
However, in the US, not all 50 states recognize benefit corporations (or B Corps) as actual legal entities. Other states have passed a hybrid of sorts that does resemble a benefit corporation but are not called as such. But, for companies in states that do not recognize this type of legal entity, there is nevertheless an opportunity to participate in the B Lab’s certification process. As of April 2015, there were more than 1,200 certified B Corps across 41 industries in 121 countries.
The second movement is a whole plethora of platform-based initiatives. These methods utilize a third-party process that have an end goal of creating a positive impact on society. This is essentially when a business sector, non-profit sector, government, and/or individual acts as the investor for a venture that is intended to improve the world. Each blend has its own method of madness when it comes to investing for social impact and measuring its effort. This concept is known as “impact investing” or “social impact investing.” According to the Global Impact Investing Network, otherwise known as the GIIN, there is approximately USD$60 billion invested globally for this specific movement and just like ice cream, there is more than one flavor. Check out their website at thegiin.org for more information.
Think of all of this as a really cool Van Gogh painting where all the colors stand out, but yet complement each other and are connected in some way. Close up, it looks like a mess. But when you stand back and look at the whole thing, it takes your breath away. I liken all of these concepts to a rage against the dying of the light; a step in the right direction.
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