New face of capitalism sees business put planet before profit

by Lin Taylor | @linnytayls | Thomson Reuters Foundation
Wednesday, 19 December 2018 14:00 GMT

Plastic garbage litters the shoreline in Cilincing in Jakarta, Indonesia, November 26, 2018. REUTERS/Willy Kurniawan

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An increasing number of businesses are keen to dismantle a 'greed is good' culture and inject compassion into the free-market system

By Lin Taylor

LONDON, Dec 19 (Thomson Reuters Foundation) - Be it banning plastic or enshrining worker rights, an increasing number of businesses are reinventing the way they operate by putting people and the planet before profit.

For some companies, that has involved a public and transparent overhaul of their business model, as well as their social and environmental impact, through an ambitious certification scheme called B Corporation, or B Corp.

The aim? To dismantle a 'greed is good' culture and inject compassion into the global free-market system.

"We're trying to change the operating system of capitalism," said Kate Sandle from B Lab UK, the group rolling out the U.S.-founded movement across Britain.

"And the only way we're going to change that, and create long-lasting benefit for all, is for mainstream business to be seen as part of the solution," said Sandle, who oversees the community of about 180 certified B Corp businesses in Britain.

Globally, more than 2,700 companies across 150 industries have been certified since the scheme launched in 2006, which means they are now legally required to track their impact on employers, suppliers, community and environment, the group said.

"We're just trying to push people in the right direction to create change, and if we don't need to exist, then that would be absolutely perfect," said Sandle.

YOUNG MONEY

Being ethical can make financial sense, too.

In the United States, nearly half of all shoppers said they would change their consumption habits to reduce their environmental footprint, according to a survey this month by data research group Nielsen.

The report said U.S. consumers spent $128.5 billion on sustainable products this year, a jump of 20 percent since 2014 - which was a growth rate four times higher than what they spent on non-sustainable products.

By 2021, that figure will rise to $150 billion, Nielsen projected, with tech-savvy young people leading the charge and more willing to buy sustainable products than older generations.

It pays for business to be ethical given that half of the world's population is now under 30, and their biggest concerns are climate change, conflict and inequality, according to a 2017 World Economic Forum survey of 30,000+ youths.

Sandle said growing consumer concern that supply chains fully respect worker rights, along with environmental worries, coupled with the prevalence of social media, means companies are now under ever greater scrutiny. And this scrutiny is laced with widespread scepticism about the motives of big business.

Distrust of businesses was the highest in four years, with less than half believing that companies were ethical, according to a May survey of over 10,000 young people in 36 countries by global accounting firm Deloitte.

FORCE FOR GOOD?

It is an image that corporations have tried hard to change.

In 2013, fashion groups - including H&M, Inditex and C&A - vowed to overhaul their supply chains after a Bangladesh textile factory collapse killed more than a thousand people, sparking a global outcry for better working conditions.

Tech giant Apple, criticised for labour exploitation in its Chinese factories, pledged last month to hire human trafficking survivors in its retail stores.

"Business is pretty much the most powerful force on the planet. If you really harness it, what change could we create as a result?," Sandle said.

Big brands - from Coke to Kellogg - pledged in October to cut all plastic waste from their operations as pressure mounts on manufacturers and retailers to tackle the deluge of packaging that is clogging landfills and choking the seas.

Products like palm oil and even trendy avocados have also been banned from some menus and supermarket shelves, with many concerned the foods were damaging the environment.

Leading British fruit juice and smoothie brand Innocent, a certified B Corp company, said more businesses needed to take responsibility and change.

"The scale of challenges facing us across the planet means that everyone needs to play a part," said Rozanne Davis, Innocent's head of sustainability and nutrition.

Food and beverage company Danone, the largest multinational to join the B Corp movement, said about 30 percent of its business had been certified.

"The world is facing significant challenges that governments, charities, social businesses cannot solve on their own," said Danone's Blandine Stefani, who is overseeing the partnership with B Corp.

"Mainstream and large businesses are an important part of today's economy. They need to be part of the transformation to foster true systemic change," she said.

(Reporting by Lin Taylor @linnytayls, Editing by Lyndsay Griffiths. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's and LGBT+ rights, human trafficking and slavery, property rights, social innovation, resilience and climate change. Visit http://news.trust.org to see more stories)

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