My brother, sister and I founded and have been growing COOK, a manufacturer and retailer of remarkable frozen food. We were determined that we use our business as a force for good, but for many years we struggled to find the right way to express this commitment.
This changed in 2010 when I met Jay Coen Gilbert, one of the founders of B Lab US, at a social business conference in San Francisco. Gilbert and his partners, Bart Houlahan and Andrew Kassoy, had discovered the limits of a traditional business model in 2005 when they tried to sell their sports clothing business to a buyer who shared their values. The legal obligation of their private equity investor to maximise shareholder returns meant that they were forced to sell to the highest bidder despite this – in their view – being the wrong option for the company and its core purpose. So they developed the B Corporation – a new type of company that explicitly disavows shareholder primacy in favour of equal treatment for all stakeholders, or in other words, a company that values people and planet as much as profit – and founded B Lab – the US non-profit that drives the global movement of social business.
The B Corporation was the embodiment of everything we were trying to achieve at COOK and in 2013 we became one of the first UK companies to become a certified B Corp. The effect on our business has been so remarkable that, along with Volans (another UK B Corp) we decided that other British businesses should be able to benefit from becoming a B Corporation and join this growing global movement of like-minded businesses and business leaders. Plus we were getting kind of lonely here!
In the US, a B Corporation is a completely new type of company, because their company law makes it impossible for directors to run their company for any other reason other than to maximise shareholder profits. Therefore the ‘benefit corporation’ legal structure was created and passed into law in 27 states. But not all ‘benefit corporations’ are certified B Corporations. To become a certified B Corporation, a company must not only pass a legal test that has all stakeholder interests ranked equally, but it must also score 80/200 in the B Impact Assessment, which is a rigorous standard for social and environmental performance.
In the UK, the 2008 Companies Act is more flexible than US Company Law and we don’t need to pass a new law or invent a new corporate form to enable companies to become B Corporations – they can pass the legal test by amending their constitution (usually the Memorandum and Articles) to reflect broader stakeholder value.
Provided they pass the legal test and score 80/200 in the B Impact Assessment, then in theory any company can become a B Corporation. There are now over 1,300 B Corporations across the world, spanning 41 countries in 121 industries. They include, at one end of the scale, innovation consultancies like Volans, with less than ten members of staff, and at the other end Natura, Brazil’s largest cosmetics company with $2.7bn turnover. Some B Corporations you might have heard of include Ben & Jerry’s, Patagonia and Etsy.
As for the UK, we have a significant number of companies currently undertaking the certification process. The companies which have gone through the process already include leading sustainability consultancy firms such as Sustainability, Carbon Analytics and Volans, to Charity Bank (a regulated UK Bank) and – of course COOK – a fast-growing consumer brand which manufacturers and retails our remarkable frozen food through 83 shops and 400 farm shops.
James Perry is the a director or B Lab UK and chairman of COOK.