“Why bother becoming a Benefit Corporation?” is the question that many companies ask themselves once they realize how demanding the certification process can be.
Becoming a Benefit Corporation is a challenge because it requires radical change that affects all levels of a company, but particularly in terms of culture and strategy. Being a Benefit Corporation means doing business with two aims: to generate sustainable profits in the long term and to strive for a sustainable future for later generations and for the planet itself.
Despite the complexity and demands of the process, the number of companies deciding to become Benefit Corporations is growing exponentially. Today, there are nearly 4,000 certified Benefit Corporations around the world, including 121 in Italy.
For companies nowadays, Environmental, Social and Governance (ESG) issues have become a top priority. This is even the case in the world of finance, where the term Impact Financing has become popular. We’re even seeing companies who are reticent to accept this sustainable, inclusive business approach being penalized for their choice.
But why does becoming a Benefit Corporation make sense? There are many reasons, but top of the list is undoubtedly the impact the certification has on a company’s reputation.
The value of reputation
Becoming a Benefit Corporation means making a strong commitment to generating positive value for all stakeholders, as well as establishing an open, transparent relationship with the world.
This kind of approach has positive consequences for the image of a company and for brand reputation, particularly in the eyes of consumers.
In recent years, sustainability and the perception of “civic brands” have acquired more and more relevance in purchasing choices.
Consumers, millennials and members of Generation Z are more sensitive to these aspects, to the extent that they are willing to pay up to 30% more to purchase sustainable products.
Yet though it might be a great demonstration of commitment, simply possessing Benefit Corporation certification isn’t enough on its own. To win new customers, companies must be transparent in the way they run their business.
The new generations are much more likely to do their own research to see how sustainable a product or service really is before buying – so it’s important to be clear and transparent when communicating the tangible measures a company takes around sustainability.
But the positive effects of becoming a Benefit Corporation don’t stop at reputational benefits.
Sustainability as a lever for business growth
There are several studies that show that adopting a sustainable approach can bring significant and tangible benefits in terms of business growth.
Companies striving toward the Sustainable Development Goals (SDGs) are likely to develop innovative approaches to adapt their production operations to new social, environmental and governance needs. In this approach, sustainability becomes a vehicle for self-assessment and integrated strategic development, with three added advantages: reduced costs, increased productivity and heightened flexibility and resilience.
Integrating sustainability into your business model also has one more significant advantage: It can open the door to a plethora of new opportunities. Thanks to the acute interest of the financial sector in ESG matters, certified Benefit Corporations have a key advantage when it comes to attracting new investment.
According to Larry Fink, the CEO of Blackrock, one of the world’s biggest investment funds, investing in companies who showcase how sustainable they are through transparent reporting has become a must.
That box is certainly ticked by Benefit Corporations, who – to obtain and maintain their certification – measure and monitor their impact by filling out the B Impact Assessment, to bring about ongoing, systematic improvement.
As we’ve seen, becoming a Benefit Corporation is a strategic choice – not just for the present, but also for the future.
With regulations around environmental protections and human rights becoming ever more stringent as time goes by, expanding to apply to more and more companies, only those organizations that are sustainable to their cores and can demonstrate their compliance with the criteria can be assured of a prosperous future.
Here at Way2Global, we made the decision to become a Benefit Corporation when we were founded. If you’d like to know more about our sustainability story, please head to the “Benefit Corporation” page. You can also read our Integrated Report by filling out the form below.