Why looking through the B Corp lens has become a business imperative

There is a small but growing group forming in the built environment. A group of companies that are seeking to put purpose alongside – and potentially even above – profit. Those companies are working through the complex process of becoming a B Corporation. At EG’s Sustainability Live event, held at Cadworks – one of only two net carbon zero buildings in Glasgow – during this month’s COP26 – we sat down with Basil Demeroutis (pictured left), managing partner of FORE Partnerships and Tom Vaughan-Fowler (right), head of national markets at WiredScore to find out why they have chosen to B more Patagonia EG:  Let’s start with what B Corp is and what it really means. Basil: B Corp is more than a certification. I would say it’s a movement. It is a recognition that businesses of all types, not just real estate, are thinking about their purpose. They’re thinking about what it is that they do. The reason they exist. For a long time we had a notion in business that we existed for shareholder primacy, for profit for shareholders. But there’s been a penny drop moment for businesses and we’re recognising that profit isn’t the be-all-and-end-all. It’s about people, planet and profit in equal measure and B Corp recognises that. B Corp looks at your business in the round, from how you treat your staff to your investments and scores you on the basis of purpose and whether you’re a purpose-led business or not. Then you embed a commitment to people and planet alongside that profit into your corporate charter and bylaws. It becomes a key part of seeking to end this notion of shareholder primacy and thinking about a new model of capitalism. EG: With certification requiring legally binding changes to your business, have you found a new focus on your decision-making processes? Basil: You’re really looking at the 360-degree nature of your business and the impact you’re having throughout what you’re doing. In a building like this, with a £30m construction spend, we’re having a significant impact on everything, so we think about where we’re buying food from to where the labour is coming from. But, equally, in our own business we’re supporting other B Corps by procuring from them. Honestly, a day doesn’t go by where we don’t think about how it has impacted our business. Tom: That is very similar for WiredScore. Having the B Corp lens gives you a way of saying, “Right, objectively, what are we doing? How are we doing it? What are the steps we’re taking? And if we were to submit this for external assessment, how would it look?” And, thankfully, in most cases we haven’t drastically changed our decision-making process, but it has given us a chance to look at what we always thought we were doing right in a much more objective manner. EG: And what about talent? Are you finding that people want to work for a company that puts purpose alongside profit? Tom: What companies stand for matters more now to employees than ever before. I was talking to some colleagues who were at the CoreNet conference in the US where the phrase “The Great Resignation” has been bandied around a lot. That has primarily been driven by two things: people’s lifestyles have changed over the last year, and the things that matter to them have changed. I think there is a clearer link now between what your company stands for and the people who are willing to work in that company. And, again, having that B Corp background just gives it more authenticity when you say these are the things we stand for. EG: The B Corp mission statement says that certified businesses must meet the highest standards of verified social and environmental performance, public transparency and legal accounting, and the ability to balance profit and purpose. It is accelerating a global cultural shift to redefine success in business and build a more inclusive and sustainable economy. That sounds like a goal every business could get behind, doesn’t it? Basil: I think we are entering a moment where we’re transitioning towards work being done more with your heart and with your purpose. And that feels entirely natural to us. I passionately believe that this concept of empathy is going to be the currency of the 21st century. I think it is important for businesses to be empathetic, purposeful. And I think that is the key to thriving and surviving. EG: Do we need something like this forced upon business? Basil: I think purpose-led empathetic businesses will thrive and all others will not. It sounds very dramatic, but with the amount of businesses committing to being more thoughtful about the environment, which of course is a part of purpose, we’re at such a tipping point. Maybe we need to have the freedom to choose. Tom: I completely agree with that. We had some interesting conversations with investors when we told them we were committing to B Corp certification and that they were no longer our only concern. That was quite an odd conversation to have with an investor, but the response was overwhelmingly positive. Many said we were philosophically aligned exactly with where they were as a business but also that we were a more tangible long-term prospect as a result. This is because there will be a change in regulation and legislation and the expected way we do business. EG: Will there come a point where if you’re not a B Corp or something similar, investors will turn and walk away? Tom: We’re almost at that point already. There is a lot of capital available in the world for a variety of different things, whether it’s real estate investment or investing in Start-Up Series A, Series B, whatever. There are also a lot of people willing to receive that capital. You are already at a disadvantage if you cannot demonstrably show what you stand for and be able to prove it. The real estate industry as a whole is moving to a place where legislation around things like the environment is going to become more strict. And the challenge will be for businesses to proactively flourish in those stricter environments, rather than get to the point where they think, “crap, the rules have come in. We’re moving too late and we can’t do anything about it”. EG: What are some of the tangible benefits that you’ve seen by being a B Corp? Basil: We’re a fund management business at the end of the day, so we’re about attracting investors. It’s started the dialogue with a lot of people that perhaps we wouldn’t have otherwise been able to attract, and deepened the relationships with those investors. For a smallish firm like us, it has really put us on the map against much, much bigger competition. Tom: I think another benefit is that you get to be part of really important conversations. The first step is to become a B Corp and make sure we actually are accountable. By committing to becoming a B Corp, you give yourself a platform where you can encourage others. You can illustrate the benefits and try and add further weight and momentum behind that movement to change. To send feedback, e-mail samantha.mcclary@eg.co.uk or tweet @samanthamcclary or @EGPropertyNews