#46 Is B Corp Certification Too Easy?! Talking to Kristin Toussaint from Fast Company

All right, so, yeah, I'm here with Kristen. Shall I try and butcher your surname? Is it Tucson?

I was pretty close. It's always a. Like, when you're boring with the Jones, it's quite easy. But actually some people still manage to mess that up. And Chris and I recently connected. She has recently wrote an article just talking about this whole B Corp stuff. So. Yeah, Kristen, I guess, quickly. Yeah. Who are you? What do you do? What do you know?

Yeah. I am a staff editor at Fast Company magazine in the Impact section. And so Impact obviously focuses on how businesses can make an impact. For sure. That's a huge thing we explore. And so in the November issue of the print magazine, I wrote this article looking at some of the sort of criticisms leveled against B Lab recently and sort of what the certification is going through as it gets more popular with these big giant companies. Right.

Yeah. Although it's pretty cool that a magazine of such magnitude has an Impact section. But let's just reflect and say, well, that's. That's pretty awesome because it's possibly not that long that that's been a thing.

Yeah. So your article, you were just sort of highlighting. Yeah. And it's been true. It's kind of like the new N word. Don't say the word nespresso in this region. Australia, New Zealand, we now have Unilever Australia, New Zealand. And within the B Corp community there, it's been a real split decision. Like some B Corps have basically said, well, here's my certificate, I'm ripping it up. I'm out. If. If they can be a B Corp. I'm personally more of the opinion that it's better to have those companies in the tent and have us be able to influence them and do what's what. But. Yeah. Where did you sort of come down on. On your. Your opinion on it? Or are you still. Are you maintaining a split decision yourself?

Yeah, I think, I guess be a little bit neutral. But it is such an interesting question because it, it brings to mind, you know, like, what is the B Corp label for? What is the. The B Corp certification for? And, you know, B Lab's whole goal is really to make all of businesses a force for good and to sort of change the economy for the better. Right. And so in the piece, I talk about how, you know, can you change the economy if you don't also invite these big players into the game, even if they may not have acted, you know, in their employees or the planet's best interest in the past?

Yeah.

Looking forward.

Yeah. 100% and I used to work for a startup here in New Zealand. They're now actually sort of doing great stuff in, in the, in the US and UK called Cogo. And we started off trying to, it was, it was more of like a marketing insights platform when it first started. So as a retailer you could sign up and you could see what consumers were coming into your score who were on our app, who'd, who'd lodged on the app, what they cared about. So do they care about living wage, do they care about cruelty free, you know, food products, what have you? And we'd have a constant conversation inside the team like if McDonald's rung tomorrow and said, hey, we want to be on your platform, would we take them? And some people were just like, well no, we just don't see that McDonald's gets to exist. We just existentially they're not a good company. But then, you know, the other half are like, yeah, but if we could, if we could change how McDonald's operates by 1 or 2%, you know, the impact that you can have by changing a massive company by a couple of degrees, you know, does that, and I guess, I don't know, I don't have the study or the data to hand but you know, does that make more impact than 10,000 small local, you know, Christians burger joint where you're just flipping burgers on the street corner for your local community? Yeah, yeah.

And I think it speaks to the power, you know, how popular this idea is of purpose in a business and ESG minded values that these big companies are even, even want to be a part of this. Right. I mean that's a huge shift change from a couple years ago, which shows that, that companies are even considering these things now and not just profit above all else.

Yeah, 100%. And.

It'S nuanced, it's tricky, it's gray, it's not always black and white. As to this, this is good, this is bad. You know, even I look at, I kind of put it in sort of a five levels of impact, you know, and business as usual in pretty much most sort of western democratized countries, so long as you're trading legally and solvently, you're in business. And you know, I, I always come back to. Well, currently with, with almost 6,000 B Corps globally, we're sitting at about 0.0.1 or 2% of limited companies globally are currently a certified B corp. So you know, it's, it's still pretty fringe, you know.

Yeah, you're right. I mean they're in the news all the time. And you know, we talk about, about B Lab and B Corp so much, but it is still such a small percentage. Yeah, but people are so, I don't want to say desperate, but they're so interested in, and they want, you know, a certification like this to exist that they do get this sort of outsized maybe attention or scrutiny on them. Even though they make up such a small part of the market.

Yeah, and that's, and that's what I, you know, I guess the way I always try and frame it when we're talking to people about B Corp, or I'm just talking to anyone about B Corp, which is what I pretty much spend most of my time doing is, you know, it's, it's, it's not a silver bullet. There is no silver bullet. And.

The other analogy I use quite a lot recently, so I went to school in the, I'm from the UK originally. And when you do your schooling there, you, you do your GCSEs at 16 and then if you go on and carry on through at school, you do your A levels when you're, when you're sort of 18. And I, I did biology at A level. And on day one, the teacher was like, hey, there's good news and bad news. Shout out to Mr. Watkins. There's good news and bad news. You know, the good news is I'm still your teacher. Haha, you know, dad joke. The bad news is basically everything we taught you at GCSE you need to forget because we basically have to dumb the curriculum down so much for you to be able to understand it. It's practically just like all made up. And for me, this is, this is where I'm kind of getting to increasingly with B Corp. It's like B Corp is not the endpoint. You know, B Corp is not like if everyone's a B corp, the world is not saved. You know, there is. And I guess you could look at someone like Nespresso, it's like, well, does the world need coffee sent to you in a pot? That it's still creating waste, you know, so for me, beyond B Corp is, is this idea of, you know, regenerative business. And then you, you put in the idea of degrowth and you, but you, you know, you say that to someone who right now is like, we just need to sell as much stuff as we can and we don't really care about the impact. Yeah, it's, it's, it's like, yeah, it's like Wacky Races or the Wild west out there. Yeah.

And yeah, depending on where companies are in their own, you know, trajectory of being a business, they can do different things. So, you know, one thing that came up when I was talking to some sources is like, maybe a startup doesn't have the capacity to do a lot of charity or something at the moment. It just needs to focus on getting bigger first. And so that, that impact can vary too, depending on how big a company is.

100%. And that's. That I think is the real tension piece is to do purpose in the current system, you need profit. And if you can't make profit, you don't. You, you can't do as much good. And you know, if you're not here for, you know, for the long term, you know, but also I think people, you know, a lot of people were saying, you know, Nespresso just shouldn't even exist. And you go, okay, well if we said tomorrow, let's say there's a group of us, a group of, I don't know, guardians or smart people who decide what businesses can and can't be here from tomorrow. Okay, cool. Nespresso doesn't get to exist from tomorrow. Well, how many people do they employ? Like, what happens to all of those people? And I think we lose sight that. I think in general, the vast majority of people going to work are not going to work to actively destroy the planet, you know, and destroy their communities. Sometimes that happens and maybe, maybe you're disconnected and you don't understand that that is happening as a, you know, unintended consequence of your actions. But yeah, I think the vast majority of people, in the last couple of years, I think Covid's accelerated it. You know, people are increasingly looking at their work and why, why would we do this? And, and what impact is it having? So, yeah, I think in general, I'd rather have these big companies in and be put under more scrutiny and held to account by a community of, you know, almost 6,000 other businesses going, hey, look, actually that's not so cool what you just did. And don't you remember as a B.

Corp. Yeah, yeah, they definitely put pressure on each other to, to get better and to continually improve. And it is interesting that you bring up the employment thing because that came up with so many sources that, you know, being a B corp attracts employees. Now people want to work for these companies that, that care about these things.

Yep. And I definitely think it's different. You know, when I, I had a really good early midlife crisis, which led to what I called a Hard Brexit from the corporate world. You know, back then there were two B Corps in New Zealand. There was about 1200 B Corps globally. So the, the idea of trying to find a job in a B corp and be part of a company that is actively trying to make itself better and work out how to do less bad and start doing more good, like, that just wasn't a thing in 2014, or it was really, really fringe. Whereas now, like I say, you look at some of the work that the unilevers are doing. Some of the stuff that I actually, I've spoken to the New Zealand CEO of Nespresso. I was kind of like, when the, when the dust has settled, I was kind of like, are you okay? Like, you've had a little bit of flack, but, you know, welcome, congratulations. But you know, when you sit down with these. I sat down with him, had a meeting with him. Ironically, we didn't have a coffee. I think he's obviously coffeeed out. Just having a chat to him about, you know, and learning and listening to, like, well, the good stuff that they're doing. It's like, that's actually pretty cool.

Yeah, it's, it's, it's interesting. But I think the other thing to think about is, like, there's a lot of companies that have not done that much good perhaps, or, you know, what they've been doing has been done in a way that's created these externalities before. You can flip some of these super tankers around to being genuinely business as a force for good, the effort required to stop doing not so good is. I don't think that's recognized as much as, hey, look, we've just invented this thing. It's, it's really amazing. But actually, the effort to turn some of these supertankers around where, you know, if you're the, if you're a new CEO or new employees, new leadership coming into a company and trying to transform it and transition it again, like, it's really easy to throw rocks at them and go, yeah, but you're not doing this, you're not doing that. But as you said, it's like, we can't. You can't do everything. And if you try and do everything, you. You do end up doing nothing badly.

Yeah, and that's a really interesting point about what the B impact assessment looks at. Right? Like, they. I think one thing that amazed me, talking to more people about this and digging into it is that, you know, this has to be one assessment that looks at every sort of company, whether it's the small one that started out in purpose to the big that had to turn that ship around. And so that's such a. A wild challenge to have to do to be one thing that can, that can assess all of that.

Yeah. You could not pay me enough money to try and work out how to create the BE. Like, if someone said, hey, today you've got. Here's $10 million, go and build. I'd like. Yeah. No idea where to start.

I kind of don't know how they did it. Yeah. And they've obviously done multiple versions and they're always improving. I think they're.

I think we're on version six. Seven.

Yeah, it's six now.

And then they're going to be seven. And again, I think this is the thing. I think it's easy to criticize. It's easy to throw, like, as I call. It's like throwing rocks at it. Oh, it's not good enough. It doesn't look. It's like, yeah, but what else is there? Like, there was nothing before this came along. So, yes, let's aim to be better. Totally, but let's not. What is it? Is it the Roosevelt quote or the, you know, he who's in the. In the arena? You know, paraphrasing it, really. But you should know, you're a journalist. You should know these things. Quite. But, you know, you know, don't. Basically, don't criticize the person who's trying, you know, like, get behind them. Yeah. It's interesting because people often say to me, well, you know, what's the competitor to B Corp? It's like, well, there kind of isn't really a competitor because it's the only certification that is social and environmental. It's globally recognized and it's independently verified. And I think the fifth kind of bonus thing is for some reason, it has captured the hearts and minds of people. Whereas if you kind of go. If you say to anyone who's been through an ISO certification, you don't get many raving fans about, oh, ISO. It's so cool. We had such a great time. Whereas B Corp people are just like, yeah, it was tough, but hey, like, it was amazing. And we've got all this stuff out of it. So I think it's. It's here.

Yeah. And I guess they're tinkering with it. So you haven't had a deep look at the new. At the new draft standards?

I haven't dug into them too much, but I do know that the, the biggest change is sort of this idea of requirements now. So on the, on the impact assessment there's never been the idea that you have to do, you know, one specific thing in each of the five categories. Like I don't. The example I gave in my article was like environment is obviously a huge part of the impact assessment but it has never required that you use renewable energy, for example. And so now what they've been working on is this idea of specific requirements that if a company is a leader in these things they have to do these other requirements along the lines of a living wage and things like that.

Yeah. And in general, what are your, what would be your thoughts on having sort of mandated requirements? I guess the word mandate is a, is a loaded word in post. Covid.

It's very interesting. I again it's like the, what the impact assessment is trying to do. I think I, I looked at Nespressos and It was like 400 page long, you know, questions and digging into things. So it obviously has always been very in depth. But I do agree that if your company is going to be billed as a leader in the environment, it should be doing some specific, you know, they're probably a little bit like low hanging fruit things but it still is a leadership in that area relative to.

Yeah, I think it's. For me I'm kind of on the fence a little bit about it. I think partly I look at a lot of small to medium businesses where for them to meet this minimum standard, I think it's going to take them, it's going to take them time to get there. So I think when you look at it from like a, a kind of a purely a marketing perspective, like I say we're at 0.01 or 2% uptake currently to ratchet up the standards before we're even at 1% or 5% of businesses. I do wonder whether, I mean the assessment as it is, it's bloody hard. Like it's not something that you just turn up and go cool, can we have our certificate please? We've answered some questions like it's bloody hard and we've had hundreds of thousands of companies take the assessment and for whatever reason not go through to certify. So whether that's, they just go actually this is too hard or actually it's not what we thought it was or we don't have the resource or we can't afford it or what have you. But there is, you know, there's already a decent drop off of people who take the free assessment but don't go through to Certify. So part of me wonders whether this is too soon or.

That's a really interesting point. Yeah, sorry, go ahead.

No, sorry. Yeah, or, or is actually the groundswell support there that people have gone. Actually we do want to like we recognize that we do have to meet this standard and I guess, I don't know, I guess we'll find out. But having looked through the draft standards for my business, I'm kind of like, I'm not sure like today that I'd meet the criteria. And it's like I'm also not sure that today I've got the time and capacity to actually go and implement. Like if I, if I was due for recertification under the new framework in the next three to six months, it would be a big piece of work and I'm a three time B corp, you know, so like I know my way around doing good theoretically. So yeah, I don't know. Interesting. Well, I guess we'll see what happens in 2020.

One thing that. So when I spoke to Dan Osky, who's the head of insights at B Lab Global, he did say to me that every time that they have updated the impact assessment, it's got harder. So they actually see the average score go down every single time.

Y.

Even if a company is maintaining its score, that shows that. Yeah. Accomplish something harder every time. Which I don't think a lot. That's good to know people outside might be aware of. Yeah, that, that just maintaining that score has already been a challenge every time.

Yeah. Which makes sense because in year one, which is interesting because year one I think I was like 82 and then I went up to like 92 and then this time around I've dropped down to like 84 or something. Yeah. And it's, it definitely. Yeah. I've heard anecdotally that it gets harder each time, but that's good to know from the like the single source of truth that they are ratcheting it up. But yeah, I just think it's gonna be interesting. Like most of the companies we work with are pretty B corp aligned like and they can get to 80. It's. I just think it's gonna be interesting. I think there's going to be some people who might just go, you know, look, I, I'm just not interested in that as a, as a thing or I don't have capacity to, to be concerned about that topic specifically because look, having had a brief look at it, you know, this, this stuff like, you know, you have to have campaigned around a social Cause or you have to have done. It's kind of like, well, what if I don't care about a specific social cause? Like, I'm busy trying to run my business and I, and I'm really focused on making more money this year so I can make more of a donation to my local community where I'm. Yeah, I don't know. I just think it's. I need to spend more time myself looking into it. And it's also, I think it's going to be interesting to see whether they go, right, we're going to roll this out to existing B Corps first up. Because you kind of know your way around B Corp and so. Or do they go. Actually, it's like a hard stop. If you're new to the B Corp and this is your first time around, you just get thrown straight into this one and then we get some feedback. Or whether they do it. Whether they do a bit of both. Yeah, I don't know.

Yeah. And also, I mean, the pipeline, it takes so long to go through the certification process that, you know, there's, there's never a time where they can just sort of stop everyone.

Yeah, yeah.

Yeah, we've had that. I've had that happen to a couple of clients where they, they're like, oh, we just looked back in and, you know, they, they'd been dithering quite a bit. So we just looked back in and the assessments completely change. It's like, yeah, did send you a couple of reminders and I did see the email from B Lab telling you that the. Yeah, this is when the last update was done. It's like, oh, yeah. So I'm sure they'll, they've thought through that one. Yeah. So other than the standards change, where, what do you sense as maybe like the future for B Corp or how B Corp interacts with the wider business community?

Yeah, I mean, it is. The, the way that it has grown in popularity in such a short amount of time really is astounding. And, you know, that was a thing that I've heard from so many sources. It's just that what it has been able to do in the past 10, 15 years is almost beyond, I think, what a lot of people expected of this, you know, little startup, nonprofit. And I think that's only going to grow. I think that the, the weight that that symbol has and what it means not only to businesses, but to consumers, to employees, you know, that where it stands in the market as a, A symbol of, you know, what a company stands for, I think that it's just going to keep growing as people want to support those, those kind of companies. And that is interesting because, you know, for B Lab to have succeeded in the way that it has so far, for it to just even get the buy in that, you know, hundreds and thousands of companies are bothering to go through with this assessment in the first place. It had to really strike a balance of between how hard but yet how accessible the certification process is. Right. So one of my sources, Joel Gammon, who is one of the co founders of the academics.

Nice.

We're saying, you know, you have to get a certain, you have to get enough people to buy in that they're willing to go through the hard process. But it can be too hard that people don't want to go through it.

Yeah.

And I think that just, it's going to keep being that balance going forward. Right. Like you said with the new standards, is it, is it that people will still see the value in going through it, which I think they will because it has earned its place sort of in the last.

It's got it. Yeah. I think I, I just hope that the cachet, the marketing value, the, the community that's been built around B Corp, the like, like I say, the companies we're working with, like there's a genuine desire like we, when we, when we're, when we grow up, we want to be a B corp. Like we, we, we are doing this. And then once they get into the assessment, kind of like the red mist comes down, it's like, yeah, like they just become these point hunting monsters. Like yeah, yeah, let's go and do that. Like let's go and check. Right? Hey, like Kristen, go change that policy. Get that written. Tell the team we're now doing this. Like now we know that that's a thing. So yeah, it's almost like a, like a flow state, isn't it? Like that kind of like just pushing your ability but hard enough to keep you, keep you interested.

Yeah.

Yeah, I think, I think the big thing and I've just been pondering on this in terms of like my own business and how we help companies. So our model currently is, you know, we will help advise, coach, consult, poke, cajole you over the 80 points. So we'll get you in like we'll help you get to B Corp through, yeah, upskilling, training, educating you, providing content, whatever you need to get to get to 80. I kind of think what we're going to see with the new framework is more companies taking longer to get to the 80 or get to the pass mark threshold. So I think it's going to be a case of. And it's going to be interesting to see whether B Lab have like a mini assessment, which is what they used to have. So they used to have this sort of B Corp light where you could take a really quick 30 minute assessment and it would kind of say, yeah, look, you're, you're probably a little bit far away from B Corp right now. You need to go and have a think about this stuff. Or it would be like, yeah, look, you're possibly going to smash this assessment. So yeah, you know, click here to, to go for the big, big one. Yeah. So I wonder whether they're going to create some kind of tool where you kind of go, yeah, look, based on what you've put in, you're possibly, you know, doing well on three out of the eight sections. It looks like you're going to need to do some work. And so I see how my role is going to possibly change where we're with. We're possibly going to be providing more consulting, advisory and trading content to get you to the threshold rather than kind of coaching you through an assessment to get you across the line to then think, because our current model would be, get you to be Corp, then think about how you'd be better having looked at the assessment and worked out what you want to prioritize, what matters to you and your stakeholders, what have you. Whereas I think, yeah, it's going to be a bit of a mindset. So, whereas like, you know, your unilevers, your Nespresso, it took them like two or three years to get B Corp because they had to make the changes. I think we're going to see more of that. But even for companies that are pretty aligned with B Corp, I think they're going to have to go through that change process, which maybe that, maybe that is going to be a better way of doing it. I don't know. I guess we'll, we'll find out.

Yeah. And I can imagine there will be a lot of education about, you know, what the new standards include and sort of how to get there for those, for those big multinational companies. You know, B Lab has definitely put out sort of guides of how to go through the process and support for that. So there's certainly going to be education about what this even entails.

Yeah.

Any final closing thoughts? I mean, you did, you know a lot about B Corp before you kind of did this, this piece, or presumably you learned a lot more about it going through it.

I Learned a lot more about it. And I think, I mean, I knew a, a good bit, but I think that was something really interesting is, you know, every academic, I spoke to, every source to get context about this, they have to explain so much about, you know, what B Lab is. And yep, we actually had, you know, a word limit for this piece because it was in print. And it was so hard to think to know how much might already know about B Lab. Yeah, yeah, there's so much to it. There's the legislation, the actual legal framework of a benefit corporation. There's how long the impact assessment is. There's so many factors that I think when you just see that, you know, B Corp symbol, you don't realize all of this stuff that has gone into it before. So that was a really interesting aspect of this to me is just how deep you could go. I mean, there's entire industries that are barred from becoming B Labs, ever. You're in prison industry or tobacco industry, things like that. And I don't think people, you know, it's so hard to find out all that information in space.

Yeah, 100, you know, that's that. And it's, it's really interesting because, yeah, I do quite a lot of talks and workshops at, you know, events where I'm kind of like that B Corp bloke, coming to educate and tell the masses about what this thing is. And even just over the last two years, I, I, you know, I normally start off by going, right, does anyone know what B Corp is? And there'd just be no hands. It's like, cool, okay, so I'm just going to dial this all the way back to like 101. Whereas now you, you might have like half the room put their hands up and then it's like, okay, well, does anyone work for a B Corp? And there's like two hands. You're like, hey, hello, B Corps. Or it'd just be like a desert of B Corp. So I think there's definite, there's definite increased awareness and, you know, in no small thanks to people like yourself, you know, writing these articles and just spreading the word and showing that interest and keeping the, you know, keeping the thought of B Corp in people's minds through great articles like yours. It's, it's kind of like, I think we've reached a tipping point for sure. Like, you know, once you've seen it, you can't unsee it. Once you realize that you can do, you can run a business or be part of a business that's trying to Be better and make a positive contribution. Like, why would you go back to not doing that? It's like it's so aligned with human interests and planetary interest. So, yeah, I just think B Corp is inevitable. I think my.

My ideal, I think, would be that B Corp becomes like, if you want to be a C Corp or a limited company, it's like actually, you know, you just need to be meeting these basic reporting standards on how do you treat people, whether it's a pass or a fail. But at least you're reporting, you know, and if, and if you pass, great, you're a B Corp. If you, if you're not passing. Well, I think that that would be an interesting intermediary step for governments to be pondering on in terms of like, like I say, you're to be a limited company. We're trading solvently and legally. And even then the legally, in a lot of cases, ironically, typically the larger the company, the more we can get away with dodgy stuff. Yeah, I think that's, that's going to be interesting to see where this all goes.

Yeah, yeah, I agree.

Cool. Oh, well, thank you so much for your time. Thank you so much for your article. It's been great to chat. Have you got any more B Corp articles in the pipeline.

At this moment?

Yeah, I'm gonna be, I'm definitely going to be digging into the new standards. That's the process. Definitely takes a while, you know, as they develop, but I'm going to be keeping an eye on that for sure.

Nice. Yeah, I think that's definitely a next good article for you to look at and it would be interesting to see what like, the people who were kind of like, yeah, but how can Nespresso be a B Corp? It's gonna be interesting to see what their feedback is on the new standards and whether they're like, well, that's still not good enough. It's like, you can't please some people. Or are they going to be like, actually, yeah, great, that's great. Yeah, I'll watch this space. We'll find out. Cool. Well, thank you so much.

Thanks.

Catch you soon.

Yeah, have a good one. Bye.

Hey, it's Tim here, that B Corp bloke from Grow Good. If you want more content on purpose, B Corp, how to do more good in the world as an individual or a business, then you know the drill. Hit the like and subscribe. Check out some of our other videos. They're probably floating around here somewhere. You know how it works. Thank you so much. See you next time.