These are heady times for Certified B Corporations and impact investing—two arenas Thinkshift is deeply involved in. The number of Certified B Corps is growing faster than ever. Impact investment options are expanding. And big brands (such as B Corps Athleta and Danone N.A.) and institutions (Bain Capital, UBS) are getting involved.
B Corps and impact investing seem to be approaching critical mass. Major financial institutions are promoting impact funds, and the Global Impact Investing Network (GIIN) reported over $228 billion in impact assets under management in its 2018 survey. There are 2,655 Certified B Corps worldwide, up from just over 2,300 a year ago, more well-known brands are now B Corps, and multinationals are inquiring about certification. (Currently, multinationals aren’t eligible, though their subsidiaries are.)
Bigger brands mean greater risks
With this rising visibility come growing pains: B Corp and impact investing leaders are figuring out how to go big and achieve mainstream adoption without losing brand value or credibility. Those challenges were top of mind at the B Corp leadership and the SOCAP conferences last fall.
For B Corporations, one potential risk is that if huge corporations are certified, the certification bar will be lower—or will be perceived as less stringent. Another is that a misstep by a big company could have a negative impact on the B Corp brand.
Impact investing—which is a field of business, rather than a brand or certification—is a bit different. One risk here is that mainstream institutions may not define “impact investing” consistently or as the field’s leaders define it. (“Investing with the intention to generate positive, measurable social and environmental impact alongside a financial return,” per the GIIN). A dilution of meaning could lead to cynicism and a perception of unrealized benefits.
Communications play a big role
These risks shouldn’t get in the way of going big—the opportunities are too great. Indeed, this is a critical time to keep telling stories supporting the message that these approaches to business are the way forward.
Much depends on how big corporations perform. In the case of B Corps, do they use certification to inspire continued improvement and serve as a model for others? Or do they just get certified and leave it at that? For impact investing, are firms practicing “real” impact investing? Or is it a shallow effort or small add-on to traditional offerings?
The second critical element is how big brands communicate. They can be true champions, reaching into their supply chain and partner networks, customer base and beyond. They can communicate regularly and honestly, with their B Corp certification or impact investing work aligned with their brand.
Current leaders can have a real influence
Meanwhile, the pioneering leaders in both arenas can encourage big brands and have a real influence by maintaining strict standards of matching communications to actions and mission, presenting achievements honestly (no grade inflation) and getting the message out. As models of best practices, pioneers are also positioned to keep tabs on newcomers. It’s hard to be a watchdog without being preachy—but it can be done.
The time is right. There’s strong momentum, and people are asking business to be better. If large, respected brands step up and use their communications platforms wisely, we can really accelerate the pace of change.