Business Success Environmental Social Impact

Certified B Corporations

Certified B Corporations are businesses that meet the highest standards of verified environmental and social performance, legal accountability and public transparency to balance purpose and profits (Kim et al., 2016). Legally, they are required to consider the impacts the decisions they make would have on the environment they operate in customers, workers, community, and suppliers. B Corps have been observed to accelerate a global culture shift to build economies that are more sustainable and inclusive and also to redefine success within businesses (Steingard & Gilbert, 2016). The most prevalent problems within societies cannot be solved by non-profits and governments alone.

The efforts of B Corp corporations are normally aimed towards lowering of levels of poverty, reduction of inequalities, the creation of stronger communities and creation of jobs whose quality is higher and which have purpose and dignity (Stubbs, 2017). B Corps, through harnessing the power of business use growth and profits as means to ends that are greater: positive impacts on the environment, their communities, and employees. These corporations form a community of leaders and further drive global movements of people who make use of businesses as a force for good. The B Corp Declaration for Interdependence contains the B Corp communities’ aspirations and values (Chen & Kelly, 2016).

It is worth noting that B Corp Certification does more than just the evaluation of services and products; it assesses the overall positive impact of the company that stands behind it. Interestingly, that is what most people care about (Honeyman, 2014), a combination of public transparency, third-party validation, and legal accountability. These corporations achieve a minimum verified score on the B Impact Assessment, which is a rigorous assessment of the impacts a company has on its workers, environment, community, and customers. Additionally, they are also required to make amends to their legal governing documents to require their board of directors to balance purpose and profit.

To obtain a B Corporation certification, a company is first required to complete an assessment online, after which, those companies that earn a minimum score of 80 points out of 200 go through an assessment review process (Honeyman, 2014). That involves a conference call that verifies the claims that have been made in the assessment. Before certification, a company must provide supporting documents. These assessments will cover the entire operations of a company and measures the company`s positive impact in areas of workers, environment, community, governance and the service or product the company provides (Moroz et al., 2018). In line with a company`s geographic, industry location and also its number of employees, the weightings of the question categories are adjusted for purposes of increasing its relevancy. For example, any such company that has a higher number of employees gets a higher weighting in the worker's category while manufacturing companies receive higher weightings in the environment category.

The B Corporation certification standard operates within principles that are comprehensive, transparent, dynamic, comparable and dynamic so as to maintain credibility. Just like with other business associations, companies that receive the B Corp certification are entitled to a number of discounts from fellow members and even from outside entities. It is, however, worth noting that the B Lab certification has no legal status.

In America, King Arthur is the oldest flour company and has been an operation for over two hundred years and continues to create high-quality flour for consumers and even bakers across the country. In addition to its flour business, the company also sells ingredients, baking equipment, baking mixes and cookbooks through its catalog, The Baker`s Catalogue, website and at The Baker`s Store in Norwich, Vermont which is its flagship store. It has also published four cookbooks among them the King Arthur Flour Baker`s Companion and the King Arthur 200th Anniversary Cookbook, the former having won the James Beard Award in 2003 for cookbook of the year.

The company which is entirely owned by its employees is viewed as one of the best places to work in Vermont ever since the award was incepted in 2006. In 2012, a new flagship bakery, school, café, and store were opened by the company in Norwich, Vermont.

Sustainability, Sustainable Value Creation and Embedding Sustainability

Sustainability is the process through which change is maintained in balanced environments, whereby, the direction of investments, exploitation of resources, the orientation of institutional changes and technological development are all harmonized and further enhance both future and current potential to meet human aspirations and needs (Clayton & Radcliffe, 2015). The focus of sustainability is normally on meeting the present needs without compromising the abilities of future generations to meet their needs. The three main pillars that form the concept are social, environmental and economic and they are informally referred to as people, planet and profits.

Currently, we live in a world where resources are constrained, populations are increasingly growing, and planetary boundaries have been expanding (Crane & Matten, 2016). These are factors that have raised the need for sustainable value creation. Sustainable value creation is defined as a core business strategy whose focus is on addressing fundamental societal issues through the identification of new and scalable sources of competitive advantage that would bring about measurable profit and community benefits. Its core purpose is a redirection of business efforts in a way that would both empower the community while at the same time also making money (Baland, Bardhan & Bowles, 2018).

Embedded sustainability involves the incorporation of social, health and environmental value into the core business with no trade-off in quality or price, that is, with zero green or social premiums (Laszlo, & Zhexembayeva, 2017). For any businesses that endeavor to pursue embedded sustainability, there exist numerous ways of creating value for their businesses. Noticeable strides have been observed in most companies towards compliance with and anticipation of social and environmental regulations. These companies have learned eco-efficiency operational best practices- the process costs reductions that come from improvements of material throughput, elimination of waste and conservation of energy that has seen them save millions of dollar. However, very few companies focus on top-line growth based on brand or product differentiation. Radical innovations can be adopted within companies to cut on costs simultaneously, enter new markets and differentiate their products (Whelan & Fink, 2016). Whatever the company-wide initiative or sustainability project, managers can benefit from assessment and consequent acting on, its potential for value creation at the multiple levels.

At each sustainable value creation level, it is necessary that managers ask themselves a different set of questions. Mitigation of risk involves the management of potentially costly liabilities so as to avoid the destruction of value (Tantalo & Priem, 2016). At the reducing energy, waste and materials level which is also referred to as the efficiency level, it is necessary that managers ask themselves how embedded sustainability will lead to greater savings along the lifecycle value chain. At the product differentiation level, the inquiry will be about the expectations of consumers and how those can change to incorporate the ever great social, health and environmental attributes. In the entering new markets level, managers need to ask themselves how their business can come up with solutions that are profitable to global problems. A good example of a new market/ business model is where the needs of poor consumers that are not covered are met. At the reputation and image level, managers need to ask themselves about the core identities of their respective companies. The question here is the extent to which the company`s social and ecological goals are part of the company`s culture and mission. The business contact level is about shaping industry standards or government regulations that would favor the market leaders over their competitors.

Embedded sustainability makes a lot of sense. There is a high likelihood that it would imply that organizations have a handle on efficiency that is decentralized in its broadest sense, in-depth awareness of social and environmental trends and related opportunities and risks, and may even lead to experimentation and innovation that contain more bottom-line benefits (Buller & McEvoy, 2016). Additionally, through embedded sustainability, stakeholders and employees get fresh opportunities to find meaning in organizational life.

To embed sustainability, that is, to be an organization which people proudly associate with, several things need to be thought about and put into consideration. One will first need to establish the key drivers within their organization for embedding sustainability, who already gets it and who still needs more convincing? Are there any grass roots activities present that could help get senior managers buy-in? Among many others (Mefford & Johnston, 2016).

King Arthur

The core values of King Arthur Flour namely employee and community ownership; quality, stewardship, and passion are displayed on the company’s website. The mission of the company which as of today has over $100 million in revenue and more than 300 employees is to inspire connections and community through spreading the joy of baking ("A World of Good: Committed to Reducing our Impact on the Planet", n.d.). In fulfillment of its mission, the company is seen in its sharing of recipes, practices of teaching baking in schools and the support it offers non-profit organizations whose focus is on hunger and food.

Today, the company is entirely owned by its employees, which means that every employee has a stake in the wellbeing of the company. With open-book management, the company continues to practice transparency, and its ESOP board of trustees mostly consists of its employees. Being a certified B Corp has helped the company to measure its impacts and further provided a scorecard for benchmarking its progress.

King Arthur Flour`s governance B assessment scores are relatively high scoring 19 out of possible 20 points, employees, 59 out of 70 possible points and greater community opportunities scoring 20 out of the possible 45 points and environment assessment scoring 19 points out of the possible 45 ("Benefit Corporation Annual Report 2017", 2018). These scores are an indication of the company`s area of focus. For instance, the company`s leadership team has set up ambitious goals of reducing the company`s overall impacts on the planet. The company has already been taken strong steps towards the improvement of its environmental practices, reduction, and auditing of waste streams and improvement of energy efficiencies. King Arthur Flour`s significant environmental impact is observed in its supply chain. If the company was to improve the impacts that farming of wheat has on biodiversity, water, and land, it would be necessary to understand and further encourage best practices with their suppliers and growers ("B Impact Report: King Arthur Flour Company", 2018).

Only US-grown wheat is used at King Arthur Flour, and the company took steps towards the improvement of transparency when it introduces the “Identity Preserved Flour.” That is wheat that is milled from wheat grown by farmers who use agricultural practices that are sustainable including cover crops, no-till, reduced irrigation and crop rotation.

In response to the desire of its consumers to know more about how their food is made and where it comes from, King Arthur Flour launched flour manufactured from seeds that are certified that made it easier to trace from farm to table. Across King Arthur Flour, it is recognized that consumers always want to know where their ingredients are obtained from. The seeds used to grow the wheat used for manufacturing the Identity-Preserved White Whole Flour are normally traceable to farms whose growing practices are monitored closely with comprehensive field-data documentation (Keenan, 2008). Through this, both the customers and the company are assured that the seeds are obtained from farms whose practices are sustainable for example, farms that plant cover crops and adopt rotation for purposes of replenishing the soil's nutrients, zero use of till practices and use of less irrigated water.

These seeds are also most preferable because they exemplify King Arthur Flour`s high-quality standards and are optimal for the provision of the best baking results like flavor. The Identity-Preserved White Whole Meal is normally 100% whole wheat and not a mixture of wheat and white flours, and so it contains all the nutritional benefits contained in classic red wheat even though with a flavor that is milder in comparison with the traditional bitter taste that is characteristic of traditional whole wheat. Additionally, it also produces baked goods of lighter colors that are similar to white flour while also maintaining the nutritional value of 100% whole wheat.

In 2012, King Arthur Flour took additional steps to facilitate the protection of its legacy and mission. Its employees who are also its owners voted for the company to become a Vermont benefit corporation, which in state law is a form of legal incorporation, which more deeply embeds the same principles as the non-profit certification of being a B Corp. as a Vermont benefit corporation, whose grounds are on employee ownership, the company has continued to carry out its mission of inspiring community and connections through spreading the joy of baking and its values, caring for the planet and its people, for many more years to come (McGinley-Smith, 2010). Definitely, that would not have been the case had the control of the company gone to an outside entity. Under ownership that is traditionally, financially oriented, relentless and ultimately impersonal drives to ratchet up profits are normally the primary aims.

For King Arthur, its employee ownership has been its protective form of ownership that has facilitated the flourishing of its social mission. Inside the frame, the living social mission has been able to evolve over time which has deepened the ecological sustainability commitment. King Arthur Flour meets high criteria for environmental and social performance as well as other factors (Stranahan, 2018). For example, the company has continually been working to increase composting and recycling while also reducing the usage of energy. Its activities that are geared towards sustainability act as models for its employees who follow suit as a result of being empowered by the corporate culture.

King Arthur Flour has created an in-house stewardship team that is made up of two groups: a community working group whose focus is on projects that are socially oriented and a green working group whose focus is on environmentally oriented projects. The stewardship team is the primary mechanism for the different corporate social and environmental responsibility efforts. The environmental stewardship team has overseen the implementation of a company-wide recycling programme whereby food waste is usually sent to local farms to feed the animals. The team also came up with the “green your commute” challenge whereby employees were challenged to come up with ways through which they could get to work aside from the one person per car, for example through carpooling. The team also initiated the “green clean” initiative whereby non-toxic, biodegradable and environmentally responsible cleaners replaced the company`s cleaning products ("A World of Good: Committed to Reducing our Impact on the Planet", n.d.). The green working team also oversaw the redoing of the warehouse lighting which was done to reduce the consumption of energy and also came up with a non-GMO policy which barred King Arthur Flour from ever using wheat that was genetically modified.

Each company needs to identify its biggest environmental impacts and figure out what they can do about it. For King Arthur Flour, flour presents a puzzle that is larger than even recycling. Because the company does not own the farms where the wheat it uses is grown, it is not possible to manage those farms (Keenan, 2008). The company can, however, use smart sourcing to manage where the wheat comes from and its subsequent distribution which would go a long way in reducing the company`s carbon footprint.

In a move away from bureaucracy, all King Arthur Flour employees have a say in the running of the activities of the company and deeply embedded in the culture of the company is taking care of employees. As such, perks like parental leave, company-paid volunteer time, vegetable baskets and free turkeys at Thanksgiving, free baking classes and subsidized exercising opportunities all lead to increased satisfaction of the employees. Additionally, the work environment at King Arthur encourages its employees to have fun while also working hard. Recognition of employees comes in the form of knighting ceremonies in the spirit of the Arthurian legend. For more than 200 years now, treating employees, the society and the environment well has been at the cornerstone of King Arthur Flour, and these characteristics will with no doubt serve as recipes for future success ("Benefit Corporation Annual Report 2017", 2018).

Conclusion

High sustainability companies are characterized by government structures that directly and explicitly takes into account the company`s social and environmental performance in addition to financial performance. These companies also pay particular attention to their relationships with their different stakeholders like customers and employees. Additionally, there is also a higher likelihood that such companies would measure and report on social and environmental metrics together with their financial results.

Certified B Corporations are normally obliged to assess the impacts of their decisions not only in terms of the interests of their shareholders but also in terms of all their other stakeholders. King Arthur Flour has been making efforts towards sustainability. The company has been seen to adopt smart sourcing to ensure that the flour they get comes from farms that adopt green practices. That is because the company does not own any wheat farms of its own. Additionally, the company is fully owned by its employees and in Vermont, it has for several years been voted as one of the best places to work.

From the farming practices in the field to the company`s packaging processes, the company always strives to make their products better for their customers. Working closely with suppliers, millers, and farmers, King Arthur Flour always strives to be more transparent in its continued commitment towards sustainability.

References

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