Edited by Dr KK Tse
I was in the US for the past two weeks, partly on holiday but primarily for the purpose of attending the B Corp Champions Retreat in Philadelphia on October 18-20.
The Retreat was an eye-opener for me. What I have gained far exceeded my expectations. Let me summarize the most important takeaways as follows:
- The global B Corporation movement is gathering momentum and is likely to produce a major transformation of businesses around the world in the decades to come.
- There is widespread and strong consensus among many business people (regardless of whether or not they are part of the B Corp movement) that ‘business as usual’ is no longer an option. Specifically, they reject the notion long advocated by Milton Friedman that “there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits.”
- Although there are now many initiatives and movements to reform and transform the capitalist enterprise, the B Corp movement stands out as one of the most effective ones as it involves both a certified B Corp scheme and legislation for Benefit Corporation. Even for countries without the Benefit Corporation legislation, the certification scheme has enabled businesses from around the world to become certified B Corps.
- The total number of certified B Corps has just passed the 1,900 mark. It is still a small number compared to the millions of enterprises worldwide. But they are the early adopters and advocates of a new sector of the economy in which the competition is not to be the largest or most profitable but to be the best FOR the world. It reminds us of Margaret Mead’s famous quote: “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.”
- A community of 1,900 certified B Corps is far more than a summation of individual companies. They are growing as a ‘community’ in a significant sense. To begin with, they share a unified goal of being a force for good. Practically, they share experience, networks, and resources; they benchmark each other and share best practices; they treat each other as preferred business partners; they offer discounts to each another; they collaborate and create synergy; and wherever possible, they establish local communities to enable more intimate relationships among fellow B Corps and their employees.
- In addition, the certified B Corps represent a collective voice that mainstream business has to change and change fast. Previously, individual businesses might have some exemplary practices benefiting more than just the shareholders. But they were often perceived as ‘loners’, ‘abnormal’, outside the mainstream, etc.
But B Corps as a global movement pronounce to the world that we are not alone, and indeed, we are the future. Never in the history of mankind have so many like-minded businesses coming voluntarily as a single movement across national boundaries, sharing the same aspirations and promoting the same approach to business. Here lies the possibility of reshaping and transforming the entire business world as a force for good.
The Adam Smith Parallel
Some people outside the B Corp movement are skeptical about the possible impact of the movement. They have doubts that B Corps could have much effect on changing mainstream businesses and the underlying mindset and principles of contemporary business. Such skepticism is understandable as the B Corp movement is still at its early stage, barely ten years since the first certified B Corp was born.
It is interesting to compare the current situation with the historical context when Adam Smith wrote The Wealth of Nations. The following paragraphs from the book The New Capitalist Manifesto: Building a Disruptively Better Business by Umair Haque (Boston, Mass: Harvard Business Review Press, 2011) are revealing:
“In 1776, one man found himself at the centre of a maelstrom. Hurricanes of change lashed the globe: growing markets, expanding international trade, a rising middle class, disruptive technologies, novel commercial entities. Yet, where his contemporaries saw chaos, Adam Smith saw hitherto unimagined possibilities.
“In The Wealth of Nations, Smith envisioned with startling prescience a very different prosperity: one in which capitalists, not the mercantilists, aristocrats, and agrarians who had preceded them, held sway. Stop for a moment to consider the keenness of that insight. In 1776, horses provided power for carts and carriages. Steam-powered locomotives would not arrive until the next century. The economy’s central axis was households, not even medium-sized corporations. Ownership of land, mills, tools, and rights was sharply concentrated in the hands of the nobility, and passed down through the patrician generations. The ‘joint-stock companies’, still new forms, required government charter or royal decree for incorporation.
“It was, in short, NOT a world in which the capitalist enterprise as we know it today might have been foreseen to flourish. Yet, by seeing through the maelstrom, Smith synthesized, in detail and with ruthless logic, his new vision of prosperity.” (page xvii-xviii)
Haque went on to pose this question: what if the future of capitalism will be as different from its present form as Adam Smith’s vision was from its present?
Indeed, with the emergence of such global movements as the B Corps, the first quarter of the 21st Century might be remembered by future historians as a watershed in the development of the capitalist enterprise.
The Hong Kong Scene
Unfortunately, businesses in Hong Kong have been too slow in recognizing the imperative to change. The majority is like the proverbial frog in slowly boiling water, totally unaware of the wind of change in different parts of the world. But things are beginning to change. Just in one year (2016), two major initiatives have emerged among the business sector, the Business for Social Good platform spearheaded by Our Hong Kong Foundation, and Hong Kong Good Social Value initiated by the Wofoo Group.
At the same time, the Social Innovation and Entrepreneurship Development Fund (SIE
Fund) has been actively promoting the Creating Shared Value to the business community.
The Hong Kong Social Entrepreneurship Forum (HKSEF), which has been the organizer of the Social Enterprise Summit, has also begun to promote the B Corp idea and certification scheme to local businesses. HKSEF, working with Education for Good and two organizations from mainland China, has organized the first-ever Cross-Strait B Corp Forum in September this year as part of the Summit program.