Will Unilever become the world's largest publicly traded B corp?

The movement to put purpose at the heart of business strategy has received a major boost with news that several multinationals, including consumer goods giant Unilever, are considering becoming B Corps, for-profit corporate entities that commit to positive social and environmental goals.

Last month, Brazil’s top cosmetics, fragrance and toiletries maker, Natura, became the largest – and first publicly traded – company to attain B Corp sustainability certification. B Corps are certified by NGO B Labs as contributing social and environmental benefits beyond the financial bottom line.

Consumer goods giant Unilever could be the next one. The company’s chief executive Paul Polman told Guardian Sustainable Business in Davos that becoming a B Corp would send a powerful signal that the purpose of business is not just profit, but to have a positive impact on society and the environment.

The complexity of operating in scores of countries, however, would make B Corp’s certification process extremely complex for a company such as Unilever, and becoming a B Corp would take considerable time.

Jay Coen Gilbert, co-founder of B Lab, the non-profit company that began the B Corp movement, said the lack of resistance from Natura’s institutional investors was a major breakthrough.

“The investors found it a non-issue as it was not a material change from how Natura was already operating,” he said. “With some of that spade work being done by a pioneer, it now makes it easier for the next publicly traded companies ... we are in conversation with a number of larger multinationals to go through the assessment tool, and they are pretty interested in becoming officially certified.

“Having a larger group of globally influential companies join gives more credibility and draws other companies in. Some technology companies [that are] interested may not be so large in revenues but have huge reach.”

Another boost to B Corp came when the similarly named B Team, the nonprofit organisation co-founded by Sir Richard Branson and Jochen Zeitz, said it would encourage its members to consider taking part in the certification.

Rajiv Joshi, managing director of the B Team, which includes Natura and Unilever amongst its members, said they want more large businesses to become certified B Corps and to support the creation of legal structures around the world that would allow businesses to put purpose at the heart of their business strategies.

Jostein Solheim, chief executive of Ben & Jerry’s, has been leading negotiations with B Corp on behalf of Unilever, having become a B Corp three years ago. He said: “They are rapidly scaling up the movement and finding ways to apply their assessment in a time-efficient way to big companies like Natura.

“With the Unilever Sustainable Living Plan and Paul’s strong leadership within the sustainable business movement we have been interested in assessing how to apply the B Lab assessment to a company of Unilever’s scale. At the first stage we would be looking to assess how the certification could be applied to Unilever and the cost and complexity of getting it done. Paul [Polman] is very supportive of B&J’s B Corp participation and the way we are leveraging a common standard to grow the overall movement and develop our values-led supplier network.”

Natura’s co-chair, Guilherme Leal, has been in Davos encouraging other publicly listed companies to become B Corps. He said he went through the assessment because, like Polman, he wants to help the movement to grow.“We are trying to demonstrate that it’s possible for larger corporations to become B Corps, even if the main target is the new generation of companies that are being created.

“I agree with Paul Polman that, for companies like Unilever working in many different countries, it’s not an easy process, but I believe in collective learning and I think that the B Lab and big companies such as Unilever could learn together, trying to go through the process. We know that those companies will face some difficulties to manage different situations around the globe, but we need to reduce the differences amongst operations in different countries.”

Leal says that Natura scored 111 out of a possible 200 in its initial B Corp assessment. “This is higher than the average, but as you can see we have 90 points to go, so this creates a roadmap to show where we should put higher efforts to become better and how to deal with some issues that we are not giving enough attention to. Understanding our fragilities better means we can see where we can improve.”

Gilbert of B Lab says some publicly listed companies will end up just using the free assessment tool to benchmark their performance rather than go through the certification process. Around 1,200 companies are now B Corps and another 25,000 companies use its assessment tool, but with millions of businesses operating around the world, Gilbert says they are so far just scratching the surface.

• This article was amended 26 January to clarify the definition of a B Corp.
  

This Davos coverage is funded by The B Team. All content is editorially independent except for pieces labelled “brought to you by”. Find out more here.

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