September 6, 2024
There are so many benefits to becoming a B Corp, many of which we are sure you’ve heard before.
Growth, greater recruitment and investor appeal, cost savings, and the list goes on.
Today we thought best to provide some of the top features of a B Corp service business to help you understand the important characteristics of these businesses that drive such impressive benefits.
1) Strong Impact Business Model:
Impact Business Models, also known as IBMs, are the ways that a business is designed to create a specific positive benefit/impact for one or more of its stakeholders. As opposed to businesses that make an impact by changing operational activities such as buying renewable energy for your office.
IBMs can include the type of product the company sells, a specific process or activity undertaken, or how a company is structured. Most businesses don’t have an IBM and those that do usually don’t have more than one or two.
A successful business model generates feedback loops that have a self-enhancing effect. This means that decisions lead to consequences, which in turn enables new decisions. This process creates growth cycles that strengthen the business model and develop a dynamic that resembles network effects.
This is a strong feature of a B Corp service business, and if your business has a very strong IBM then your company will likely score among the top B Corporates in the world. This is because it’s considered rare to have a strong IBM in the B Corp assessment. Although, just because you do have an IBM doesn't always mean you’ll have a high score especially if other operational aspects of your business are lacking.
There are nine prominent IBMs a business can have, all covering one of the five sustainability pillars (Governance, Employees, Community, Environment, Customers).
Example: Community refers to how a company interacts with its community and specifically works toward leaving a positive impact. A strong Impact Business Model centred around the community pillar could implement a community program supporting local suppliers or charity giving. Most IBMs around this pillar pledge at least 2% revenue or 20% of net profit.
Penleaf is a B Corp management consultancy specialising in strategic and business planning that have demonstrated strong sustainability values throughout their business model.
They have a strong community focused IBM, having carried out over 400 hours of volunteering for local charities and providing emergency pro bono mentoring to the CEOs of four local charities. This accounts for their high community Impact score of 78.6, with ‘designed to give’ (their IBM) scoring 20.7.
2) Diversity & Inclusion metrics:
Diversity and inclusion metrics are used to identify risk areas, prioritise initiatives, set targets and other program goals, assign accountability, and measure the impact of initiatives.
A diverse and inclusive business is a space that makes every employee feel involved, regardless of who they are or what they do for the business, feel equally involved in and supported in all areas of the workplace.
Diversity in a business can include hiring diverse talent, culturally inclusive holidays off, creating safe spaces for cultural differences, diversity training and continued employment education. By increasing the representation of particular groups, companies can provide more visibility for a larger number and diverse set of underrepresented individuals through opportunities for presentations internally as well as at conferences.
Businesses demonstrate diversity and inclusion by being open about gender pay inequality/equality. Being aware of unconscious bias. Acknowledge religious and cultural holidays. Encourage frequent employee feedback. Be aware of ageism and strive for a multigenerational workforce.
3) Commitment to net-zero:
With the government enacting new legislation to mandate Net Zero targets by 2050, B Corp service businesses are typically quick to get on board and put the building blocks in place to achieve net-zero.
Net-zero means that total emissions are equal to or less than the emissions we removed from the environment. This can be achieved with a net-zero strategy by reflecting on emissions and making key targets to reduce them entirely, and finally implementing removal offsetting for the emissions you cannot remove entirely.
Having a net-zero strategy is a key feature of a B Corp service business, and the ones that don’t have one yet are surely starting to speak about implementing one.
B Corp service businesses are more likely to have a successful net-zero strategy and commitment to net-zero because they’re in the right place to understand the importance of being a net-zero business and have staff members that have completed sustainability training to go along with a clear company purpose and goal.
If you are interested in how to make a Net Zero Strategy feasible for your business, have a quick read of our net-zero strategy and contact us at Profit Impact to see how we can guide you through the process.
4) Managed governance risk:
Every business has a responsibility to ensure an effective board overseeing risks to maintain a sound system of internal control to safeguard shareholder investments and company assets.
By establishing solidified and effective governance principles, B Corp service businesses are well-positioned to handle and manage governance risks.
This is because of their important stakeholder governance or benefit governance structure. This kind of corporate governance ensures that companies are required to consider the interests of all their stakeholders - customers, workers, suppliers, communities, investors, and the environment - in their decision making.
Stakeholder governance is an important principle to B Corp service businesses that align with their feature of managing governance risks. Stakeholder governance ensures we have better businesses that are accountable to people and the planet compared to non-B Corps that traditionally prioritise profits usually at the expense of inequality, environmental damage and social fragmentation.
Aside from having regular board reviews that ensure an effective board is in place, B Corp service businesses have a very strong whistleblower policy.
A strong whistleblowing policy should be clear, simple and easily understood by every employee within the business. The policy should clearly outline its aims and objectives of how the policy should be followed; this ensures that everyone understands what is expected. . It is important to have a strong whistleblowing policy to prevent risk issues and activities occurring within your business.
This is a key feature of a B Corp service business, as risks among these types of businesses are high and so a B Corp service business would have the appropriate measures and policies in place that are regularly checked to screen these risks.
A B Corp service business would positively encourage anyone who has serious concerns about any aspect of work to come forward and voice those worries or concerns. Including a commitment to training employees about whistleblowing. This creates a safe space within the business to allow employees to address concerns that go against the whistleblowing policy.
Key components of an effective whistleblowing policy are making sure that the reporting process is as smooth as possible, establishing consistent protocols across all departments within the business, being prepared to act when fraud is detected, and reporting to authorities appropriately and professionally.
5) High Employee satisfaction:
Employee satisfaction is the level of happiness or contentment an employee feels for his/her job and is grounded in whether the goals and objectives of the business align with them on a personal level. Whether that be through financial compensation and reward, to believing in the actions towards the likes of political movements or environmental ethics.
Employee satisfaction is an essential aspect of any business or organisation. When employees are happy and satisfied with the management and work culture, they put their best efforts to make the company successful, and it’s just a better place to work
The ways in which you keep employee satisfaction high is if you, as an employer, are flexible, allow employees to shape their roles. Drive open communication and transparency. Promoting good health creates a healthy and happy workspace. It is vital to recognise and reward both small and large achievements outside financial remuneration.
Employee satisfaction is important within a B Corp service business because organisations can strengthen retention and engagement. This is non-negotiable for a B Corp service business.
This is a key feature because it is important to keep employees happy, keeping employees safe and satisfied. After all, their work is recognised and rewarded- which can lead to higher sales and lower costs.
When employees feel the company has their best interest at heart they often support its mission and work hard to help achieve the organisation's objectives. As a result of this, the company/business looks impressive in comparison to other companies that may have a low satisfaction rate.
Conclusion
By implementing any of these features into your own service business you can expect to see real growth within your team, purpose, and brand that lasts in the long term.
Soon, these features will become non-negotiables within most service businesses because they will start to weave out the businesses that do not reflect on their impacts.
Knowing where to start is always the hardest part, but we suggest taking a look at the five sustainability pillars of the BIA and reflect on where you think your business could use some help, just implementing one of these features could add the structure you need to sustain your business in the long run.
Profit Impact is here to make this journey more simple, tangible and effective. Start today by telling us what features inspire you most, and we can formulate a plan to implement them into your business. Arrange a first meeting today at sarah@profit-impact.co.uk #ConsciousBusinessPerformance
