B corporations: A stakeholder capitalism that works for people and planet?

This post was first published on mother nature network on June 7, 2011.

Economic growth: it is perhaps one of the only ideas that enjoys widespread bipartisan support these days in Washington. “Grow the economy!” is the rallying cry heard from Wall Street to Main Street, and probably even on Sesame Street (two marshmallows are always better than one, right?).

While the economic growth paradigm is questionable for reasons too numerous to get into here, not all economic growth has the same environmental and social impact. Many business owners believe that the forces of capitalism can be harnessed to promote positive change in their communities and around the world. And while many such businesses and non-profits have an explicitly social or environmental dimension to their missions, corporate law still places institutional barriers on for-profit companies attempting to do more than increase their bottom-line.

Enter the B corp, or benefit corporation, a new type of corporation specifically structured to serve a larger social and environmental purpose. While current law legally obligates corporations to maximize profits — corporate executives can be fired or sued for making decisions that benefit the community at the stakeholders’ expense — B corps represent an alternative for social entrepreneurs with the common good in mind.

The founders of B Lab, a non-profit dedicated to developing, certifying and promoting B corps, have envisioned a different way of structuring corporations that would build in transparent social and environmental performance standards. This entails a profound shift from stakeholder capitalism to shareholder capitalism — a way of doing business that formally recognizes the many diverse shareholders that every corporation has beyond their investors.

Any corporation can become a certified B corp by taking a comprehensive Impact Assessment that measures a corporation’s practices in five fundamental areas: accountability, employees, consumers, community and environment. This certification, similar in function yet significantly distinct from other product certifications like free trade or organic, serves as a powerful indicator that an entire company follows a determined set of ethical standards. And the new corporate form liberates social entrepreneurs to recognize community, employee and environmental shareholders in the corporation’s operations. The certification creates the framework for companies to institutionalize social values and then recognizes those that have done so.

There are currently more than 400 certified B corps around the U.S., despite the fact that only four states* (now up to seven states as of February 2012)have legally recognized this new corporate form. Virginia was the most recent state to sign benefit corporation legislation into law in 2011, but seven other states have legislation pending.

I had a chance to meet Hardik Savalia, one of B Lab’s first employees and team members, as part of Climate Ride’s Expert Speaker Series. And though I am generally wary of business models that still operate within the dominant growth paradigm, I certainly see the value in B Lab’s mission to institutionalize social entrepreneurship and create legal space for mission-driven companies. While no one expects the Forbes 500 to all immediately alter their business perspectives, the B corp model adds significantly to the larger cultural narrative of sustainability and engages the massively powerful business sector in creating a better world.

In that endeavor, we need all the help we can get.


The Participation Paradigm (Pt. 2): The Social Economy and Collaborative Facilitation Processes

What do we want? Democracy! When do we want it? Now is fine with me, but I’m happy to consider your opinion as well.  
-“Protest” Sign at Rally to Restore Sanity, Washington, DC

Occupy London, like the movement more generally, has opened up a space for public dialogue. By naming the systemic problems facing our society, the movement has invited people to question their relationships to corrupting and regressive institutions. Within this new space of possibilities, society has been asked to explore its values and priorities; it has been shown a different way of living and relating to one another through a dynamic mixture of participatory events and processes contributing to the life of the camp. In questioning the relevance of old-paradigm institutions such as the centralized state and the financial system to adequately address converging crises – and working towards systemic solutions to these crises through civic engagement – Occupy London is a unique manifestation of the social economy in action.

According to Robin Murray, the social economy is that area of economic activity “not geared to private profitability”. It is motivated explicitly by social values and yet, contrary to mainstream economic theory, has resulted in widespread social innovation and production. The development and integration of more collaborative methods of group facilitation represents a particularly exciting realm of innovation being explored in areas of the social economy such as Occupy camps and other hybrid social institutions.

To respond effectively to the highly complex and uncertain conditions we now find ourselves in, methods of problem-solving and community organization must also reflect complex system dynamics. Numerous examples from around the world – from participatory budgeting in Brazil to development of energy action descent plans in towns across the UK – provide evidence that more distributed and participatory group processes can be far more effective at responding to complex problems. As importantly in the long-run, such participatory processes build the foundations of a more inclusive and democratic society by contributing to a different cultural narrative of empowerment and community agency. Participants in such processes shift from consumers of goods and services to co-producers of the life of society.

As a way of simultaneously adding to the critique of our dominant growth-based economic paradigm and introducing more collaborative, dynamic forms of group engagement to the Occupy London community, I developed and facilitated a participatory visioning workshop. Entitled “Occupy the Future! Re-envisioning Economics in an Ecological World,” this workshop drew on the perspectives of ecological and transition economics to suggest alternative approaches to the institutionalized problems of resource over-exploitation and increasing wealth disparity. Crucially though, these concepts were introduced using inclusive and participatory techniques which transformed participants from passive audience to active co-creators of the learning experience.

The arc of the workshop was inspired in part by the transformative learning model practiced at Schumacher College: we began by exploring the implications of our dominant cultural narrative on economic and ecological systems, embodied ourselves as members in a vast and interconnected community of life, personally envisioned what a sustainable and equitable future might look and feel like, and finally created a collective vision of the type of economy which might support this sustainable, equitable, meaningful future for all. The results of this creative and collaborative process were highly consistent with the decentralized, re-localized, post-carbon future envisioned by, among others, the Transition Network (2009), E.F. Schumacher (1973), and the new economics foundation (2009).

Equally as important as the content of the workshop were the methods chosen to facilitate it. We employed proven self-organizing techniques such as Open Space Technology (used frequently by the Transition Network), personal visioning processes developed by Joanna Macy, Starhawk and others, as well as embodiment activities developed by Robin de Carteret and others at Schumacher College.  The cumulative effect of these activities was intended to be a feeling of empowerment about the future, rooted in the re-imagining of ourselves as active co-creators of our current and future communities. In nurturing the collective intelligence of the group – regardless of (or perhaps because of) the fact that it consisted largely of strangers – we arrived at far richer and more compelling visions of the future; richer due to the diversity of experience represented in the group, and more compelling because the vision was shared and thus responsible to more than one individual.

Social innovators such as Charles Eisenstein and Alpha Lo have written on the many varied techniques that might be employed to further develop the participation paradigm in settings such as Occupy communities. From Gift Circles to Appreciative Inquiry and World Cafe processes, there exist a growing abundance of facilitation methods that both harness and embody the self-organizing, non-hierarchical networks of the social economy. Such processes have the potential to contribute to a virtuous cycle of empowerment and participation because they simultaneously teach new ways of relating and exchanging information, while also creating more generative solutions to complex problems arising out of the collective and distributed intelligence of social networks.

A New Paradigm

Our stories guide us to write our reality. And because we then see our reality through these stories we think that is all that is possible. We collectively create these self-imposed constraints on reality. When we write new stories, our collective reality becomes different, we interact in new ways, we build new things, a whole new world becomes possible.
– Alpha Lo

The universe is pregnant with both uncertainty and potential. How we understand our collective and individual roles in shaping an uncertain future is significantly conditioned by the dominant cultural narrative, or paradigm, influencing us. In a period increasingly characterized by rapid non-linear change – in ecosystem functioning and climate regulation, in financial stability, in political representation and inclusiveness – we must employ a new set of tools, processes, and forms of organization more coherent with the nature of the world as we now know it.

The participation paradigm, then, represents a growing acknowledgment of the failure of neoclassical market mechanisms to fulfill our individual and collective needs above a certain threshold of material comfort. The narrative of citizen as consumer is both profoundly degrading to our higher potentials and materially destructive as the linear industrial economy threatens to transgress ecological limits. In its place, a more ecologically sustainable, socially just, and spiritually fulfilling paradigm of co-creation and mutual aid.

While it is beyond the scope of this essay to analyze the efficacy of ongoing developments such as the Occupy movement to catalyze systemic change, I have placed trends towards more participatory and distributed forms of organization in the context of the emerging social economy, an area of the socio-economic system better suited to respond innovatively to change. Examples of social innovation in action are demonstrating how we can organize our communities around something more meaningful than monetary transactions, that we can choose to base our relationships on cooperation instead of competition, generosity instead of greed, creation instead of consumption.

If our “Occupy the Future!” workshop was any indication, a meaningful exploration of the future begins with participation in the present. Individual and collective empowerment provides a limitless source of innovation and resilience, and thus simply re-envisioning ourselves as co-creators of the future brings us one step closer to realizing it. As one participant commented at the end of our workshop,

“What I’m taking away with me is this idea that much of the time we imagine that the future is something that happens to us, that it’s up to other people as to how the world is going to be. This [workshop] has reinforced the idea that actually we all create the future together. We are co-creating it. “

Participation, in all its manifold expressions, provides a way of re-experiencing the world in a more empowered way. In participating more fully in the life of society, we enter into relationship with all our fellow participators. And if the currency of the new social economy is relationships, then the revolution truly is love.