Activating Mission to Navigate Societal Changes and Business Challenges with B Lab’s Sarah Schwimmer and Mission Partners’ Bridget Pooley
About This Episode
In a world grappling with declining trust in institutions, businesses face increasing pressure to become agents of societal change. This episode of Mission Forward explores this evolving dynamic with Sarah Schwimmer, co-lead executive at B Lab Global, the non-profit behind the B Corp movement. Host Carrie Fox cedes the interviewing chair to her colleague, Bridget Pooley, Mission Partners' chief operating officer, for a deep dive into the forces reshaping corporate responsibility.
They explore the Edelman Trust Barometer’s findings, revealing a fascinating dynamic: as trust in traditional institutions wanes, the pressure mounts on businesses to step up. Sarah highlights the B Corp movement's explosive growth as evidence of this trend, with thousands of companies seeking ways to balance purpose and profit. She shares compelling examples of B Corps actively engaging in their communities, like Legacy Vacation Resorts' efforts to empower employee voting.
The conversation also touches on the crucial issue of shareholder vs. stakeholder capitalism. Is simply declaring a commitment to all stakeholders enough? Sarah and Bridget discuss the importance of accountability and the role of B Lab's rigorous B Impact Assessment in driving real change.
Finally, they explore the age-old tension between mission and profit. Can businesses truly prioritize both? Sarah showcases Patagonia as a shining example of a company successfully integrating purpose and profitability, highlighting innovative ownership models that prioritize long-term mission. The landscape for businesses is complex, but there is always room to become true forces for good.
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Speaker 1:
Breaking news.
Speaker 2:
Breaking news.
Speaker 3:
It's the year of the chat box.
Speaker 4:
The latest setback for Climate Act. The latest Supreme Court ruling.
Speaker 1:
In the latest Supreme Court ruling, the court is set to redefine...
Carrie Fox:
Hi there and welcome to this episode of the Mission Forward Podcast. I'm Carrie Fox, your host and CEO of Mission Partners, a certified B corporation. And speaking of B corporations, we have a fantastic conversation with you today. So a few weeks ago, we hosted this fantastic Mission Forward live event, and from here through the end of the year, we're bringing you some of the conversations that took place on that day. Today, you won't hear me interviewing our guest, but you'll hear my colleague, partner and chief operating officer at Mission Partners, Bridget Pooley interviewing Sarah Schwimmer of B Lab. They have this fantastic conversation about the importance of knowing, upholding and centering your values in business, what that does for the workforce and what that can do for your impact. And I think there's a lot you're going to find really valuable and tangible and practical in this conversation. So stay tuned for a fantastic conversation with my colleague Bridget interviewing Sarah Schwimmer, and I'll see you back here on the other side.
Bridget Pooley:
My name is Bridget Pooley, I use she/her pronouns and I am a partner and the Chief Operating Officer at Mission Partners. Joining me in this conversation is Sarah Schwimmer. Sarah is the co-lead executive at B Lab Global, the nonprofit network helping to transform business and the home of the B Corp movement. Sarah brings a wealth of knowledge and global social impact to our conversation. She came to B Lab from Living Goods and previously served at the United Nations Foundation. B Lab is perhaps best known for its work certifying B Corporations, but that's really just the start of what Sarah and her team do. They are building a movement of B Corps to shift our global economy from a system that profits few to one that benefits all. At Mission Partners, we've been proud to be a B Lab certified B corporation since 2018. So we are especially invested in the work that B Lab is advancing.
And I know there are several other certified B Corps with us today who will be interested in what Sarah has to share. So with that, welcome Sarah. One of the big topics on everyone's mind today is trust specifically how much or how little trust we might have in business today and how that trust is directly connected to the role that businesses play in social change. So we always like to keep an eye on the Edelman Trust Barometer, and this year we saw 62% respondents stating that CEOs should manage societal change, not just issues within their business. From your perspective, Sarah, what are some of the forces that are driving that expectation? And in particular, I'm curious to know how you see B Corp CEOs navigating this.
Sarah Schwimmer:
Yeah, thank you for the question and thanks for having me here. Excuse me, I'm just getting over a cold here. Before I jump in, I just wanted to pick up on a couple of trends I think I'm seeing in the chat. I'm seeing a lot around community, a lot around learning. I heard a lot in the last session, a lot around courage. These really resonate for me and I think are really applicable to this question. I think first of all, what a great responsibility this is for our current and future leaders. Across my work at B Lab across my own career, I have seen this sea change in what we expect from businesses firsthand, and I think there are a few forces at play here.
So first I would offer some context outside of the business space, which is that we also are seeing in the Edelman Trust Barometer and in other surveys of note that trust and perhaps expectations of other societal norms, including our government, including the press, had they been a bit on the decline, I don't think that is good news. I think we can probably all agree on that. And I offer that as context for the increase in expectations that are happening on of society for business leaders. And so I think again, a huge responsibility, a huge opportunity.
We're seeing at the B Lab movement an increase in the number of business leaders who really want to drive meaningful change through their actions, but they may not necessarily know how to do it. Obviously, Bridget, Mission Partners, others here you are members of the Speak More community. You are now one of or two or three of nearly 10,000 companies around the world that have been certified as B Corps. The movement itself, this 10,000 number that's nearly doubled in just the past couple of years, just to give you an indication of the interest. And in fact, we've had so much demand and interest from companies trying to learn how they can improve and be better, do better by their workforces in the planet that we at B Lab have had to really staff up and look at how do we meet this demand. So a good problem to have. A few points that I would just raise for the reasons that we here from B Corps for wanting to pursue this certification and by doing so to change the way they show up.
And this was born out in research that we've done as well through lovers, consumers, employees, and investors. So we see in the consumer space across our own brand awareness studies that 56% of consumers say that they use different certifications to determine which products they might buy and which companies they support. And that number, that 56 percentage point increases with the lower in age you go. So again, our generations no surprise are really shopping with purpose where they can. The second point, employers, employees, we are seeing in our own research quantitatively and qualitatively that companies with a strong sense of purpose and who consider their workers as interested parties who really bring their workers into their success and different sometimes ownership models, these are companies that have a more engaged workforce. So we see good numbers on both employee attraction and retention. And then the third piece is around investors.
For me, this is perhaps the most exciting because this does mark somewhat of a shift that we're seeing and I think is safe to say it's not so much a trend anymore, but sort of an ongoing sort of evolution. And especially in this country in the US where we are seeing a political backlash to companies behaving in certain ways, taking into account environmental and social factors. This concept of woke capitalism, we are still seeing that investors are increasingly using environmental and social data as material investment factors. And in fact, NASDAQ just earlier this year made the decision to include data from our tool called the B Impact Assessment, which is the tool that companies will use to determine if they may meet our B Corp standards. NASDAQ is now including data from that B impact assessment tool in its own reporting tool. So we really see B Corp leaders making these decisions that are really centering the needs of their own stakeholders, not just their shareholders. And it's a movement that's growing in the B Corp space, but even outside the B Corp space as well.
Bridget Pooley:
That is so exciting to hear about. And I kind of want to hang on that point because you mentioned Sarah, the political atmosphere as well. And it's no surprise to everyone here in the US we've got the elections coming up in just a couple weeks, and I know that at Mission Partners as a B Corp, our B Corp model helps us live into our values and activate the team across civic engagement initiatives. So we give time off to vote, several of us serve as election judges and some of us have even run for and held elected office. But when I think about how the role that businesses play, you don't necessarily need to be a B Corp to live into that framework, but I'd love to hear what you're seeing from other B Corps who are actively engaging in this bridge building within a workplace and supporting civic engagement as we move into election season this year.
Sarah Schwimmer:
Yeah, absolutely. And I think just to double click on that point, you do not need to be a B Corp to behave in certain ways. Part of B Lab's approach is it's one around economic systems change. And so we do believe that policy and regulatory change is essential to build a more inclusive, equitable regenerative economy for all of us. And to get to that point, civic engagement is really essential. So we are focused in a few ways on this. Collective action is one of what I would call the secret sauces of B Corps. And this is really using business as a force for good by requiring acting beyond just one's own enterprise to look at what is the broader systemic impact that we can achieve. So for me, I think this really comes down to uplifting the role that HMS has. B Corps play a leadership role in fostering shared understanding, identifying and sharing solutions and implementing some of those solutions in their own businesses.
This also includes contributing to the public infrastructure that they themselves utilize and rely on for their success. And so in election years, like we're in right now, by serving as a stable source of information, encouraging employees and customers to vote as a way to exercise that freedom and to use their voice to shape a better future for themselves, their communities, their employees, businesses can really do that part to make sure their employees can vote safely. And I want to share a quick anecdote I suppose.
There's a B Corp in Florida, politically charged state. The B Corp is called Legacy Vacation Resorts. They're a Florida-based hospitality company. They've implemented several initiatives and also partnerships with other companies and B Corps and non-B Corps alike to ensure that employees will have the time and resources to actually get out and exercise their vote. They essentially passed a survey towards all of their employees to identify what might be the barriers to their ability to vote and how they as the employer could support that. And so with that in mind, they've created a number of new processes and partnered with some other businesses in the region to connect their employees to other businesses, other employees to broaden their own civic engagement. The other thing, the last thing I'll note is that our regional team, the B Lab US and Canada team does have some really great resources on our website. So I can make sure to drop that into the chat once we're done here as well.
Bridget Pooley:
Yeah, we use those and similarly ran a poll of our team to understand people's intention to vote and how we could support it. But I love the story about what's happening with Legacy Vacations in Florida. I want to go back, you mentioned investors earlier, and I think something else that happened this year is we reached a milestone around the Business Roundtable's decision in 20 to shift from a focus on shareholder primacy to a commitment that companies would lead those companies for the benefit of all stakeholders.
And a report came out this year that not much has really changed at those companies. So for example, I know shareholder returns are still a primary metric around incentive pay and governance documents haven't really been updated. We know that's important with our B Corp certification. So I'm curious about B Lab's thought process around how companies can benefit multiple parties. One of the things we've seen is a shift in focus from shareholders to a broader set of interested parties. It hasn't taken hold because there's not really a lot of consensus about what companies are sort required to do or what they owe those who aren't shareholders. So I would love to hear from you about how companies are thinking about that fall mandate and how that benefit is measured within B Lab.
Sarah Schwimmer:
Yeah, it's a great question and I think I appreciate that this is not... we're not kind of coming at this with rose-colored glasses on. So I think one thing that I will say, just to be the eternal optimist that I tend to be a few decades ago, we've started to sort of see this shift where our society started to believe that companies don't have to be behave this way. Companies do not have to be destined to maximize shareholder profit above everything else. That wasn't always the case, and it doesn't need to be the future. So we understand that businesses can and should be a force for good. Some members of some aspects of society are demanding that. We understand that corporate behavior also matters more now than ever. And so there is this corporate form around benefit corporations, public benefit corporations. This is intended to put purpose on par with profits.
Becoming a benefit corporation is an essential component of moving into your benefit... B Corp certification. It's also not enough. And so a lot of folks will probably have seen, I think was it last week, the week before OpenAI shared that they're moving from a non-profit model into a public benefit corporation. That's fine. It's still insufficient. And to your point, we've seen not enough has changed by just purely adopting that approach. And I will say that B Lab 20 years ago was instrumental in the passing of benefit corp legislation in this country. So there's nothing against benefit corporation status, it's just simply insufficient. And we look at how do businesses actually change their behaviors and then how do they show up for us. And so what we recommend and what our theory of change is rooted in is that you need a third party rigor.
And we have standards at B Lab that are one tool that are available to businesses that are looking to look at how they can bridge purpose and embed accountability into their decision making for the future. Not every company needs to become a B Corp. And in fact, I mentioned we've got about 10,000 B Corps are coming up on it. Over 300,000 companies around the world have used our tools. Many of them will never become B Corps, and that's not the point. They're using our tools to actually look at what can they learn and what can they embed in their own governance practices as an example. And so I think the highlight here is that we do need to move away from purely benefit corporation status and look at what is the third party measure, what is the level of rigor, what are the standards that we can apply to that as well. And that's at the moment, very much a voluntary choice. These are all opted businesses. We at B Lab do have, along with many other partners, do have in our aspirations that this moves from voluntary to required.
Bridget Pooley:
I love that vision. Well, as someone who uses the B Impact Assessment to evaluate what we do at Mission Partners, I can speak for sure to the rigor, but also that one thing that is so fascinating to me is you don't have to be perfect in every regard. So for example, mission Partners is a remote company, so we don't have a footprint that we can necessarily measure the way a big group like our friends Aveda down the street from us and down the street from me in Minnesota might have probably way more time that they're spending on an environmental standpoint. So I like the flexibility of it as well as the rigor. Well, I think we've got time for one more question, and I'd love to talk about mission, which I think maybe at first sounds a little out of place in a conversation about shareholders and governance and all of that.
But what we see, and I heard some of this in the chat as folks were reflecting on changes in leadership since 2014 as well, is that it can be hard for leaders to prioritize mission when they also need to prioritize profit. So that balancing of purpose and profit that you talked about, especially during times of crisis or uncertainty. And I'd love to hear from you, Sarah, how you've seen leaders successfully focus and stay committed to mission, to purpose without sacrificing profitability and maybe an example of a leader or two that strikes that balance for you.
Sarah Schwimmer:
It's tough. I think B Lab has been around for, as I say, coming up on 20 years now, so we've got some pretty good on how companies behave, how they're resilient, do they stay committed to the B Corp movement and to behaving and showing up as business as a force for good and the data is good. We see a lot of companies that have stayed with us. The number is growing. And I think the couple things that I would say here, this is a long-term game. What we're talking about here is taking a long view at what does change look like when we want to understand not just how my business and me as a CEO can show up, but then how do I dock in with other business leaders, whether it's the B Corp community or others, and how do I affect change outside of my own company, but stepping into my broader sphere of influence.
So changing this system does require constant iteration. It requires innovation, it requires a focus on performance improvement. And with that, it's really sort of a virtuous cycle that we can all have in promoting through our own actions as leaders, as workers within a company. A fairly maybe obvious example of this is Patagonia. Patagonia has been a B Corp certified company for years now. We actually... we worked with them and their founder, Yvon Chouinard, to pass benefit corp legislation in the state of California years ago. When they initially certified in 2011 I believe, they earned a score of 107. A score is essentially every company at this moment is assigned a score as they go through the certification process. They must meet a minimum of that. So they started, what, 13 years ago at a score of 107 out of about 200. Today, they have just recertified earlier this year at a score of 166.
So not everyone knows the ins and outs of the scoring system. What that means, one, it's positive. Two, it means that they have meaningfully changed a number of their practices to increase that score. They used the standards sort of what does good look like? And they used that as a North Star to look at what does it mean to be a leading global business. And they've done this while thriving and really growing their own customer base. And so I think the last thing I would say on that, and we're seeing lots of innovation around this as well, is Patagonia has also implemented a perpetual purpose trust. This is a form of alternative ownership. Happy to share more about that at some point as well, would encourage folks to look that up as well, or visit our website to learn more about this. There are many different forms of alternative ownership.
The reason I raise it is that we're seeing this as a source of innovation and the B Corp community is really kind of a very grassroots way of looking at what does this look like, what it feels right for their companies, what are they learning from one another, and how might they improve and replicate that. So it's really, I think when we think about this as leaders, it's a long-term view. And I think finding started... going back to the beginning, finding that community where we can be in community, but also learn and continue to improve is really important for us as individuals trying to lead the way.
Bridget Pooley:
And I mean that again is something we've seen in our experience with the B Corp certification is all of the examples, both kind of the more theoretical leadership examples, but also the real practical templates that can be used about how to incorporate some of that balance into how you operate as a company. So a policy on how to support working parents, for example, all the way to that, more theoretical leadership. There's something in here too for me, Sarah, about trust, which is where we started off our conversation and just celebrating the focus on mission, the focus on purpose and the trust that reinforces for consumers, for employees, for investors, when they see that through line of the mission of that purpose to a company.
Sarah Schwimmer:
I mean, we're seeing it more and more as well, and I could speak about this all day, so I will stop myself, but I think the signs are incredibly encouraging that the levers, there's trust and that trust is based on data. And so this is behaving in a different way as a business leader. There is good data around that as well, which helps make the case and build trust.
Bridget Pooley:
Yeah, I love it. Sarah, thank you so much for the time. I agree we could go all afternoon chatting about this, but I just want to really thank you again for your time and for the conversation.
Carrie Fox:
And just like that we are at the end of another episode of Mission Forward. If you heard something that's going to stick with you, drop me a line at carrie@mission.partners and let me know what's got you thinking. And definitely check out some of our other long form shows on the Power of Communications. Mission Forward is produced with the support of Sadie Lockhart in association with True Story FM. Engineering by Pete Wright. If your podcast app allows for ratings and reviews, I hope you'll consider doing just that for this show. But the best thing you can do to support Mission Forward is simply to share the show with a friend or a colleague. Thanks for your support, and we'll see you next time.
