Understanding Green’s Triple Bottom Line

The terms "C Corp" and "S Corp" tend to be pretty common in today's business discussions. Conversations about the B Corp, though, tend to be less common. B Corp certification is for businesses looking to demonstrate the bottom-line results of their environmental, social and financial sustainability efforts. Basically, achieving B Corp certification enables businesses to prove that they walk the talk when it comes to sustainability.

balancing sustainability and costGreg Christian, founder and CEO of Beyond Green, a Chicago-based sustainable foodservice consultancy, took the plunge, and his firm is now a certified B Corp. Recognized internationally and available for companies of all sizes, B Corp certification brings with it language and company bylaws that demonstrate more than just an awareness of environmental concerns. Literally, the B Corp structure provides the framework that builds sustainability into a company's corporate charter

The certification process, overseen by the nonprofit B Lab, involves more than 200 rigorous and detailed requirements, touching on such sustainable initiatives as recycling and composting; adding more bike racks; and using smaller, local banks, as well as simpler steps like two-sided printing. Any company from any business sector can apply. Of the more than 600 B Corps operating in the U.S., well-known companies include Method soap and Ben & Jerry's as well as others in the foodservice and grocery sectors. Consultancies and other firms like Christian's are also part of this group. As a result of the stringent requirements, applying for certification does not guarantee a company will earn it. Still, simply going through the process can shed light on areas for improvement.

"Many companies claim they are green, but you have to ask yourself the hard question: Is it actually in your corporate charter?" says Christian.

Indoctrinating "greenness" into an organization's DNA, so to speak, also ensures that any successors and future owners will continue to adopt green and sustainable policies and procedures. Christian points out the classic example of Ben & Jerry's selling the brand to Unilever while concerned about the long-term continuation of its sustainable practices and ideals. Earning B Corp certification helped ensure the company's "green" vision would remain intact.

The Triple Bottom Line

While traditional corporations focus on the bottom line (that is, profit), becoming a B Corp introduces another bottom line: sustainability. What many non B Corps don't always realize, Christian says, is that by lessening environmental impact and lowering operating costs through enhanced efficiencies in accordance with this corporate structure, companies can actually increase their profits in addition to simply driving sales and revenue.

"I call it the certified triple bottom line," says Christian, noting that becoming a B Corp offers more than just a powerful marketing statement and brand reinforcement. "One of the main reasons Beyond Green chose to become a B Corp wasn't just to tell the world; it was also to be able to play in the deeper end of the sustainability pool and save on operating costs in the process. Business school training always focuses on the single bottom line, but I could see more of a focus on that triple bottom line — profit, sustainability and social responsibility — in the future."

A common misperception is that becoming a more environmentally friendly business costs more money, but Christian says this isn't always the case. While many green products can cost double or triple that of traditional ones, those expenses can easily be offset by added efficiencies, like cutting down on paper for printing, turning down thermostats or reducing water and energy use.

"It's easy to say going green costs more money, but do we really know how much more? We don't if we don't really look into it," Christian says. "Before one of my clients became a B Corp, they were doubling up on compostable garbage bags. By simply switching to compost bins, which don't require any bags, we cut down on the need for more of those expensive bags in the first place. And when the client found ways to reduce the amount of waste it sends to the landfill, the number of trash bags it uses declined, too.

"Once you become a B Corp or even head in that direction, you start looking at everything differently," Christian adds. For example, one of his K-12 operator clients found that buying more sustainably produced beef cost 13.8 percent more, but by lowering waste, energy and other operational costs, the client was able to easily offset that extra investment.

"Since we stopped individually wrapping meals in plastic wrap and preparing more meals in bulk, this was another area where we balanced out those food costs," he says. The school also reduced the burger portion from 4 ounces to 3.5 ounces with barely a notice or concern. Phase two will focus on cutting more costs through efficiencies to increase funds for an on-site garden.

Sometimes, though, becoming a B Corp and adopting more green practices is simply a matter of doing the right thing. "I could easily externalize my costs by simply choosing to use Styrofoam and just watching it end up in the landfill without having to pay the extra cost for recyclable materials or composting," Christian says. "By not taking responsibility for my actions, I may see my single bottom line remain high for a while, but over the course of several years as landfill and waste hauling costs go up, then that impacts my bottom line in the long run. Essentially I will already be ahead of the curve when those costs do go up."

Ideally, the more companies that jump on the B Corp bandwagon now, the more impact they may collectively have on reducing large-scale costs like waste, energy and water.

Certainly, the marketing component is a powerful motivator for making the B Corp switch. "There is such a competitive advantage to being able to prove your greenness," Christian says. This is especially the case as consumers continue to grow more skeptical amidst growing greenwashing — the practice of exaggerating the environmental benefits of a company's products or efforts.

Measuring Green

In addition to adopting or homing in on more sustainable business practices, regular measuring and analysis of profit margins is an important part of the puzzle. "Becoming a B Corp forces you to measure in places where you haven't measured before," says Christian. B Corps essentially quantify greenness in clear dollars and cents.

For restaurants and other foodservice operations, that might mean something as simple as separating energy meters in the kitchen to track usage or developing an overproduction log to track waste. "By weighing all the garbage at every station we can see where we overproduced and capture that data to make changes," Christian says. "If the operation bought 100 pounds of ground beef but the production says staff tossed 15 pounds of it at the end of the day, that means this foodservice operator can buy and produce less."

When production costs are reduced, profits go up. Editing down the menu can also help cut waste and costs. At one school client, Christian cut down the entrée selection from six to just a few, including a vegetarian option. Despite these changes, the operator did not compromise customer satisfaction.

"The challenge in the foodservice community is always how do we serve great food sourced and produced sustainably, but within a budget?" Christian says. "B Corps help companies really figure out the steps to do so while also serving the environment and their local communities."

The B Corp

B Corp certification is to sustainable business what Fair Trade certification is to coffee or USDA Organic certification is to milk. B Corporations provide a framework for companies wishing to benefit societies as well as their shareholders. In order to earn certification from the nonprofit B Lab, these organizations must meet rigorous standards of social and environmental performance, accountability and transparency. Currently, there are more than 850 certified B Corps throughout 60 industries in 28 countries helping to define a more socially and financially sustainable way of doing business.

Schoolhouse Sustainability –Foodservice Style

Visit Greg Christian's blog and learn how the Beyond Green team worked with Nardin Academy to help this independent school make its foodservice program more sustainable. Greg continues to share his experience and lessons learned in this insightful blog.

 

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