How more companies can do good while doing well

The Dalai Lama recently spoke with a group of CEOs about “positive capitalism.” This concept illustrates companies who move forward but also make it possible for others to move forward.

“The global economy is like a roof over all of us,” said the Dalai Lama. “But it depends on individual pillars for support. Business needs a sense of responsibility to work together more cooperatively. We need positive competition: if I progress, they should too so they are not left behind.”

For-Benefit Corporations

There are several examples of businesses that are doing good while doing well.

The Greyston Bakery in Yonkers, NY, hires, trains, and houses people who are facing difficult life circumstances. The employees learn how to bake, and pick up personal and professional development skills along the way. Greyston even supplies a brownies to Ben and Jerry’s ice cream factory in Vermont. The company’s motto: “We don’t hire people to bake brownies; we bake brownies to hire people.”

In Easthampton, Massachusetts, Prosperity Candle trains recent immigrants how to make candles, and keeps them on as employees. They go from being on welfare, to supporting themselves and their families. And that’s the point. Says Prosperity’s founder, Ted Barber, “We are a for-profit company with the heart of a non-profit.” [1]

Doing Good While Doing Well

“B Corporations” have a double bottom line; they benefit society while making a profit. This double mission alerts shareholders that they will pursue their social mission even if it means a lull in return on investment.

For example, Patagonia, the American maker of sports clothing, has long been a B corporation. This allowed them to conduct years of research to invent a rubber derived from a desert shrub, not petroleum, to use in their products. [2]

Buy your eyeglass frames from Warby Parker. They give a pair of glasses to a person in the developing world for every frame they sell.

These companies recreate business models to be meaningful, not just profitable.Grameen Bank in Bangladesh was one of the first to adopt this approach by giving micro-loans to help people in poverty start their own small businesses. The rate of repayment has been so high that they have been able to re-loan the funds over and over, creating thousands of entrepreneurial small businesses.
Other organizations are shifting their business-as-usual missions to include a more conscious capitalism approach. As part of a larger sustainability goal, Unilever plans to give technical aid to small farmers in developing nations so they can join the company’s supply chain as dependable sources. Huge companies like Unilever can take a social mission to scale. Their goal: a half million small farms. [3]

Footnotes

[1] Ted Barber in Hannah Wulkan, “Easthampton-based business aims to provide marginalized people with gainful employment,” Daily Hampshire Gazette, June 23, 2014. page C1.

[2] Diane Cardwell, “Bottom Line: Earth,” The New York Times, Thursday, July 31, 2014, p. B1.

[3] Consider the arc of history at Unilever, with its roots in a margarine conglomerate in the Netherlands. As the grand-niece of one of that Dutch company’s founders told me, at the start of the 20th century, Margarine Unie was a bully, ruthlessly elbowing competitors in this new business niche (the formula for margarine, a lower cost butter substitute made from palm oil, was a fairly recent discovery) to take them over. In the 1930s Margarine Unie merged with another intensive palm oil user, the British soap maker Lever Brothers, to form Unilever. Fast-forward to the start of the 21st century, when Unilever is about to acquire Ben & Jerry’s ice cream. One of those at the top, an insider’s word has it, hopes compassionate DNA from Ben & Jerry’s idealism will infect the rest of the company. And lo and behold, a decade later I hear the new CEO, Paul Polman, announce a major business goal, to source raw materials from a half million Third World small farmers.

This article is published in collaboration with LinkedIn. Publication does not imply endorsement of views by the World Economic Forum.

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Author:Daniel Goleman is a psychologist who for many years reported on the brain and behavioural sciences for The New York Times

Image: Emma Rose of Britain (L) and Nils Westerlund of Sweden work in the office of the HowDo, a “how-to-do-it-yourself” app, start-up at the Wostel co-working space in Berlin March 18, 2013. REUTERS/Thomas Peter.