A growing number of businesses aim to make a positive impact on society and the environment while pursuing profits. Community interest corporations are multiplying as certification becomes more widespread.
Certified B Corporations, or B Corps, especially, have set a new example — of companies that meet rigorous Environmental, Social, and Governance (ESG) standards. The global food company Danone North America (NA) was an early mover and achieved B Corp Certification in an impressive timeline.
What better than a window into the mind of Danone’s leaders to extract key lessons for food companies seeking B Corp Certification? Let’s delve into Danone’s experience of becoming the largest Certified B Corp in the world.
The Path to B Corp Certification
Danone NA celebrated its first anniversary as a benefit corporation in 2018. The same year it announced the achievement of B Corp Certification two years ahead of schedule. Danone scored 84.9 out of 200 total available points and surpassed the score of 80 required for B Corp Certification.
The road to certification was not without its challenges. One of the many major hurdles was the need to answer over 1,500 assessment questions as part of the B Impact Assessment (BIA). A gruelling process for a company like Danone that encompasses five separate legal subsidiaries. Strong local management team leadership created the momentum needed to lift all the other ships.
Taking on the challenge of certification meant building on DanoneWay. The internal system was launched in 2001 to track the Dual Project initiatives and key performance indicators (KPIs). This was a snowball effect towards greater sustainability practices and eligibility for certification.
Danone owes its continued shift towards greater ESG accountability to former Danone SA CEO Emmanuel Faber. Thanks to his efforts and those of Danone’s “founding fathers” (like Antoine Riboud), the Dual Project was top of the agenda. By connecting this work to the BIA, Danone developed an open-source model for all companies.
Danone integrates the United Nations Sustainable Development Goals (SDGs) into business objectives. A strategy that further fueled their pursuit of certification and demonstrated an early commitment to being a force for good.
Changes Required for B Corp Certification
To qualify, food companies must undergo a thorough ESG assessment through B Lab, the non-profit organization behind B Corp. The BIA tests for a wide range of criteria across various business units. Supply chain impact management, environmental life cycle and community investment are covered.
A separate disclosure questionnaire is typically the second part of certification. This time, the questions measure the negative impact of the business.
Food companies must align their goals and practices with the B Corp framework. By promoting sustainability, ethical sourcing, employee well-being, and community engagement. By embracing these principles, operations improve and contribute to a better world.
A shared understanding of B Corp principles throughout the organization is essential. Danone achieved this with workshops and introductory materials to educate employees about B Corp. This meant employees recognized their individual contributions and became active drivers of change.
B Corp is a company-level certification. As such, the assessment of a parent company includes subsidiaries in which it owns more than 50% of the shares and has controlling interest. Brands of certified parent companies must meet requirements to use B Corp logos and language.
For instance, as of early 2018, International Delight, Danone’s coffee creamer brand could not use the Certified B Corporation logo. That is, until late 2018, when it achieved Non-GMO Project verification.
The Right Mindset for Transition
Adopting the right mindset is crucial for a smooth transition towards B Corp Certification. The certification should be opportunity for continuous improvement, not a checklist exercise. Danone’s focus was not solely on achieving a high BIA score but on becoming a better business by implementing positive changes.
The company merged different business units and departments for organizational transformation. Integration decisions were guided by BIA principles. From there, discussions and collaboration flourished. This led to a better understanding of individual processes and the identification of areas for improvement.
Overcoming Challenges
Danone faced unique challenges during the certification process. B Lab initially focused on smaller companies. So their scale and complexity called for adaptations to the certification process. For example, the online BIA tool only allowed the creation of a limited amount of user accounts. Danone had to build an offline system to accommodate a larger number of employees involved in certification.
Other logistical challenges arose from the structure of B Lab originally unfit for larger companies. B Lab’s independent Standards Advisory Council developed recommendations for multinational certification since Danone.
Future Aspirations
Danone’s journey to B Corp Certification does not end with achieving the initial certification. The BIA serves as a baseline for continuous improvement and a pledge to go beyond 100 points in its future assessments.
Danone aims to drive ongoing improvement across its operations. After the BIA, the company had a clear understanding of areas where they lack data or systems to track progress. They even decided to incorporate the BIA into its internal reporting systems.
Now Danone SA, the global entity and parent company of Danone NA, has embarked on its own path towards full B Corp Certification by 2030.
Lessons Learned
Danone’s experience offers valuable insights for food companies aspiring to certify. The key lessons learned are:
- Creating a shared understanding of B Corp principles
- Aligning goals with sustainability frameworks
- Embracing continuous improvement
- Overcoming challenges through collaboration and adaptability
There is a revolution happening in the food industry and in how to run a business. Through the B Corp movement, food businesses like Danone lead the way in driving positive change and inspiring others. Certification is a win-win: enhancing business practices while committing to a sustainable future.
Source
Danone North America: The World’s Largest B Corporation (2018) — A case study by Christopher Marquis, Samuel C. Johnson, Professor of Global Sustainable Enterprise at Cornell University and Faculty Associate in Social Innovation and Public Policy at the John F. Kennedy School of Government, Harvard University (HKS) and Effie Sapuridis, Research Associate at Cornell University.
