The Labour party needs to build the trust of businesses, and voters need to witness Labour doing so. The party cannot afford to be seen as anti-business and it should embrace the commercial world to make the economic landscape work for the public. It goes without saying – this might just help Labour win elections too. At the same time the party must always stick to its values – constantly emphasising the vital importance of social value and enterprise over greed. The good news is, this is something that the whole party can agree on.
The concept of social enterprise encompasses a variety of initiatives and has the capacity to transform the United Kingdom economy to make it one of the most progressive in the world. Excitingly, if enough noise is made at events like the World Economic Forum, perhaps it can transform the global economy as well.
Whatever form an organisation takes, it can call itself a social enterprise if what it seeks to do is genuinely put the interests of the community and the public benefit at the heart of its commercial endeavours. Labour should make this a bigger part of its political narrative – it presents an opportunity for Labour to promote business in a way that feels palatable and legitimate.
Couched in very simple terms, organisations can go the whole hog and forgo profit to become charities. Some look for a place in between, where they balance the desire to make a more modest return while having a meaningful impact on society, such as community interest companies. Others will wish to retain many of the hallmarks of a traditional profit making company, but now seek to increase their positive influence in society.
Labour can and should be an influencer for the latter category of businesses by congratulating and encouraging the ‘B Corp’ movement; a project designed to promote the constructive impact businesses can have on their communities and environment.
The B Corp movement, which originated in the United States, promotes an alternative vision for the role of business in society – one where businesses benefit members whilst also solving social and environmental problems. A B Corp is a for-profit business that meets a series of requirements designed to ensure it has social and/or environmental outcomes as part of its mission. This is heavily consistent with a Labour vision of commerce. The strapline of B Corp is that ‘B Corp is to business what Fair Trade certification is to coffee’.
With Fortune magazine describing B Corps as one of the Top 5 Business Trends of 2016, some of the world’s major undertakings such as Ben & Jerry’s and Natura are already well ahead of the curve. Other commercial giants are taking an interest too; Unilever’s CEO, Paul Polman, has committed two members of his senior leadership team to the initiative. Labour should take the opportunity to show its business credentials and promote this extremely promising development.
The movement launched formally in the UK in September 2015. A new charity has been set up called B Lab (UK): established to help businesses through the process of applying for B Corp status and certifying those who make the grade. To certify, a business must meet three requirements. There’s the performance test – a rigorous set of standards measuring the overall impact of a company on its stakeholders. The standards are developed by an independent committee with industry and sector expertise and include the following broad sections: governance, workers, communities, environment and impact business models. Next there’s the legal test requiring the organisation’s constitutional documents enshrine a commitment to promote the success of the business for the benefit of its members but also to have a material positive impact on society and the environment. Finally, all B Corps need to sign the B Corp Declaration of Interdependence which sets out a commitment to all stakeholders.
There are over a 1,500 B Corps across 42 countries and the movement now has the potential to grow significantly in the UK. If Labour takes the lead on this, it could be tackling misperceptions held about the party, while helping to progress our economy to one that gives more than it takes.
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Tom McNeil is director of the Human Rights Act Campaign at the Labour Campaign for Human Rights. He tweets at @McNeil_Tom
This piece forms part of a guest-edit of the Progress site by Stephen Kinnock MP, covering the discussions at Davos on the economy, business and the World Economic Forum’s central theme this year of ‘The Fourth Industrial Revolution’. Follow the guest-edit today here
