Putting the G in ESG: Businesses call for stronger governance ambitions

The businesses have joined forces under their joint commonality of being B Corps to sign and share a joint statement calling for stronger governance action across the ESG spectrum.

The statement calls on corporations to “align [their] businesses with the interests of society” and “create long-term, sustainable value for all”. It has been signed by multinational businesses Danone, Natura &Co, Bonduelle and Gerdau.

B Corp is a certification initiative whereby non-profit B Lab verifies companies across the globe to showcase that they are meeting the highest environmental and social performance standards, not only through their product or service, but across all aspects of their internal and external practices.

Today, there are more than 7,800 B Corps across the world in more than 90 countries that have made commitments to embrace corporate governance frameworks that require them to have a positive impact on people and the planet.

However, the businesses believe that more can be done to strengthen governance practices and that even well-meaning businesses may be de-prioritising the G in ESG in favour of environmental and social initiatives that don’t help the business align with its core purpose.

“Too often the G in ESG is forgotten,” Natura &Co’s global director of advocacy Charmian Love said. “But governance is instrumental if we are to create the conditions and culture which enables effective decision-making.

“These must align the short and long-term interests of shareholders, associates, suppliers, partners, clients (and other creditors) and, of the communities in which the company operates locally and globally, as well as the impacts on the environment”

A study from B Lab, the organisation behind the B Corp movement, revealed that 87% of Europeans think it should be mandatory for businesses to consider the interests of all stakeholders, rather than shareholders, in their decisions and strategies.

Additionally, a report from B Lab Global found that B Corps are more resilient in the face of sudden disruptions such as pandemics, which can protect workers and parts of the economy as a result.

However, a study last year from Morningstar Sustainalytics found that 46% of sustainability professionals view governance as the least important aspect of their ESG efforts.

B Lab is preparing to roll out new standards for certification and has posted strong support from across the private sector. The aim is to have the standards ready for a final review in late 2023 and implementation in 2024.

edie Explains: B Corp

edie has published an Explains guide for businesses, listing all the key steps, considerations and benefits for organisations that are aiming to become a certified B Corp.

What businesses can become a B Corp? How does the B Corp process work? What is the B Impact Assessment? What are the business benefits of becoming a B Corp? What happens after an organisation has certified?

This new edie Explains guide, produced with support from Seismic, answers all of these questions and more.

Click here to download the report.