UK dealer Red-Inc has taken the concept of future-proofing to a whole different level. B Corp certification has undoubtedly helped it get there – by Heike Dieckmann
The scope of corporate responsibility – today perhaps best summarised under the umbrella term of Environmental, Social and Governance (ESG) – has changed dramatically over the past few years. For companies ‘wanting to do the right thing’, it’s an ever-moving – and ever-expanding – goal. Comprehensively addressing the issues is complex, to say the least.
Broad framework
Unlike accreditations by Science Based Targets initiative (SBTi), EcoVadis or Blue Angel, for instance – which delve deeply into specific topics such as carbon reduction and climate action – B Corp certification comprises a framework that investigates organisations against a broad set of criteria, not dissimilar to ESG reporting processes large corporates may use. Currently – and this is under review (see ‘Certification in motion’, page 40) – the five impact assessments for any company seeking certification are: governance, workers, community, environment and customers.
The B Corp, short for Benefit Corporation, movement has gathered considerable momentum in recent years – arguably to its slight detriment, hence the depth of the review. B Lab, the company behind the certification, started out in the US in 2006 by three friends who shared a vision to make business ‘a force for good’. The initial cohort of firms – 82 of them – was certified as B Corps in 2007. Since then, this number has risen to over 8,000 in 96 countries.
The first business products reseller in the UK to attain B Corp status was Sussex-based Red-Inc. The dealer was founded by CEO Adam Huttly in 2008. Huttly is passionate about the environment and, from the outset, had a burning desire to challenge the purely transactional, pile-it-high-sell-it-cheap traditional dealer model.
He says: “I wanted to build a company that was fabulous to work in, to work for, and that was incredible for our clients. I want to work with our customers, not for them. It was about elevating what we do as an industry – way beyond selling stationery. Today, hardly anything we do revolves around the products we sell despite the fact we’re still a business supplies reseller. It’s about cultural change, about educating clients and having engaging conversations to achieve goals.”
Red-Inc’s initial journey was very much driven by a sustainability agenda and there was no hesitation in pushing boundaries. Next-day delivery, for example, was a complete no-go as Huttly was adamant about reducing the carbon footprint of deliveries. Imagine the faces around the negotiating table at a time when next-day delivery was the essence of customer service.
Convincing clients they were dealing with a really good company was difficult. “With so many elements in a business, it’s hard to wrap up ‘being good’,” states Huttly. “Anyone can write their own reviews, can’t they.” Discovering B Corp in 2015/16 and going down that route provided the validation needed. “B Corp status evidences due diligence and credibility – before customers even get to know us, they are aware how our business is being run from top to bottom, inside and out.”
Cruel to be kind
The B Impact Assessment (BIA) is tough, there’s no doubt about it. The five impact areas scrutinised can add up to a possible total of 200 points. A company needs to accrue a minimum of 80 points to ‘pass’ – and these need to come from all five cornerstones; none can be left out.
Says Huttly: “The first time you go through the BIA, it’s overwhelming. When I initially looked at it in 2015, it was too much and I left it. But I loved what it represented, so went back to it a year later. And we actually sailed through it and received certification in three months. The first score we achieved was 85.2.
“From the start, we did really well in the environment section because that was our initial driving force. Having said that, when we went through the process, we recognised that we were essentially a B Corp already without realising it, as we had built so many other elements into the business that I felt strongly about – social impact, charity, community – all the things which help make up a B Corp.
“It was interesting because we were always a bit of an odd entity in our industry and didn’t know quite how to frame what we were doing. Someone once called me a ‘tin pot eco warrior’ – it wasn’t meant as a compliment. Others questioned how we could possibly be a commercially viable business with our ‘attitude’.
“B Corp validated our efforts and has done so ever since. There’s no resting on your laurels once you get certification – it’s an ongoing process and certainly not a badge you can display and then forget about. Our third and latest qualification this year came in at 105.5 points which we’re very pleased about.”
Joint effort
Going B Corp is a leadership decision, but the actual process only works if every single member of staff is completely invested – this naturally seems an easier feat to accomplish in a small business supplies reseller than in large B Corps such as Ben & Jerry’s or Coutts.
In the UK certainly – the country with the largest certification uptake after the US – it is most prominent in the SME space. These are companies, often start-ups, with a mission – similar to Red-Inc. But not exclusively so. Bates Wells was the first UK law firm to be B-Corp certified back in 2015, with its third certification occurring last August with an impressive total score of 140.2.
The challenges for established – and larger – organisations are different too. They typically have more complex – often traditional if not antiquated – business models and shareholder as well as stakeholder responsibilities.
Cost and resources are other factors for anyone seeking certification and neither should be underestimated. Help is at hand to assist organisations through the complex and rigorous procedure, be that via agencies or consultancy firms. Needless to say, this adds further to the cost.
Red-Inc manages the process completely in-house. “Getting a score of over 100 is pretty good and maybe we could do even better if we employed someone to do it for us, but that’s not what it’s about for me. It’s not a competition nor a race; we naturally want to do better as an organisation and we want to learn,” states Huttly.
Game changer
Broadly speaking, having B Corp status changes the conversation – with existing and potential investors, employees, and most definitely customers. As regards the latter, this is reflected in the type of clients Red-Inc now has. For a small independent dealer to have accounts that include the likes of the Big 4 and global law firms is unusual as much as it is impressive.
It starts with getting a foot in the door. B Corp helps with that as it proves due diligence, transparency, and, again, the desire to ‘do good.’ You also end up with a great databank of useful information. This, says Huttly, can be turned into marketing material. “We know exactly what our carbon footprint is, have measured purchased goods and services, etc. – it’s all data to tell our clients. We can also help customers with their ESG goals – it’s become part of our remit. It puts you in a great position of knowledge and power.”
What it most definitely does is change the conversation from purely transactional to informational as well as ethical. “Take one of our clients. It’s one of the biggest companies in the UK and has a sustainability team that looks very closely at many of the issues B Corps address. When we are in meetings with this customer, we are not treated as a supplier but as a partner. We never talk about pens and paper in terms of how much do they cost and can we reduce our prices a bit more? Instead, we brainstorm and are asked questions such as ‘what better products can we buy from you and in what areas?’; ‘how can you help us fulfill our sustainability commitments?’”
“With another customer, a national UK law firm, we now have quarterly deliveries to four of their sites. That’s a £14,000 ($18,000) stationery order with one delivery cost – times four. What an astonishing carbon footprint reduction.”
“I do a lot of talks to the SME market, and to most people ESG and sustainability are like a foreign language. They say things like, ‘It’s not relevant,’ or that they only have a small business/dealership. It will be relevant, I have no doubt about it. Sure, they might not be dealing with large corporates, but they may be dealing with their catering company, and when that company says to everyone, ‘By 2025, we want everyone we deal with to be at least aligned with science-based targets,’ they will start losing out.”
Securing the future
Ultimately, Huttly is convinced that Red-Inc’s approach is future-proofing the business. He says: “We’re dealing with some big companies which are charging ahead with their ESG efforts. We’re already seeing these really complex tenders; supplier engagement forms that ask whether we’re measuring our carbon footprint, Scope 1, 2 and 3, etc. This will have a trickle-down effect on the industry as a whole and how and what products are purchased. It might not be this year or next, but somewhere along the line, it’s going to have an impact.”
Red-Inc is still a commercially-oriented office supplies reseller. It has just reframed how it goes about its business and turned its back on cold calls, undercutting competitors, and eroding margins. Does it have to be a B Corp? As Huttly admits: “We’re less defined by it now, but it’s a wonderful framework to work to and it does push you to constantly do better. Importantly, it pushes itself to do better too.”
Certification in motion
B Corp certification has always been an evolving endeavour as it seeks to address and incorporate climate and societal developments, changing regulations, as well as expectations. But while improvements have been made to the standards since the movement began in 2006, the core aspects of the B Impact Assessment (BIA) have remained consistent – including the overall pass mark of 80.
In response to community and stakeholder feedback, B Lab first announced a review of the current performance requirements at the end of 2020. Since then, there have been a string of consultations, proposals, and feedback requests. It is expected that the revised draft standards will be approved by the end of 2024. The standard content will be published next year, with the new BIAs to be launched by 2026 at the latest.
Certification will certainly not get easier, according to Red-Inc’s Adam Huttly. “The world has changed dramatically since COVID. Just take work-from-home practices – they have put an entirely different spin on carbon footprint reporting. There have also been huge shifts in employment law, in climate legislation, diversity, and equality.
“B Corp assessment has to evolve, not just to address emerging issues, but also to protect the standard and movement per se. There have been a few cases where companies with B Corp status have been exposed as not being quite as squeaky clean as they’ve claimed. This needs to be eradicated to maintain maximum credibility.
“The new standards are going to be even tougher. For a start, the five current BIA topics will be extended to nine. Within them, there will be added or altered strands such as government affairs and collective action, advocacy, and fair wages. I’m excited to see how all these fit in with what we’re doing at Red-Inc. Continual due diligence, education, and the pushing of boundaries – it’s the right thing to carry on doing.”