Companies are Agents of Transformation and Must Take on This Responsibility

I believe that companies are, above all, agents of transformation. We all work at an intersection of economic, political, social and environmental dimensions and have either positive or negative impacts on all of them.
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After becoming the largest B Corp in the world, one of Natura's founders talks about being part of a movement trying to redefine success in business and build a more sustainable society.

What is the role of companies today? What does it mean to be successful in business? What are the right measures of success? I pretty much believe, as everyone in the B Team does, that business must succeed beyond the bottom line. More important than profits is how you get to them. Measuring financial earnings and losses only is definitely not enough and has led us astray from creating a better world for all.

Make no mistake: we are standing before the largest environmental threat ever faced by humanity. We have serious challenges regarding climate change, unsustainable use of natural resources, water scarcity, loss of biodiversity, forests and farmland. Not to mention the huge inequality still prevailing in several parts of the planet.

By not taking on their share of responsibility and focusing solely on short-term outcomes, companies have certainly contributed to this crisis. On the other hand, perhaps there's no other institution better placed in the world to lead the transformation we need than business, for its ubiquitous presence in people's lives and capacity to set the example. Today nearly seven billion people on our planet are either interacting with companies or consuming products made by them.

Of course, business cannot do it alone. We need a mobilized and active civil society using its purchasing power to demand sustainable products and practices. It is also essential that governments commit to the future, creating fiscal and regulatory conditions for sustainable policies to thrive. However, business forces such as entrepreneurship, innovation and sound management must not be neglected. If used long-sightedly, they will become important tools for leveraging social and environmental transformation.

A good example of this is the B Corps, an expanding global movement that, alongside The B Team, is taking on responsibility and promoting integration of financial, social and environmental results. At the same time they are encouraging others to follow suit. Last December, Natura, the cosmetics company my two partners and I founded 45 years ago, became the first publicly traded B Corp in Latin America and the world's largest based on sales and number of employees. This is a big deal for a mature company like ours that has 1.5 million independent salespeople and over 100 million consumers worldwide. It reinforces our values and beliefs, indicates that we are on the right track to help building a more sustainable society and stimulates us to further improve our policies and practices.

All the B Corps are certified by Pennsylvania-based non-profit organization B Lab. They evaluate the candidates in five main areas: business model, community, environment, governance and employees. When we first heard of the lab, we immediately started wondering how far we could take Natura and what changes should we make to increase our odds of obtaining certification. We were cautious at first and took it as an internal challenge, but it turned out the company was well prepared and, with few adjustments, Natura managed to achieve good results. More importantly, the process helped us identifying several opportunities for improvement that are already being taken.

It's no exaggeration to say that the B Corps are helping to redefine the concept of success in business. This cause goes hand-in-hand with Natura's journey in the last decades. Most everything that the company has made so far stems from the early 90s, when we went through a restructuring process. The other two founders and I sat down to discuss our personal values and what we really believed, and how could we translate these values and beliefs into what we wanted for the business. It was a genuine psychoanalytic process. We had this passionate belief that all things in our planet are interdependent, and that companies are living organisms, which could and should work to create social and environmental value. So we set out to work and figure out how to do everything in business based on these values, from developing products to relating with customers and suppliers.

I believe that companies are, above all, agents of transformation. We all work at an intersection of economic, political, social and environmental dimensions and have either positive or negative impacts on all of them. It's about time for us to take this responsibility, acknowledge our severe flaws and imperfections and make changes (radical, if necessary) to our businesses so that they operate within appropriate social and planetary boundaries. We can certainly build upon many of the positive aspects of business to provide solutions for our social and environmental gaps. But at this moment, if we are still to create a more sustainable and equitable world for all, we must do it quickly and boldly.

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