A decade ago, when I first heard the term “B Corp”—a designation for companies that commit to pursuing not just profits but also purpose—I was skeptical. At the time, I was CFO of Cabot Creamery, one of the largest dairy cooperatives in the United States, and a great many questions ran through my head: Was this just another certification—like the Real milk seal and the Real Vermont seal that we’d already earned? Would the customers who bought our cheese and other products really care about this new label? What kind of burden would it place on our farmers, who, owing to our cooperative structure, were also our shareholders? How much work would it create for employees? How much would it cost us—up front and on an annual basis? And why on earth was it called a B Corp when it could be an A? That made the whole thing sound second-rate.
The CEO of Cabot Creamery on Beating Sustainability Benchmarks
As a 100-year-old cooperative of dairy farms with shared production and distribution resources, Cabot has long championed a different kind of capitalism: one that values good governance, the environment, the community, employers, and customers as much as it does profits. But a marketing chief suggested that the company do more than track and report on ESG measures—that it commit to those five pillars of sustainability by applying for B Corp status, a designation given by the nonprofit B Lab to mission-driven companies that meet or exceed all its criteria.
Although the process lasted two years, Cabot passed on its first try and continues to push its scores higher. This article offers lessons for companies trying to do the same or simply to improve their ESG performance: Listen to your in-house futurists; don’t shy away from being first in your industry, sector, or geography; and trust that success will come when you work together for the common good.