When we started Goodfood, a meal delivery company, several years ago, we knew we wanted to give back to the community eventually. I say "eventually" because the demands of getting a new venture off the ground are extreme.
Co-founder Neil Cuggy and I noticed footwear company Toms and eyeglass maker Warby Parker giving away products to those in need based on every sale.
But we had no defined notions of where our "giving back" would lead. Certainly the idea of becoming a "B Corp" was not top of mind.
B Corps are for-profit companies certified by the non-profit B Lab to meet rigorous standards of social and environmental performance, accountability and transparency. Fast Company magazine named B Corps one of the "game changing" ideas of 2016.
Somewhat serendipitously, a few of our investors turned out to be B Corps. These included the Business Development Bank of Canada and edo Capital. After conversations with edo's founder Hamnett Hill, we decided to take the plunge a few months ago.
Goodfood now donates a meal to schools with children in need every time someone purchases a box of food via our subscription service.
We had concerns of course. The overriding issue was around how we could implement the necessary changes during a period of unprecedented growth.
Becoming a B Corp isn't easy – it involves navigating a road strewn with roadblocks and red tape. The B Corp process begins with a lengthy questionnaire aimed at assessing a firm's impact. Impact is assessed across a range of factors, including how it treats employees, its effects on the communities in which it operates, environmental impact and long-term prospects. Out of 200 points, a company must score at least 80. The ranking is subject to an annual review, and companies that drop below 80 lose B Corp status.
By donating meals to schools in our delivery area in Ontario and Quebec, this helps our "impact in the community" score. However, it is also incredibly important to me personally. I was inspired by my sister's PhD research, which showed that children who ate breakfast performed better in school, were less hyperactive and less prone to acting up in class.
Most companies will have issues explaining the business value of doing good to a board. Luckily, our board members were already B Corps, but my partner is a highly pragmatic and practical guy. He raised excellent questions about our ability to execute on the necessary initiative while managing growth. There's certainly a cost associated to better-business practices – staff time gets zapped on reporting, senior executives are stretched figuring out ways to make systems more environmentally efficient, and new purchases have to be made to upgrade infrastructure. However the benefits far outweigh the costs at our company.
For example, it's a powerful tool for recruiting and retaining top talent. Millennials in particular are showing more interest in working for companies with a purpose that's greater than profit. We've had better success attracting high-end talent from this critical demographic.
Becoming a B Corp also holds a corporation to an incredibly high standard in terms of transparency. We were initially apprehensive about the work involved in reporting on activities to a big range of stakeholders, vetting suppliers and partners, and keeping our employees in the loop (all things required of a B Corp). In truth it takes time, but the impact on a business is profound.
One example involves our financials. We now regularly gather our entire team and let them know about bottom-line numbers contained in our financial statements. Many employees had no idea how to even read statements, nor had they any use for ratios and other analysis. What's happening now is they're becoming better business people and more entrepreneurial as a result. I'd never have guessed this would be an impact if I hadn't seen it with my own eyes. It's quite incredible.
In our experience, doing good is simply good for business. Moreover, it feels great to know the firm we've built is having an impact beyond simply returning cash to investors and owners.
Jonathan Ferrari is cofounder of Goodfood, a Canadian meal kit subscription service.