Thank you, Mr. Chair, and good afternoon, everyone.
Good afternoon, dear friends.
I greatly appreciate the invitation to participate in this conversation today. I'm only one person sitting before you, but I know that my remarks are an accurate reflection of the options and experiences of 130 certified B corporations across this country and the quickly growing market of impact-driven entrepreneurs who can be found in cities, towns, and villages throughout Canada.
I'm excited that the committee has chosen to include this perspective as part of your study on trade policies that will best support Canadian SMEs as they start, scale, and create the well-paying, sustainable jobs of the 21st-century Canadian economy.
I have a few bits of quick context for my comments. First, it's important to recognize the role of the MaRS Discovery District in this work. Second, I'll speak to exactly what “B corp” is here in Canada and beyond. After that I'll unpack a couple of direct policy implications that you may want to consider.
I'm based out of the MaRS Discovery District in Toronto, specifically within the MaRS Centre for Impact Investing. MaRS opened in 2005, under the visionary guidance of the late Dr. John Evans, as a platform to accelerate the kind of Canadian-based innovation that will help build our nation's new economy and support society at large. Within this mandate, the Centre for Impact Investing is poised and tasked with the mobilizing of private capital for public good. As a part of this mission, MaRS CII became the first global partner organization in B corp, the benefit corporation movement, in 2010.
B corp started in 2006 out of the U.S. with a commitment to providing transparent third-party metrics around the social and environmental impact of businesses of every shape, size, sector, and geographic location. B corp certification provides the same sort of accountability as a LEED building certification or an organic verification, but rather than focusing on one kind of practice area, B corp provides accountability around the impact of an entire company, from worker treatment to community involvement, from environmental footprint to governance and transparency. The big idea here is that while government institutions and non-profit organizations clearly have a role to play in ensuring the social and environmental well-being of our society, we'll actually need to expect more of our business community if we are to successfully face the ever-growing, complex problems that confront us in the century ahead. Even if governments and non-profits use their finances at an efficiency rate of 100%, it would only account for roughly 20% of global spending, and 20¢ on the dollar isn't good enough anymore. To overcome the problems we face, we'll need to engage the innovation and the energy of some section of 80% of global capital that is held by for-profit businesses.
The more practical and immediate reality is that throughout the business world, we measure the things that matter to us. If we are ever to take things like community involvement, worker treatment, or environmental sustainability seriously, we'll have to move beyond excusing these things as nice but fuzzy intangibles. We believe there need to be standards of measure that will help consumers, investors, workers, and governments to delineate between good marketing and truly good companies. B corp seeks to create this sort of measurement that serves to be both rigorous to the applicant while providing instant, easy-to-understand clarity for external stakeholders and observers.
Over the past several years, B corp has created tools for the investment community used by the likes of such global institutions as Prudential, J.P. Morgan, UBS, and others, as well as Vancouver giants like Vancity Capital and impact investment guru Joel Solomon's renewal fund. We've created partnerships with some of the world's leading business schools, such as Columbia, Yale, NYU, and Northwestern, because these academic trusts have seen a clear, growing trend towards impact-driven business within their student bodies. Most importantly, we've built a community of more than 1,200 businesses in 38 countries across more than 120 different sectors that have publicly declared, measured, and reported on their commitments to community, to workers, and to the environment, each calling themselves certified B corps.
That last number of 120 sectors is the figure that I find most compelling, because 120 sectors is not by any stretch of the imagination a niche. Within 120 sectors we have some version of most any kind of business you can think of, from conscious health food to sustainable junk food, from community newspapers to green energy suppliers; dish soap, tea bags, law firms, and ad agencies. We have some basic rules against weapons of mass destruction and child labour, but otherwise you're likely to find a B corp in nearly any field you can think of. These are good businesses. They make good money, and they solve some of society's pressing problems along the way.
You can find these impact-driven companies in the Canadian Prairies, where Step Forward Paper is revolutionizing an industry through the development of an affordable wheat straw-based paper. You may wear one of the lapel pins that I heard the Government of Canada gave to every MP last year in support of Lucky Iron Fish, a Guelph-based business that's working to end iron deficiency, which is a major maternal health issue in the developing world.
In the west, you might drink Ethical Bean Coffee from Vancouver in the morning, or grab a lunch at the iconic Save On Meats deli in Vancouver's downtown eastside. In the Maritimes, it's hard to miss Pickaroons brewery. Their beer is giving back a portion of revenue to non-profits and community organizations across New Brunswick. All of this is to say that B corps are everywhere.
If you've never heard of the official title before, I can almost guarantee you that a B corp has already touched your life in some way, shape, or form. Beyond some of the really big names, like Ben and Jerry's ice cream, Patagonia clothing, Beau's All Natural beer down in Vankleek Hill, or Trico Homes, there are impact-driven business leaders making significant money while making an amazing difference in the communities around us.
While I believe the stories behind these companies are compelling to average citizens all across Canada, I think there should be specific interest within this committee because of these businesses and tens of thousands of other SMEs across Canada. They aren't operating within a bubble. We operate as part of a global market and we ignore global market trends at our own peril.
I don't want to get too caught up on dry facts and figures, but I will share a handful of data points with you, not because any one of these observations is absolute, but because taken in sum it presents a clear narrative. In North America, 70 million people self-identify as conscious consumers, and 73% of consumers at large care about the company and not just the product when making a purchasing decision. Also, 90% of consumers say that companies must not only say that a product or service is beneficial, but they must prove it. The reason they have to prove it is because IBM's annual trust study says that only 17% of consumers trust manufacturers.
All of this is playing out in a reality where 75% of the global workforce, by 2025, will be comprised of millennials who look like me and who report that they want to work for organizations that make a positive contribution to society. If all of that weren't incentive enough, we also know that companies with higher levels of employee engagement and strong corporate culture outperform the S&P 500 by more than twofold.
The narrative I see emerging from this data set is clear. First, the market pull towards impact-driven businesses exists, and third-party accountability is desired and necessary. Second, it is within this market that we've seen 28 U.S. jurisdictions—27 states and D.C.—pass benefit corporation legislation over the past four years. Legislators of all stripes have been behind this push, as evidenced by the fact that in 18 of these states the votes were unanimous to pass that legislation. Through this legislation, companies can now incorporate their operations as B corps, the same way they would a C corp, an S corp, or an LLC.
As a general sign of support for Canadian SMEs within this emerging global market, which I believe Canadians are well positioned to lead within, I would urge the members of this committee to take seriously the potential of this distinct market for Canadian business; take seriously the need for firm definitions around terms that seem hazy, like social entrepreneurship, social enterprise, and social procurement; and, please take seriously the need for clear and accountable metrics whenever we're evaluating claims of impact.
For a more long-term policy decision or conversation, I'd ask you to consider the potential implications of Canada's number one trading partner soon having 40 to 45 jurisdictions with a set of consistent definitions around these impact terms, consistent mechanisms for measurement, and consistent accountability structures established through benefit corporation legislation options.
As the Canadian Bar Association recommended in their response to the 2014 review of the Canada Business Corporations Act, our team also believes that federal benefit corporation legislation in Canada would be a powerful sign of support for, and stimulant of, impact-driven business in Canada.
We, at B Corp Canada, appreciate the opportunity you have afforded us in speaking here today. Please consider me a resource on the issue for the rest of our short time together here, and consider our team as a continuing asset for each of you and your teams going forward.
Thanks for your time, your energy, and your consideration. I welcome your questions both now and in the future.
