Discover how to build a socially and environmentally responsible business that benefits both people and the planet in this insightful episode.

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Welcome to the 2X eCommerce podcast. I’m safe to say that we’re now in the spring season. With the season, I want to kick off with some evergreen content from our archives. We’ll be going to a session from 2022’s Commerce Accel virtual conference we hosted. This keynote session was hosted by Ali Rose VanOverbeke. She will be taking a deep dive into B Corp principles, in the context of operating an eCommerce business and consumer brand with examples from her brand, Genusee.

Ali Rose speaks to social responsibility in business and explores the importance of building companies that do good for both people and the planet. She shares invaluable insights and lessons learned from her experience at Genusee, a sustainable eyewear brand with a mission to make a difference. Throughout this episode, she discusses various crucial aspects of running a socially and environmentally responsible business. Topics include fair compensation, employee benefits, living wages, community engagement, diversity, and civic involvement. She also delves into the importance of environmental sustainability, local supply chains, and long-term planning for your company’s legacy.

To help you take action, Ali provides a practical and achievable six-week plan for improving your business’s social and environmental performance. This plan is designed to help you create momentum and engage your team in making a tangible impact. Discover how you can redefine capitalism and create meaningful change with your business. Learn from Ali’s experience and be inspired to take the first step towards building a company that not only makes money for you but also contributes positively to the world around it. Don’t miss the insights from this inspiring episode.

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I’m Ali Rose. I’m the Founder and CEO of Genusee eyewear. We are the first circular economy eyewear brand and manufacturer making eyeglass frames in Flint, Michigan from recycled single-use plastic water bottles. I want to talk with you about how to make meaning and money in D2C using the B Corp Principles.

Prior to launching Genusee, I graduated from the Parsons School of Design and then went on to work as a designer and stylist in New York City. I always thought I was going to end up working for a big luxury design house. Post-graduation, I had the reality check that I needed to make money to live in NYC. I ended up working in mass-market fast fashion as a designer at a brand called Lane Bryant revamping their emerging businesses and designer collaborations.

It was incredibly meaningful work because we were designing for a body-positive brand that was changing the way that women’s bodies were represented in fashion. My eyes were also opened to how unsustainable and unethical the fashion industry is, especially at scale. How many of you know that 150 billion garments are produced every year and about 30% of that is never sold or that over 50% of fast fashion produced is disposed of?

Annually, landfills receive more than 11.3 million tons of post-consumer textile waste or even in 2022, H&M was sitting on $4.3 billion worth of unsold inventory or an entire power plant in Sweden relies on burning H&M’s effective products to create energy or simply it takes 2,700 liters of water to create a t-shirt. I didn’t either. That was my realization that this was an unsustainable industry. I resented going to work every day and having to make more stuff that people didn’t need. I decided it was time to be a part of the solution instead of a part of the problem.

My pathway to finding meaning was completely non-linear. Like most things in life, it didn’t make sense until it was in retrospect. As many young Millennials do, before starting my corporate job at Lane Bryant, I went to India, did the whole eat, love, pray thing, and volunteered with an NGO retraining women in domestically abusive relationships with sewing skills. This was my first exposure to social enterprise and I realized I wanted to use fashion for good.

Serendipitously, I flew home to Michigan from India on Christmas day of 2015 with full intentions of leaving my life in the States and moving to India to work for an NGO. When I landed, I found out about the Flint water crisis in Michigan and I immediately started volunteering with the American Red Cross in Flint, delivering water bottles door to door.

At the height of the Flint water crisis, the city was needing more than 20 million water bottles every single day to meet their daily needs. I realized I didn’t need to move to the other side of the world to make an impact and that there was a community in my own backyard that I wanted to be a part of. I went back to NYC and started working in corporate fashion but I was obsessively thinking about what I could do in Flint every day.

Around the same time, I read two incredibly impactful books, Let My People Go Surfing by Patagonia’s founder, Yvon Chouinard, as well as The B Corp Handbook. That was my journey to where we are now. In 2018, after a winding journey, we launched Genusee eyewear through a Kickstarter campaign founded on these B Corp principles and have since scaled it to a seven-figure business with only one frame style.

Before we jump in and I share with you how to build a business that does good for people on the planet, I want to look at this quote from Yvon Chouinard, “Our mission statement says nothing about making a profit. We consider our bottom line to be the amount of good that the business has accomplished over the year. However, a company needs to be profitable in order to stay in business and accomplish all its other goals. We do consider profit to be a vote of confidence that our customers approve of what we’re doing.”

I want to empower you with a framework for thinking through how your organization can be in taking actionable steps to make a social and environmental impact. We’re going to use the B Corp assessment as a guide to reinforce your values and, as a roadmap, to help guide your path to achieving your mission. It’s a tool to help you implement new socially and environmentally responsible business practices. It’s not important where you start, only that you take that first step.

My biggest hope is that you’ll walk away from this with at least a little bit of curiosity but also be equipped to build a business that’s good to its core. This is going to be a top-level overview of the B Corp principles. Keep in mind that there is no single and correct way to be a good company. You will need to choose your own path based on your specific core values, your team interests, your industry, and your overall business strategy.

For starters, what the heck is a B Corp? The B Corp declaration is as follows, we must be the change we want to see in the world, all business ought to be conducted as if the people in place mattered, and through our products, practices, and profits, businesses should aspire to do no harm and benefit all. To do so, it requires that we act with the understanding that we are each dependent upon one another and thus responsible for each other and future generations.

Let’s define a B Corp versus a benefit corporation. A benefit corporation or a PBC, Public Benefit Corporation, is the actual legal entity. You do not have to be a PBC to also be a certified B Corp and you don’t have to be a benefit corporation to be a certified B Corp. Certified B Corps are verified status by a third party called B Labs. It requires ongoing verification that you must rectify every two years. You have access to formal support and resources of B Labs and there are annual fees.

In both instances, directors are required to consider the effects of decisions on shareholders and stakeholders and the company must publish a public impact report every year. Your performance is self-reported. With a Benefit corporation, you do not need to have ongoing verification. That is your legal structure. There are over 5,000 certified B Corp in more than 79 countries that are spread across 154 industries. It’s not just product companies that are B Corp, this includes agencies of every kind and even banks. You don’t have to be a certified B Corp to be a good business but using this framework can help you create a business that is good to its core and not just for optics.

I get asked pretty often why when launching Genusee that we didn’t start a nonprofit and it’s because I strongly believe that business, for better or worse, is one of the most powerful forces for change on the planet. Governments and nonprofits are necessary but they’re also insufficient in addressing some of society’s biggest challenges. B Corps are better businesses and B Labs has a report saying that they are also 63% more likely to survive a recession than average businesses.

You might be asking, “Why?” That’s because when we build good business, we’re able to accelerate the evolution of capitalism from valuing short-term profits for shareholders to enduring prosperity for all stakeholders, which includes workers, suppliers, the community, the environment, and shareholders. It also allows us to redefine success in business by creating a new narrative, a new set of expectations, and a new focus on using the power of business for more than profits.

B Corps are concrete and measurable when they turn ambiguous concepts of going green into something more tangible that can be trusted and reported on. Good businesses can help us live a higher purpose and make meaning of the world around us. Good businesses stand for something not against anything. As a movement, they stand for positive, innovative, and practical solutions to global problems we are all facing.

Here are ten high-level benefits of using business for good. If you want to save money, enhance profitability, and generate more business value, increasing your company’s social and environmental performance is good for business. Doing good and making money are not mutually exclusive. Some benefits of doing good are being a part of a community of leaders with shared values. It helps you attract talent and engage your employees. It increases credibility and builds trust with not just your customers but your community suppliers and all stakeholders.

It helps generate press. Everyone loves to tell a positive feel-good story. It helps with benchmarking and improving overall business performance. It can help attract investors, especially the right investors who are aligned with your values and your growth strategy. It helps protect your company mission for the long term, not just the short term. It builds a collective voice. It can help with saving money and it makes you a part of leading a global movement.

An example through the lens of Genusee is we have never worked with a PR agency. All of our PR has been inbound and that’s because people love to tell this feel-good story. We were featured by Vogue and named 1 of 56 brands changing the face of American fashion. We were featured on World News Tonight with David Muir twice, Katie Couric, and New York Times.

It also supports building this collective voice. We’ve established a community of more than 475 creators who have more than 4 million followers. There’s a 90% posting rate with our influencer gifting program because we’ve strategically gifted to values-driven creators who are passionately sharing our product and mission with their audiences.

How do we measure impact? A comprehensive tool that helps turn this idea of business for good into a series of concrete and measurable actionable steps is the B Impact Assessment. It allows you to assess your company’s social and environmental performance on a 200-point scale. To qualify as a certified B Corp, you’re going to need a score of at least 80. Whether you’re wanting to become a certified B Corp or looking for a free tool to assess, compare, and improve your social and environmental performance, this will only take you about 90 minutes to get started and it’s free.

What is a good score and what does it mean? Any positive score means you’re doing something positive for society and the environment. Most companies start at 40 to 60 in terms of their score. To be a certified B Corp, you need a score of at least 80. The median score of certified B Corps is 95. I am going to quickly go through the areas of impact that you’re assessed on through the Impact Assessment starting with good for workers. Why does this matter? Your company wants to attract and retain the best talent and talented people want to bring their whole selves to work.

Looking at areas of compensation, benefits, wages, and making sure that you’re paying a living wage to everyone on your team and everyone that works within your organization. Whether you have salaried employees, making sure you’re looking at proper business comps, or if you have hourly employees, using the MIT Living Wage Calculator is a great place to start. Also, looking at the multiplier between the highest and lowest-paid worker.

In Fortune 50 companies, the average ratio is 379 to 1. Whereas Whole Foods, which is a B Corp, their ratio is 19 to 1. There are smaller companies like Namaste Solar, which caps their ratio at 3 to 1. Looking at options for worker ownership as well, offering stock options equivalents or plans to transfer ownership to employees eventually.

With Genusee, we even set up profit sharing for our labor employees. If they were hitting KPIs on their labor costs, we would split those profits 70/30 and investing things back into improving equipment and supplies for the team and then making sure that you’re creating a healthy work environment. Having things like a health and wellness program, distributing an employee handbook, and conducting regular unanimous worker satisfaction surveys.

The next would be, is the business good for the community? Why does this matter? Job creation, diversity, civic engagement, and strong supply chains benefit your communities and are sources of competitive advantage. Creating job opportunities for the chronically underemployed population such as at-risk youth, homeless individuals, or those who are formerly incarcerated. Suppliers, distributors, and product publicly disclosing the social and environmental performance of your suppliers as well. Civic engagement and giving offering incentives for employees who organize service days and goals to increase participation.

In Genusee, we’ve done things like tree planting with our conservation district as well as doing 1% back to a local nonprofit called the Flint Kids Fund. Diversity, making sure that you have diversity even on your board of directors, diverse management team, and employees and that suppliers are majority owned by women or underrepresented populations.

Also, your local involvement purchasing services from local minority-owned or women-owned businesses considering Fairtrade or environmental standards in making procurement decisions and banking with local independent banks or credit unions. For Genusee, the majority of our supply chain was within 188-mile radius of Flint, Michigan, which allowed us to support and sustain other local small business partners as well.

Is the business good for the environment? Why does this matter? Sustainability is a source of innovation. Improving your environmental performance can help you attract top talent, create more durable relationships with suppliers, and increase consumer trust. For Genusee specifically, because this is a pretty broad metric, we designed eyewear that was holistically sustainable. The traditional eyewear industry is designed for a linear economy of bayou-use landfill.

Over 4 million pairs of glasses are typically ending up in landfill every year. It’s produced through a reductive process of CNC cutting where 90% of that material is wasted. Quality fills are usually ending up in landfill and it’s using virgin plastics and resins. For Genusee, we approach sustainability through the product design lens, holistically designing our glasses for the circular economy with the end-user in mind, and doing something called our buyback program.

When our customers were done using their glasses, we can buy them back and upcycle them into our material stream making them through an additive process of injection molding, which allowed us to collect spruces and any wastage and make sure it’s being upcycled back into the material stream. Selling things like our Lemons or our Slightly Imperfect Frames at a discount.

Typically, most companies would throw things like that away, and prioritizing the use of preexisting materials in the supply chain. Even looking at our packaging, making sure that we’re following our values in terms of keeping things local. We source the majority of our packaging from local suppliers in Michigan. For instance, our boxes were made from recycled cardboard sourced from Lansing, Michigan in Maiden Bay City, Michigan.

Is the business good for the long term? Why does this matter? In a word, it means legacy. You want to build your company on a solid foundation of accountability and transparency so that it can retain its values, culture, processes, and high standards that you’ve put into place. Your mission will evolve from this framework through integrating a commitment to social and environmental responsibility into your corporate mission statement.

Training employees on your social and environmental mission transparency, sharing your P&L and your balanced statement with your employees, and having a corporate structure that legally institutionalizes your mission into the corporate structure. For example, this is what we talked about as the PBC or the Public Benefit Corporation.

Being good to the core. Everything starts with intention. What problems could your business help address if it were designed to do so from the start? If you’re in the early process of starting your business, this is the perfect place to be to make sure you’re building a business that is serving those in need, creating broad ownership, strengthening communities, restoring the environment, and looking at specifics like focusing on alleviating poverty through your supply chain by sourcing through fair wage and fair trade certified suppliers.

Donating about 20% of your profits or 2% of sales to charity is a nonprofit foundation annually. Targeting and hiring more than 10% of total workers from chronically underemployed populations, low-income, or formerly incarcerated individuals. Specifically designing to build and rebuild community and having production practices that are designed to conserve the environment across the company’s entire operation.

Let’s get started. Here’s a six-week action plan to get you on your journey to making more impact with your organization. Starting with week one, taking 90 minutes to get a baseline. Do the assessment, it’s free, and it’s online through B Labs. You’ll get a quick baseline of your company’s overall social and environmental performance to create momentum before engaging.

Week two, you’re going to take 90 minutes and you’re going to engage your team, identifying coworkers who may also be interested in helping your business as a force for good. See what your team is passionate about and areas of importance and focus on improving those areas. Week three, take 1 to 3 hours and create a plan. After you’ve identified your core project team, work with them to set a target and the impact score, and create a plan with short, medium, and long-term goals.

If you got a score of 53, see whether you can implement enough practices in these six weeks to get an additional ten points by the end of the six weeks. Week four, you’re going to take one to five hours and you’re going to start implementing. You and your team will dig in and start completing the items on your action plan. The outcome should be an increase in your B Impact score.

Week five, you’re going to take 1 to 5 hours and you’re going to fine-tune. As you work through your action plan, keep track of your improvements by inserting this data into the B Impact Assessment online, which will give you an updated score. Week six, it’s time to freaking celebrate because you have made significant progress towards improving your social and environmental performance. Whether it’s 1 point or 10, remember, it’s not about where you start, just that you take that first step forward.

My key takeaways for you today are, number one, the pathway to making meaning is non-linear. Number two, there is not one way to be a good company. You don’t have to do all of these things at once. Number three, businesses are a powerful force that drives change. Number four, doing good and making money are not mutually exclusive.

Number five, we can redefine capitalism when we build businesses with values that do good for people and the planet. Number six, it’s not important where you start, only that you take the first step. Thank you so much for being with me. If you are interested in chatting more about this or want to connect, follow up with me by email or any social platform. I would love to meet you.