- Apple, Walmart, and dozens of other major US-based companies are part of a lobbying group which recently announced a major shift in their stated goals for businesses: to "benefit of all stakeholders -- customers, employees, suppliers, communities and shareholders," rather than focusing solely on creating shareholder value.
- A separate group of corporations, including Ben & Jerry's andPatagonia, took out a full-page ad in the Sunday issue of The New York Times urging that group to "get to work."
- The ad is part of a bigger movement of "B Corporations" -- a private certification that signifies a business "balances purpose and profit."
- This article is part of Business Insider's ongoing series on Better Capitalism.
The Business Roundtable, a trade group that includes hundreds of major companies like Apple, Walmart, and JPMorgan Chase, was just directly addressed in a full-page ad in The New York Times.
The ad was taken out by another group of major businesses, which includes household names like Ben & Jerry's, Patagonia, and Dannon. It intends to piggyback on the recent announcement by the Business Roundtable that the 180-plus participating companies will refocus on business for the "benefit of all stakeholders -- customers, employees, suppliers, communities and shareholders."
The full-page ad is intended to spur on that announcement.
With this ad in @nytimes today the global @BCorporation movement exhorts the 200 CEOs in the @roundtablepnw (who published a statement on the importance of #purpose vs sole #shareholdervalue a few days ago) with the offer "Let's work together to make real change happen"pic.twitter.com/xqXVTil3dc-- Elisabeth Laville (@ElisabethLavill) August 25, 2019
"Let's get to work," it states in bold type. "We are successful businesses that meet the highest standards of verified positive impact for our workers, customers, suppliers, communities, and the environment."
The ad is signed by the CEOs of nearly three dozen major US companies, from Ben & Jerry's CEO Matthew McCarthy to Patagonia CEO Rose Marcario.
The ad was taken out by the B Lab, a group that offers corporations a "B Corporation" designation if they meet certain requirements. The certification takes into account, "how your company's operations and business model impact your workers, community, environment, and customers."
It is a private certification that nearly 3,000 companies have signed up for, according to B Lab.
"Certified B Corporations are a new kind of business that balances purpose and profit," the group says. "They are legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment."
In a letter published on August 19, the Business Roundtable stated a goal to create "An Economy That Serves All Americans." The letter specifically redefined the goals of some of the biggest companies in the US, and it laid out a new group of stakeholders: Customers, employees, suppliers, communities, and shareholders.
That runs counter to the prevailing business philosophy first introduced by economist Milton Friedman in the 1960s, which states: "There is one and only one social responsibility of business -- to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud."
Instead, the Business Roundtable letter takes a wider view of the social responsibility of corporations: "Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity."