From its origins as an idea discussed over glasses of good wine to its adoption as Italian law, the benefit corporation — or società benefit — movement has grown to now include more than 1,000 companies, an impressive jump from less than 500 only a year ago. Paolo Di Cesare and Eric Ezechieli, the two people involved in that initial wine-powered conversation, are thrilled to see more people embracing a change in the business mindset and more business leaders realizing they cannot continue to operate as “usual” but must consider their company’s environmental and social impact.
Di Cesare and Ezechieli learned firsthand the process of establishing a business as a benefit corporation as they transitioned their Italian branch of the international nonprofit The Natural Step into a for-profit sustainability consulting company called Nativa, which in 2013 became the first Certified B Corporation in Europe and is a regional leader in the purpose-driven business movement.
“For us, it was a natural evolution. We were working on sustainability for a very long time with a specific focus on sustainable innovation and how to bring these into business,” Ezechieli says. “We evolved into Nativa as a pioneer of the “for benefit” movement — we didn’t know that there was not another B Corp in Europe at the time. We just did what we thought made perfect sense for us.”
Through their roles at Nativa, Di Cesare and Ezechieli have witnessed interest in purpose-minded business grow — even more rapidly in recent years — and continue to emphasize that certification is just one step in the journey of impact improvement.
“It’s not just about B Corps. It’s really about system change and accelerating the evolution of business,” Ezechieli says. “We’re developing leaders who can bring on board other leaders and really develop a movement. B Corp is a tool and is part of the story, but it’s not the whole story.”
They say several well-known Italian companies, including Chiesi Farmaceutici, the largest B Corp in Europe and world famous Illy Coffee that are helping to build awareness of the B Corps through their marketing campaigns and business practices.
“If I just look back one year or two years time from today, it was hard to find a person who knew of B Corp or societa benefit,” Di Cesare says. “It’s exponential — now we are called every day 20-25 times on average from companies because they want to understand more, they want to become a B Corp. It is like the image of shaking the ketchup bottle – nothing comes out on the third, fourth, fifth shake, and then the next time everything pours out. An accelerator was when the largest Italian newspaper came out in April with a 24 page section dedicated to B Corp and societa benefit.
But when people call, our message is that this concept makes concrete the concept of sustainability. We try to underline the fact that B Corp or benefit corporation gives them the tools to become better companies for the future.”
Finding Motivation In Rejection
But as they described in our conversation as part of my research on purpose-driven business, their journey from nonprofit to B Corp regional leaders was not without its bumps and challenges. One example: Their initial attempt to establish Nativa with bylaws that incorporate purpose as well as profit.
“In Italy, when establishing a company, you need to go through the notary, who serves as a gatekeeper for all official documents,” Ezechieli says. “In the bylaws, we put ‘happiness’ as the purpose of creating value for the entire Nativa Team, and stakeholder inclusion and creating a paradigm shift towards regeneration as the social objects: we took a stand about Nativa’s purpose. When we went to the Chamber of Commerce to get the license needed to operate, they gave it back and had completely crossed out the beyond profit, or ‘for benefit’ part.
“We said, ‘What did you do? This is an official document.’ But the purpose was completely scrapped by the Chamber of Commerce. So we came back to them with the same original bylaws and it was scrapped for the second time, the third time, and the fourth time. Eventually they said, ‘OK, we will take it as you want it. But please be aware, this is not recognized by the law because the civil code that defines all business says that the only purpose of a corporation is to distribute dividends to shareholders — there cannot be any other purpose. We will give you the license, but please be aware, this is not legal. It’s your own problem if someone raises questions.’”
That rejection only served to motivate them further — “we found the force to act,” Di Cesare says — and prompted their turning-point conversation on establishing a benefit corporation law in Italy.
“We sat down with a glass of good wine and started to envision what could happen,” Di Cesare says. “We could establish a political party — but realized that would take too long. Maybe an online petition, or talk with some parliamentary reps. What if Italy could become the first Sovereign State to introduce Benefit Corporations? What if all businesses could become ‘B Corps’? Eventually, one day, that would be just normal. One big step came when we were invited to talk about this with Italian politicians at a public input event. One of the tables at the event was dedicated to us, and there we developed some good energy, with many types of people – entrepreneurs, lawyers, senators gathering and providing their feedback.”
One of the senators, Mauro Del Barba, was intrigued enough to form a working group with Nativa at the end of 2014. After a few months of work on crafting legislation, it was proposed in April 2015 and ultimately approved in December of that year.
“So that happened only 14 months after the initial conversation over wine. It was a fantastic moment to see the momentum of something you started become a law,” Di Cesare says. “It was unexpected. But these things mean that something was actually boiling at the time. So it had to happen.”
Unlocking Change While Growing The B Corp Movement
In advocating for the benefit corporation legislation and bridging the gap between business priorities and political impacts, the Nativa team met new business leaders looking to advance regeneration and sustainability.
“Nativa is also playing the role of B Lab’s country partner, managing the dynamics of the movement in Italy,” Di Cesare says. “A year ago, for the first time, we were able to create a community budget so we asked all the Italian B Corps for a pledge for our first joint marketing campaign. We decided to call it a ‘unlock the change’ campaign because it occurred around the COVID-19 lockdown.”
They were pleasantly surprised by the amount donated — not a requirement, and something on top of the cost of B Corp Certification — and by the breadth and success of the campaign, which included advertisements on buses and trains and in newspapers.
“It was quite amazing. Because of that success, this year companies know what it feels like to be part of the community and contributed even more,” he says, for a campaign focusing on the climate crisis and on gender equality: “The climate has changed, now it’s our turn.”
Ezechieli points to the momentum-building “flywheel effect” as more B Corps participate in the marketing campaigns and public interest grows in how companies are addressing environmental and social issues.
“One of the challenges is that it is hard to become a B Corp, and the certification process takes time,” he says. “So how do we build the B Corp community and also bring on board those who are not yet ready to be B Corps or will not become B Corps for a while? So there’s a tension between the need for the wheel to move fast and the delays in the system.”
Nativa turns to its own experience with the B Impact Assessment — the tool used to measure and certify B Corps that also encourages them to pursue consistent impact improvement — when working with clients and emphasizes from the start that the process is about much more than certification.
“Our business model is entirely about sustainability and the great transition, but we discovered the robustness and the importance of the process,” Ezechieli says. “It makes clear how benefit corporations and B Corps relate to one another: We explain that one is the measurement and one is the legal structure, and you have to have both.”
Nativa also emphasizes the importance of involving all team members in the process to create and build engagement for business as a force for good.
“We engage in the challenge with them. It’s not like us telling them what to do; we are together in this journey,” Ezechieli says. “It’s also about human engagement. People in the younger generation who are working in middle management will become the leaders of tomorrow, so it’s important that they develop the right mindset.”
He also points to growing interest in the financial industry as another important leverage point that complements policy change.
“We’re working with really the largest, most important financial institutions in the country and helping them move people toward sustainability and enabling them to become catalysts of sustainability for the hundreds of thousands of companies they work with,” he says. “This is something that is really potentially transformative for the entire country, and the models could possibly be transferred to other countries, to other regions. We really see Italy as a global laboratory for sustainable innovation, because what’s happening here is quite unbelievable — this mixture of B Corp, benefit corporations and the activation that is going on is very, very exciting.”
With the surge in interest, he and Di Cesare say the most important part of the process for business leaders is to get involved and learn more about regenerative business paradigms and societa benefit.
“When we meet with companies, people are aware that something should be done but they don’t know where to start or how to do it,” Di Cesare says. “It’s amazing to see that you are on the same wavelength, and that we have an expertise that can be very useful for them. It’s incredibly valuable to make the first step in the right direction. That is really our mission.
“As Victor Hugo said, ‘There is nothing more powerful than an ideal whose time has come.’’