Triple Bottom Line Business
If you’re a tech company, you’re out to create a better product. It makes no difference what space you’re in, you know the key to succeeding via market share and profitability comes from what you produce and market.
But that idea is being challenged. Because today’s customers and prospects want to see, in fact many are demanding, that the lifeblood of a company goes beyond the product it offers. They want to see that a company is also doing some good (if not a lot of good) in the process.
Which brings us to the triple bottom line of People, Planet and Profit. John Elkington, a British CPA at the time, coined the term in the late 1990s to reflect the importance of measuring more than a business’s economic metric. That measurement must also apply to social and environmental outcomes.
Enter the true reflection of the triple bottom line: the benefit corporation.
A benefit corporation is a legal entity that allows a corporation to do more than just make a profit. It In fact, in the 37 states now offering benefit corporation legislation, you’ll find that the language demands it. For example, the Oregon Secretary of State’s office defines a benefit company (benefit corporation) as a type of corporation or limited liability company that considers its impact on society and the environment in the business decision-making process, in addition to earning a profit.
6 Ways Your Benefit Corporation Succeeds
Since launching our business four years ago, we’ve poured over a lot of research about the triple bottom line. And we have discovered 6 powerful ways that becoming and certifying as a benefit corporation helps enhance the viability and credibility of a technology business.
- Creates relationships with customers around similar values such as sustainability, social justice or healthy communities. This provides a foundation of trust and leads to increased sales. 68 percent of global consumers would remain loyal to a brand if the organization practiced social responsibility.
- Gains an edge in recruitment and retention. Living the principles of the triple bottom line of People, Planet, Profit enhances morale. Millennials and Gen Z, who are aligned with these values, want to work for these companies. It gives them a sense of purpose, pride and camaraderie.
- Leads to more credibility and differentiates the company. For many small tech companies, it is hard to create unique branding that provides a competitive edge. Identifying as a certified Benefit Corporation committed to the triple bottom line is a compelling message that resonates with today’s demanding consumers and differentiates that business.
- Attracts investors who are increasingly looking for environmental and social responsibility within a tech company’s core mission. Many potential and current shareholders view efforts around environmental and social good, e.g. sustainability, as a sign of a company’s health and future profitability. In fact, once a startup goes public, social responsibility initiatives can improve the company’s stock price by getting listed in indices like FTSE4Good and Dow Jones Sustainability.
- Enhances brand equity. As a benefit corporation, you’re differentiating your company, not just its products. It is your most sustainable competitive advantage as you stand out against larger competitors with bigger marketing budgets. Becoming a benefit corporation and certifying as one also helps generate positive press and add value in a potential capital raising or sale by mitigating brand risk.
- Maintains mission in up and down markets, now and post-succession. As a benefit corporation, founders and other mission-driven minority shareholders can hold directors accountable to consider the impact of operating and liquidity decisions not only to shareholders, but to all stakeholders.
It’s spotlighted by the employees they hire (read: engaged). It’s seen in the customer relationships they create (read: loyal). And it’s affirmed by the communities they serve (read: leader).
As you can see, becoming a benefit corporation does more than just differentiate your tech company to the marketplace. It differentiates your business to the world.
Signalmash is a service of Mash Technologies Corporation, a purpose-driven organization that believes technology companies can and should do more to create positive impacts in society. Mash Tech is officially certified as a Benefit Corporation with Benefit Corporations for Good. Contact us with any questions.