B Corp: environmental and social sustainability pays?
B Corps adhere to sustainability plans. But what are their financial effects?
Today, we are witnessing an overall effort on the part of governments, the European Union, enterprises and individuals, to render our activities more sustainable, in order to improve the quality of life of the people and climate conditions on our planet.
Among various other initiatives, today we present a particularly interesting one: the B Corp. B Corporation is a certification, widespread in 78 countries and 155 different sectors, issued by B Lab, an USA non-profit organization. The main goal of this movement is to make sure that environmental, social, responsibility and transparency results of the companies are as solid and reliable as the economic ones.
In order to obtain the certification, firms have to achieve a minimum score of 80 out of 200 in an environmental and social performances analysis questionnaire, B Impact Assessment, that examines the impact in 5 areas: Governance, Workers, Community, Environment and Clients. Enterprises that reach the minimum score are subject to verification through a validation process. Eventually, the final step is the execution of the supporting documentation by the company.
Of 4500 B Corps in the world, as many as 140 are in Italy alone. We have chosen three Italian enterprises that obtained the certification thanks to their sustainable approach, focused on the wellbeing of employees and the environment. With the help of s-peek, we have analyzed the trends of their business.
On the side of the making of an ever more sustainable world, Davines Group, an Italian enterprise with its headquarters in Parma, took action. It was founded in 1983 by the Bollati family as a high-quality hair care products research and production laboratory for renowned cosmetic companies all over the world. Today, the Group is an international B Corp present in more than 90 countries, with branch offices in New York, London, Paris, Mexico City and Hong Kong.
In 2016, Davines Group obtained the B Corp certification with a score of 99, while in 2020 it improved its result by gaining 117,4 points. The goals reached by the firm have a positive impact on employees, on the planet and on society in general. At Davines, great importance is given to professional growth of the staff, engaged in training courses, as well as to a work-life balance, guaranteed by many privileges not provided for by the law.
Moreover, in 2019, the Group reached carbon neutrality by reducing carbon dioxide emissions in all headquarters of the world. Eventually, Davines proved great commitment to the local community through corporate volunteering projects.
Besides great sustainability results, the enterprise features a healthy financial situation, with a turnover of €154 million and with a several-year stable BBB rating, that neither the pandemic managed to dent. In 2020, in spite of a slight decrease compared to 2019, caused by the effects of the lockdown, the firm showed high profitability results, above the industry average.
Furthermore, despite a decrease in turnover by 8,9%, the enterprise managed to raise its profit by 11,1%, also by dint of a decrease of total debt, as it can be deduced from solvency indicators that registered a two-grade improvement.
1911, Oneglia, Liguria. The olive grove of the Carli family has a bumper crop. Giovanni, one of the six Carlo Carli’s children, has the idea of offering the oil not to the local traders, but to those of the neighboring Piemonte. That’s how begins a story that has lasted, from generation to generation, for more than 110 years, while reaching goals that only a few enterprises can claim.
So much so that in 1927, Pope Pius XI granted the Carli family with the title of Papal Suppliers and in 1937, Victor Emmanuel III declared them Official Suppliers of the Royal House. Today, most likely there isn’t a home in Italy that doesn’t know Olio Carli.
The Group becomes the first Italian manufacturing company certified B Corp in 2014, testifying their transparency and observance of strict social and environmental standards.
In 2020, the company had an overall turnover of little less than €160 million. In the last few years, despite the negative impact of the Covid-19 pandemic on all sectors, Fratelli Carli has reflected an upward trend in the economic and financial context since they gradually improved their rating (reaching the BB grade in 2020), by reducing their default probability from 16,4% in 2018 to 1,71% in 2020 and by increasing their equity by 35,2%. Also, profitability figures proved to be decidedly above the industry average in 2020.
Even though the solvency doesn’t result satisfactory yet, the enterprise generates operating margins capable of sustaining the net financial debt, which means that even though the firm contracts bank loans in order to finance its activities, the generated operational liquidity justifies its investment.
In 2020, ROI (Return on Investment) and ROE (Return on Equity) respectively obtained a BB and a BBB grade, thus confirming the economic and financial solidity of Fratelli Carli.
A particularly interesting company for its economic and financial situation is Organizzare Italia, the first enterprise for personal organization in Italy. This young firm offers consulting services for the improvement of one’s organizational abilities and Professional Organizer courses, within the working and the school world.
In 2016, Organizzare Italia becomes a certified B Corp, with the aim of redefining the concept of success in business.
Founded in 2018, at the end of its first year, the company’s survival was doubtful within the next year, given its rating score dangerously close to default, CCC. After the first year of difficulty, the enterprise improves its rating score by as much as 6 grades (from CCC to A), a result that maintained in 2020, bringing its probability of default from 11,54% to 0,21%. Sales revenue increased from €85 thousand in 2018 to €122 thousand in 2020, proving remarkable resilience. Moreover, the company has no negativities, and ROI and ROE figures obtained respectively an AAA and an AA grade, which reflects the fact that the core activity of the business appears to be particularly profitable.
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