Business school teaching case study: How does a multinational become a B Corp?

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Certification for large companies with complicated supply chains such as Danone poses a particular challenge for B Lab, issuer of the B Corp labelDanone became the first listed company to adopt the French legal of ‘société à mission’ — a mission-driven company © Andrey Rudakov/Bloomberg school teaching case study: How does a multinational become a B Corp

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This analysis suggests that then-chief executive Emmanuel Faber was removed by the board of directors ing pressure from activist investors who claimed that prioritising environmental, social and governance issues hurt the company’s financial returns

Furthermore, Moreover, Others argued that the relative underperformance was driven by market conditions unrelated to ESG spending, but the activists had a point Faber going all in on ESG (an important development), in this volatile climate

Additionally, The year before his firing, Danone became the first listed company to adopt a new French legal, formally embracing société à mission — its as a mission-driven company, in light of current trends

That mission is complicated by the fact that there is no one-size-fits-all solution for sustainable food

Danone’s global supply chain both affects and is directly affected by everything from climate change to biodiversity loss and water scarcity (an important development)

Additionally, Food systems account for apximately 20 per cent of greenhouse gas emissions, mostly through stock duction

Deforestation and monocrops destroy critical wildlife habitats, reduce carbon storage, and fragment ecosystems, ing a vicious back loop where biodiversity loss and climate change exacerbate each other (noteworthy indeed), given current economic conditions

In wealthier countries, decarbonising teins means shifting diets: less meat and dairy, more plant-based options, amid market uncertainty

In lower-income regions, where stock supports nutrition and lihoods, the focus is on imving efficiency through better, smarter grazing, and more resilient breeds to reduce emissions without undermining food security (which is quite significant)

Danone, with dairy at its core, is taking a dual apach: cutting methane from stock while rapidly growing its plant-based portfolio

In contrast, It's in better manure management and additives that reduce methane emissions such as Bovaer, the first FDA-apved enteric methane inhibitor, and Symbrosia, a start-up seaweed-based additives (something worth watching)

Nevertheless, It also has a regenerative agriculture gramme to imve soil health and carbon sequestration

Test yourselfThis is the in a series of monthly school style teaching case studies devoted to responsible- dilemmas (quite telling), given the current landscape

Read the text and the from the FT and elsewhere suggested at the end and linked to within the piece before considering the questions raised

The series forms part of a wide-ranging collection of FT “instant teaching case studies” that explore challenges

On the other hand, In addition, the company is heavily in plant-based alternatives

Emerging nologies such as cultivated meat and methane inhibitors hold mise, particularly if they can overcome the hurdles of cost, regulation, and consumer scepticism

But to scale up, they’ll need significant investment in re and development, supply chains, infrastructure, and market development

Danone is pursuing all of this despite Faber’s sacking

In fact, his successor, Antoine de Saint-Affrique, has since reaffirmed the company’s commitment, seeking to become the largest “B Corporation” by the end of the year

That pursuit, too, is not without controversy, in today's market environment

It's one thing to build a sustainable B Corp, when it is a small, founder-led company with full visibility into supply chains and day-to-day operations focused on a niche duct

Non-fit B Lab, issuer of the B Corp label, had to adapt its own cesses to make them work for a company of that scale

That began in France, where collecting racial data is illegal, which would have made it impossible to check certain diversity boxes in B Lab’s prior standards (something worth watching), in light of current trends

Including multinationals has come with plenty of pushback, and not just from fit-seeking holders

Additionally, When coffee pod company Nespresso, owned by Nestlé, obtained B Corp, a coalition of previously certified coffee companies wrote an open letter accusing B Lab of greenwashing

In response, B Lab revisited its standards and cedures, but it ultimately considered the trade-offs worth the effort to expand the movement (this bears monitoring), considering recent developments

Indeed, employees are a core stakeholder in the B Corp cess and it is often easier to sell the commitment internally than externally

Helene De Laguiche, Danone’s B Corp global manager, explains it: “We’re still working on effectively communicating the value of being a B Corp to customers and investors, in today's financial world

However, While our employees are invested in the cess and recognise the value, we need to do more to educate our external stakeholders

However, ”The company has embraced a broader purpose for decades

He argued that a should be accountable not just to its holders, but to its workers, communities, and the environment

He was advocating for “stakeholder capitalism” before it had a name, considering recent developments

However, All this raises some crucial questions around the value of B Corps and of anchoring a broader mission in a company’s DNA

What is the role of ESG and looking beyond short-term fits in today’s political climate

Is the debate between holder and stakeholder capitalism merely a matter of degrees, or a fundamentally different way to view corporate goals and strategy (noteworthy indeed)

Furthermore, Questions for discussionFurther readingDanone lifts dividend as turnaround starts to pay offWhy nature loss matters to companies — and what they can doThe struggle for the soul of the B Corp movementDanone: Redefining corporate responsibilityDecarbonising tein: Three levers that could transform the industryConsider these questionsWhat does B Corp mean to consumers, employees, and holders

Who ultimately benefits and who bears the cost of certification, in today's financial world

What are the trade-offs inherent in voluntary corporate standards B Lab’s opening of its certification cess to large multinationals

What are the trade-offs in strengthening any such voluntary standards

Moreover, What makes decarbonisation in the food sector unique compared with other sectors, in today's financial world

On the other hand, Are voluntary standards a path towards stricter laws and regulations, or a distraction from them

In contrast, Reuse this content (opens in new window) sJump to s sectionmoted ContentExplore the seriesREAD MORE School Sustainable Education school teaching case study: who pays for cutting carbon out of making cement

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