Corporate purpose

The Guardian achieves B Corp Status

The Guardian has achieved B Corp status, affirming once again that it puts purpose before profits

Can B Corp be the next Fair Trade for socially-minded corporations?’ pondered Marc Gunther, editor-at-large for Guardian Sustainable Business US, in a feature published in January 2016.

More than three years later and Gunther may have his answer after the Guardian Media Group, owner of The Guardian and The Observer, announced that it had become the first major news organisation to become a B Corporation.

The announcement was accompanied by a commitment to achieve net zero carbon emissions by 2030 – a target described as ‘realistic but challenging’ – as part of a new environmental pledge to Guardian readers.

Guardian Media Group joins a growing list of organisations, including The Body Shop, Innocent Drinks, organic food delivery service Abel & Cole and Danone, to have gained B Corp status, which was launched in 2007 with a stated purpose of ‘being to business what Fair Trade certification is to coffee’. It launched in the UK in September 2015 with 62 founding B Corps; today there are 237.

What we liked about B Corp was that it was broad ranging

They are defined as for-profit businesses that have met rigorous third-party standards for social and environmental performance, legal accountability to align the interests of their business with those of society and radical transparency to rebuild trust. Guardian News & Media first considered applying for B Corp status about a year ago, having spent the previous three years focused on restoring the business to financial stability, after annual losses approached £100 million, by cutting jobs in the UK and US, closing its printing operations and slashing spending. This led the company to achieve breakeven in 2019 for the first time in 20 years.

Julie Richards, delivery portfolio director at Guardian News & Media, explains: ‘We were working on the next stage of our strategy, and we realised that being clear about the purpose of The Guardian and what that means for our readers and for our staff would be a very important part of that.

‘The next question became How do we measure that? We looked at lots of different ways. We could have come up with our own internal assessment. There are lots of very specific accreditations out there, for example relating to the environment, and organisations that measure progress related to staff. But what we liked about B Corp was that it was broad ranging. It brings together all different things and makes it an easy shorthand for, I think, our readers to understand that this is the type of business we are, and the whole idea of putting purpose before profits.

‘It’s a lot more engaging than saying We’ve achieved ISO14,001 for our environmental work. But it was also about having a rigorous, external viewpoint that holds us to account and makes sure we are being honest with ourselves about where we are doing well and where we could improve.’

Richards and her team contacted B Labs, which oversees all B Corp organisations, to understand the process and what it entailed, as well as researching and talking to other companies that had achieved certification.

The assessment process is designed to be applicable to companies in any industry. To become certified as a B Corp, companies must complete an assessment of their impact in five areas: environment,workers, customers, community and governance. Each category is worth up to 40 points, making a maximum score of 200. However, a score of 80 is required to receive certification, which sounds low but is described as ‘intentionally challenging’. Most applicants fail at their first attempt, with 53 being the median score for a typical business.

Richards explains: ‘Going through the assessment gives you a really good view of what you are currently doing, and identifies those areas you need to improve. There is a threshold you need to meet in terms of points to get the accreditation.

Sometimes you feel Oh, we could be doing more, so it is nice to have somebody outside the organisation saying Actually, you’re doing quite a lot

‘Maybe for some businesses, getting B Corp accreditation is about signalling a major philosophical shift. But for us, that’s not the case. It was about demonstrating what we are already doing, but B Corp also helps to shine a light on areas where we could be doing a bit more. The environment was one area we were talking about, and B Corp helped to reinforce that, and even ahead of finalising certification, we were already putting measures in place to work on that.’

In order to achieve carbon neutrality by 2030 as pledged, the company has hired an external consultancy to conduct a carbon emissions audit. It has also established an internal sustainability ‘The assessment tries to measure all the positive things you are doing, but they also ask you a lot of questions about potentially negative things. It was helpful for us to say Okay, there’s an area we can improve on,’ says Richards.

‘One of the really helpful things about the way the assessment is set up, is that it actually makes clear what good looks like. All the questions are multiple choice so you can see, by all the things you’re not able to tick, what improvements you can make. But it was also gratifying to be able to lay out all the things we are doing, particularly on things relating to staff – pay levels, staff benefits, career development, health and well-being – and seeing that those really add up to a lot. Sometimes you feel Oh, we could be doing more, so it is nice to have somebody outside the organisation saying Actually, you’re doing quite a lot.

The Guardian Media Group achieved a score of 86.7. Its best scoring categories were Workers, 27.9, which focused on financial security, health, wellness and safety, career development, engagement and satisfaction – and Customers, 21.8, where it was particularly rated for arts, media and culture. It was less successful in Environment, scoring just 7.6, and Governance, 10.5.

It is an ongoing assessment, however. Companies with B Corp accreditation must go through the certification process every three years, with the implicit aim of bettering its previous score. ‘It is a positive first step, because it gives you clear pointers on what you can do to improve. But I am not keen on chasing points for the sake of it, and just doing some easy wins,’ says Richards.

‘We are using the assessment as an extra piece of information to decide on the things that are most important to us, and to set our own internal targets against them. For example, B Corp doesn’t require you to set a zero carbon emissions target; that was our own decision and we can measure progress against it, but it will also probably result in us getting more points.’

The Guardian is now setting up various groups and committees to look at different aspects considered by the assessment, such as gender pay gap and diversity, with a view to improve the current situation.

The project was led by David Pemsel, chief executive of the Guardian Media Group, who informed both the company’s board and Scott Trust Limited, its ultimate owners, of his plan.

While the Scott Trust has the ability to appoint the editors of its publications, it has a policy of not interfering in decisions. Once the green light was given, it took about six months to complete the assessment process.

On completion, companies are given up to two years to take the necessary legal steps to ensure that their directors and officers consider all stakeholders – not just shareholders, or in the Guardian’s case, the Scott Trust – in its decisions. Directors and officers can then be held legally accountable to this broader mission.

‘We have changed the Articles of Association for Guardian Media Group, and that has been signed off by the board,’ adds Richards. ‘It is really about how we run the business day-to-day, it doesn’t change the mission of the Trust. The change to the Articles of Association is really a statement of intent.

For us, that wasn’t philosophically difficult because we’d like to think that we already operate that way. The mission of the Trust, which sits above Guardian Media Group, is the long-term sustainability of the business and supporting journalistic integrity. This was a quite straightforward process, but I can see how it might be challenging for listed businesses.’

She adds: ‘The aim of B Corp, and the mission they are trying to create, is about balancing profit with purpose. It is designed for profit-making businesses. It is not an accreditation for charities or not-for-profit organisations. It is about looking at how you can pursue your business goal in a way that benefits other stakeholders and minimises any harm you may do.’

Guardian Media Group’s announcement of its B Corp status was also accompanied by a pledge on the environment. Articles online carry a stark, five paragraph warning at the bottom of the page, starting As the climate change escalates… the Guardian will not stay quiet. This is our pledge: we will continue to give global heating, wildlife extinction and pollution the urgent attention and prominence they demand. The Guardian recognises the climate emergency as the defining issue of our times.

It is about looking at how you can pursue your business goal in a way that benefits other stakeholders and minimises any harm you may do

It continues: We have made several important changes to our style guide to ensure the language we use accurately reflects the environmental catastrophe.’

The pledge has resonated with readers. Many have got in touch to say as much, but there are also other signs to back such a view. One-off online donations to support the paper’s desire to keep content free are often made after reading environmental articles. Science teachers in the US, for example, have written to express their gratitude for the environmental coverage.

‘We wanted to make a big statement about the importance of our environmental coverage, partly because it is something our readers care about but also because it is the biggest issue of our time,’ says Richards. ‘We felt that it was important to put that front and centre, particularly because it does not get coverage in some other news outlets. It was a statement about our own position.’

Editor-in-chief Katherine Viner confirmed that The Guardian was changing the way it wrote about the environment in March, when the style guide was updated. ‘Climate emergency breakdown or crisis’ is preferred to the term ‘climate change’ while ‘global heating’ is favoured over ‘global warming’. Imagery is also changing. Where once photos of young children playing in a fountain might have illustrated a story about a heatwave, more dramatic imagery will now be used to reflect the seriousness of the situation.

‘The fact that we don’t have a paywall and therefore have a really big audience, and are providing independent journalism for millions of people, gets factored in in the sense of how we can impact on the world,’ says Richards. ‘But the other bit that B Corp is assessing is how we are acting as a business internally, which is why the pledge to become carbon neutral was a statement that we are taking this seriously as a business, but also demonstrating that we are acting on this and not just talking about it.’

Having gone through the process, Guardian Media Group has been contacted by other companies considering following in its footsteps. Richards says going through the rigour of the B Corp assessment provides a clear framework for thinking about the relevant issues. ‘You might be thinking about the environment in one pocket of an organisation, and thinking about diversity somewhere else,’ she says. ‘This is a really good way of pulling all those things together, and looking at the range of what you are doing.’