Danone North America, which until recently was formerly known as DanoneWave, is now the world’s largest B Corp and public benefit corporation. The U.S. subsidiary of the eponymously named French multinational announced a year ago that it has completed the steps necessary to become the largest American public benefit corporation. This latest milestone was achieved two years early.
The newly renamed food and beverage company has completed many steps in its quest to reach this goal. Danone’s acquisition of WhiteWave Foods two years ago was certainly a steppingstone, as that merger brought in popular organic and non-dairy brands such as Silk, Earthbound Farms and Horizon. The company accelerated what it described as its commitment to environmental and social responsibility, including last year’s “pledge” to help dairy farms become more financially competitive and sustainable.
Danone’s commitment to social responsibility is not relegated to the U.S. Eight additional subsidiaries have been granted B Corp or similar certification, including business units in Argentina, France, Indonesia, Spain and the United Kingdom.
In order to be certified as a B Corp or similar governance structure, a for-profit company has to pass a rigorous set of guidelines covering its overall social and environmental performance. A business also has to legally change its business structure (as in no longer being a corporation, partnership or LLC) to become recognized as a public benefit company.
While more investors have been urging companies to pay more attention to their environmental and social impacts, the stubborn conventional wisdom on Wall Street is that B Corp and similar certifications means higher operating costs.
But Danone’s CEO Emmanuel Faber said the company’s experience, and that of its supply chain, have actually been the opposite. Less waste and more efficient usage of water and energy, for example, are just a few paths towards reducing costs while boosting a company’s corporate responsibility street cred. Suppliers that have followed Danone’s lead have also seen their operating costs decrease.
“We decided that we needed to take our own part in embracing this revolution. We need to rebuild trust as companies, as an industry. I think the B Corp certification is a fantastic way of saying to everyone that this is the ethos of the people who are behind the brand,” Faber said yesterday during an interview with CNBC.
Image credit: Danone North America