BEYOND SUSTAINABILITY: REALIZING THAT WE’RE ALL IN THIS TOGETHER!
In the past two years, the world has seen broad economic uncertainty and social trauma from unprecedented events like the COVID-19 pandemic and the floods, wildfires, and searing heat resulting from climate change. So, how are companies that are going public positioning themselves in the wake of our planet’s collective rough patch?
Typically, a corporation’s charter is to drive profit and create value for shareholders. For many, this includes environmental, social, and governance (ESG) programs that attempt to address a company’s net impact on the world. However, a swathe of new companies going public have decided that slapping a hashtag on a campaign or spending an afternoon volunteering just isn’t enough.
These newcomers have decided operating as a mission-driven company that places priority on both the public good as well as profit isn’t just about winning hearts and minds; it makes good business sense.
Numerous companies aiming to go public this fall have acknowledged their role in managing ESG concerns and are leveraging their responsibility to generate interest in their IPOs and appeal to consumers and investors alike. These companies aren’t pegged to one industry either - sneaker maker, Allbirds, glasses retailer, Warby Parker and food maker, Chobani are all committed to doing good not only for their shareholders but also the environment.
Allbirds, which filed to IPO in the Summer, said it had established a new framework for going public - a “sustainable public offering” – the goal is to create a standard for going public that claims to be committed to ESG issues. In its IPO paperwork, the company said, “While many businesses see tension between profit and purpose, we see opportunity,” and “The more sustainable we are, the better we believe our products and business will be.” Further to this, Allbirds elected to be a public-benefit corporation meaning it has fiduciary duties both to shareholders and social good.
Another is eyeglasses retailer, Warby Parker, which was founded by four Wharton MBA students. The retailer, which is to go public via direct listing, touted its commitment to stakeholders—not just shareholders—in its recent regulatory filing, and highlighted its “Buy a Pair, Give a Pair” program that distributes glasses to people in need.
Finally, food maker Chobani, which is best known in the US for its Greek yogurt, emphasizes on its website that it is committed to “transforming our food system for the betterment of our planet, our people, and our communities,” from “cow comfort” on dairy farms to “responsible manufacturing practices.”
Corporations have long been criticized in the past for using virtue signaling as a way to appeal to socially and environmentally conscious consumers and raise capital from like-minded investors. However, this new crop of corporations seem to be putting substantial resources toward ESG considerations. In fact, Allbirds and Warby Parker are both certified B-corporations, or corporations that meet high standards of social and environmental performance, and that are legally required to balance the public good with profit.
Instead of just looking to ESG campaigns as a way to offset a company’s negative impacts, these new kids on the block are holding themselves accountable to totally rethink the way they go to market. These companies are on a mission to create a world in which they can sustainably drive profit in the long term by preserving resources and investing in the global community.
