What is the Benefit (B) Pledge?
The B Pledge is a commitment from the world's wealthiest companies to dedicate a portion of their annual revenue to philanthropic endeavours. Companies who take the B pledge are making a commitment to direct resources towards addressing society's biggest problems. Things such as access to water, food, shelter, clothing, education, etc.
Where did the B Pledge come from?
The B Pledge is modelled after the Giving Pledge, which is a "commitment by the world's wealthiest individuals and families to dedicate the majority of their wealth to philanthropy." This pledge was started by Bill and Melinda Gates, and Warren Buffett in 2010. Since its inception, a handful of humans have rallied behind it, such as Richard and Joan Branson, David Rockefeller, Mark Zuckerberg and Priscilla Chan, Sara Blakely, Elon Musk, and Jeff Skoll, to name a few.
Rather than focusing solely on individual wealth, the B Pledge is broadening this commitment to for-profit companies with an abundant of resources to make an analogous pecuniary pledge.
Who can pledge?
The B Pledge focuses on the private companies with annual revenues that are inarguably lofty. For example, we encourage Fortune 500 companies (in the US or globally) and companies generating the most revenue in the world to participate.
Having said that, any company is welcome to take the pledge. Patagonia is a company whose annual revenue does not match that of Walmart, however, their mandate is to donate 1% of their profits to the planet. Meaning, they are a solid precedent of a company who fulfills the intention of the B Pledge.
What's the point?
We are interested in creating an alliance of likeminded businesses, whom, collectively, want to nudge for-profit companies in the direction of functioning with ethic. In its most extreme practice, this is defined as a Benefit (B) Corporation.
What is a B Corporation?
Succinctly put, in the US, a B corporation is a for profit company that benefits the public. This is defined as having a positive impact on society and the environment. In economic speak, this means maximizing positive externalities and minimizing negative ones.
They function as mainstream corporations do, however, they are required to reflect on the impact of their decisions. This means going beyond thinking about shareholders only, and considering broader environmental and societal ramifications of their day-to-day operations as a company.
We are highlighting the B Corporation, as defined by American legislation because it is a clear precedent that exists. This is not to suggest other models do not exist or are not better options to move towards. For instance, in the UK they have a Community Interest Company (CIC). Our focus is on building a tribe of likeminded companies from all countries, who are choosing to entwine a level of ethical rigour to their practice.
Why a pledge?
A pledge is an expressed intention and commitment. It shouldn't be difficult for companies that have extra resources to support local projects dealing with basic human and environmental rights. Creating a collective space, this website, where companies can publicly commit to doing more for the environment and society, intends to:
Make it easy for humans to understand which companies are making this commitment.
Create a space where companies can highlight their initiatives.
How does it work?
Each company who makes the pledge commits to submitting a public press-release explaining their decision to participate in the B pledge. This includes a statement describing the company's reason for pledging and intended trajectory (such as, where the resources will go, etc.).
Will the B Pledge grant money directly to organizations?
Not directly. Each company who pledges chooses the cause or organization they wish to align themselves with. We act as a watchdog and cheerleader for these companies.
How much should or will companies give?
That's up to the individual company. As mentioned above, companies like Patagonia, donate 1% of their profits to environmental causes. Companies such as Warby Parker, do not donate 1% of their revenue, however, they are chipping away at being reflexive with their actions, as you can see here. We are encouraging a commitment to moving in a new direction of running for-profit businesses. Each business is responsible for setting their own pace and commitment.
We are more interested in seeing a commitment (pledge) and overt, measurable, action relating to that pledge. Alternatively put, we value execution at whatever scale, more than a temporary and theoretically laden pledge that emphasizes vacuous grandiosity.
Once a company has made the pledge, how do you know if they will follow-through?
Legislation often takes a long time to pass. Even then, regulating or enforcing laws is difficult, time-consuming, and in certain countries entirely irrelevant. (For example, consider international law, and how difficult is to both decide upon international standards, and then enforce them.)
For this reason and more, the B Pledge is explicitly designed as a moral commitment by companies to giveback. It is not, nor ever will be, a legally binding contract.
How did the idea come about?
The idea came about when Lindsay Aranoff was confused why individuals with great life tools (capital) were able to make an important and valuable pledge (the Giving Pledge), and yet, companies with comparative resources did not have the same option.
How long will the pledge last?
Not unlike the Giving Pledge, our hope "is that the effort will continue for generations to come." Particularly given our society has many centennial companies; ones that expect to be around for a century or more. Companies who can choose to lead and address problems that need to be solved for, with a continuity of attention that at times government or otherwise struggle to achieve.