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Good morning.

The biggest challenge in turning “stakeholder capitalism” from a public relations talking point into a true operating system is metrics. We know how to measure returns to shareholders. But how do you measure returns to “stakeholders”? And how do you hold companies accountable for delivering, or not delivering, those returns?

One group that’s been working on that question for over a decade is the B Lab, whose goal is to “balance purpose with profit.” It has developed a rigorous certification process for companies to become “B Corporations.” To date, mostly smaller companies have been certified—Patagonia, Ben & Jerry’s, Eileen Fisher. But earlier this year, Danone—a global food company with nearly $25 billion in revenues—announced it planned to become a B Corp by 2025, committing to specific goals for its impact on health, the planet, its people and inclusiveness.

We invited Danone CEO Emmanuel Faber to join us this week on our podcast Leadership Next, to talk about that decision. You can listen to the interview here. An excerpt:

We want Danone to become a B Corp because we believe that in the world in which we live, and certainly in the world we are entering right now, there will be increased attention paid to the ethos of companies and of brands by consumers, governments, employees, civic society, and many more.”

In Faber’s view, the move toward stakeholder capitalism will continue whether businesses want it to or not.

Look at the reality…there are many stakeholders jumping into the scope of our business, whether we like it or not. When governments are just shutting down borders, forbidding exports or imports, when they are forcing localization, when in Argentina you have nationalization of soy companies…When health authorities are closing channels and sending everyone home…these are all stakeholders.” Stakeholder capitalism “is a fact.”

Faber says that, based on discussion with other CEOs, the interest in B Corp certification is growing … although “obviously still small.” But he also says, “I don’t think you need to be a B Corp to do stakeholder capitalism.” Metrics, however, remain key. What gets measured will get managed.

More news below. And thanks to all the sharp-eyed readers who dinged me yesterday for using “principle” when I meant “principal.”

More news below.

Alan Murray

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