S11E9: What’s Love Got to do with Business with Jorge Fontanez

Jorge Fontanez is the CEO of B Lab, a non-profit network that believes business can be a force for good. B Lab is best known for certifying B Corps, companies that meet high standards of social and environmental performance and accountability. To become a B Corp, companies need to be transparently addressing things like DEI, their own climate footprint and labor conditions. There are currently just over 9,000 B Corps in 102 countries across 162 industries, including well-known brands like Patagonia, Toms, and Ben & Jerry’s. 

Beyond stewarding B Lab’s rigorous certification process, Fontanez also believes that business can be more loving. 

“Our observation [at B Lab] is that we want to create the conditions where everyone. has access to opportunity and everyone can benefit from growth. That’s an expression of love to me.” Fontanez says. “And, you know, to me, that’s what I hold on to in order to keep focus on what’s possible. For any for those of us that are futurists, we imagine worlds because we have to believe that something better is possible.”

In this episode of DB|BD, hosts Jessica Helfand and Ellen McGirt sit down with Fontanez to discuss just what love really has to do with it (business). Jorge also offers his digestible wisdom on daunting topics like facing down the ESG backlash, corporate hubris, how to identify a new generation of justice minded CEOs and rethinking marketing as a tool for education.

On this season of DB|BD, co-hosts Jessica Helfand and Ellen McGirt are observing equity by highlighting the “redesigners” — people who are addressing urgent problems by challenging big assumptions about how the world can and should work — and who it should work for. 

This season of DB|BD is powered by Deloitte. 

Visit our site for more on this episode and to view a transcript.

B Lab’s website.

Sarah Ganz Blythe Appointed as Director of Harvard Art Museums

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Transcript

Jorge Fontanez Our observation here is that we want to create conditions where everyone has access to opportunity. That’s an expression of love. To me, that’s what I hold on to in order to keep focus on what’s possible. For those of us who are futurists, we imagine worlds because we have to believe that something better is possible.

Ellen McGirt Welcome to the Design of Business.

Jessica Helfand The Business of Design.

Ellen McGirt Where we introduce you to people from all over the world, from different industries and disciplines.

Jessica Helfand Who are here to talk about design, business, civility and the values that govern how we work and live together.

Ellen McGirt This season, we’re observing equity.

Jessica Helfand I’m Jessica Helfand.

Ellen McGirt And I’m Ellen McGirt. This episode of The Design of Business The Business of Design is powered by Deloitte’s DEI Institute. Deloitte believes that bold actions can help drive equitable outcomes. And conversations like this can fuel the change needed to continue to build a more equitable society. Visit Deloitte’s DEi Institute site at deloitte.com slash U.S. slash DEI Institute for more of their research and perspectives on equity. Later on, we’ll hear from Kwesi Mitchell, Deloitte’s chief purpose and DEI officer.

Ellen McGirt Hey, Jessica.

Jessica Helfand Hey, Ellen. I want to begin today’s episode with a question for you and for our audience. Do you believe that a conversation about the future of business can also be a conversation about love?

Ellen McGirt You know, I do, and I have for a while. And today’s guest helped cement my belief that two things which our world usually holds as polar opposites can actually go hand in hand. And he is someone who is actually in a position to make business more loving.

Jessica Helfand Our guest today is Jorge Fontanez, the CEO of B lab, a nonprofit network that believes business can be a force for good. B lab is best known for certifying B Corp, which are companies that meet high standards of social and environmental performance and accountability. I didn’t know this, but there are currently just over 9,000 B Corps in 102 countries across 162 industries. Well known B Corps include Patagonia, Tom’s and Ben and Jerry’s.

Ellen McGirt And these 9,000 companies had to undergo a pretty rigorous certification process. To become a B Corp companies need to be transparently addressing things like DEI their own climate footprint and labor conditions in accordance with B lab standards.

Jessica Helfand Right. So in accordance with B lab standards, I want to dig into this a minute on that topic. Can I ask you a clarifying question? As our in-house business journalist, because really I need some clarity here. We talk about ESG in this episode more than once. It’s a term that’s been flying through the world for the past few years. I’m not sure we all know what it is just to make sure we’re all on the same page. What is ESG? Where did it come from and what does it have to do with the work that Jorge does?

Ellen McGirt You know, it really has emerged as an alternative way to talk about business success. And it stands for environmental, social and governance. Which is kind of a toothy phrase that, really describes the effort to find ways to track the success of companies who are transforming their business models. And in this case, what we’re talking about is the stakeholder focus, and not just focus on the unbridled growth for the benefit of shareholders. And I know that you’ve probably seen in the news in the last couple of years, governors from big states like Florida have been calling it woke capitalism, not really understanding what it’s trying to do. But the truth is, CEOs and executives are under enormous pressure to have real answers on things like the green transition, as you mentioned, actual diversity and inclusion, pay equity, worker voice and all of the sustainable stuff. We’re going to need to survive on the planet. And now with A.I. in the mix, they’re going to need to be ready to deploy that in ways that don’t repeat the mistakes of the past.

Jessica Helfand And the way you just answered my question, it’s something you and Jorge have in common. You’re so good. Both of you are taking these jargon filled, alienating business terms and translating them into language that’s humane and loving and community minded.

Ellen McGirt And that’s absolutely why we wanted to include Jorge in this episode of DBBD. This conversation is chock full of his digestible wisdom on daunting topics like facing down the ESG backlash, how to identify a new generation of justice minded CEOs, and rethinking marketing, which we are skeptical of, as a tool for education.

Jessica Helfand He even answered my question about corporate hubris.

Ellen McGirt It’s the question that needed to be asked.

Jessica Helfand It’s a question that’s been burning a hole in my brain for years, and I feel like I finally got a thoughtful, honest answer.

Ellen McGirt Two great adjectives to describe this entire episode. Jessica. So here it is, our conversation with the thoughtful and honest Jorge Fontanez.

Jessica Helfand Welcome, Jorge. We are so thrilled to have a little bit of time with you today. So many questions, so little time. I wonder if you could begin and start us off by telling us, me, our listeners who may not know what actually is B Lab.

Jorge Fontanez Well, again, thank you, Jessica and Ellen, for having me. I did want to put on the record, how much of a fan I am of of your work, Ellen. Having followed your leadership beat, at Fortune since 2016 and the newsletter Race Ahead. B Lab, and, is really the nonprofit engine that is more well known for the companies that we certify. We call them B Corp or B Corp certified companies, and they’re verified by B lab to meet the highest standards of social and environmental performance, transparency and accountability. But in short, B Corps are today legally required to consider the impact of their decisions on all stakeholders. We’re talking about customers, workers, communities and also the environment. And this has been a game changer for now, almost two decades. We have a community of companies working together to build a movement, and our movement exists to change our economic system. Our vision of the future, in fact, is. Doing so in a way that, creates a new kind of economy that is inclusive, equitable, and regenerative.

Ellen McGirt This is such an extraordinary body of work. And before we get into the nuts and bolts and what some of the big dreams and the the endgame of this organizing work has been, we should probably talk about the backlash specifically against ESG. You’ve been quietly doing your work at the Bee Lab for a couple of decades. ESG comes into the mainstream business conversation. Less than ten years ago, and we are in the middle of a pretty robust backlash against it. And I’m curious, since you’re right in the sweet spot of this conversation, how would you counsel other executives who are maybe not certified, not B Corp certified, but who are struggling with this?

Jorge Fontanez I think what we owe ourselves is to step back a little bit from focusing on the backlash because, well, I think, frankly, the backlash,  some would say is in response to progress, that we’re seeing change, not being well-received by certain audiences. There are, ways to think about the the way that the culture of business has perpetuated the thinking that we operate in a world of scarcity rather than abundance. And since earlier this year, I’ve been on the road speaking about how we may have been building an environmental movement, in fact, in response to climate change and also in response to issues of equity, fairness and human rights based on fear. And from my vantage point. I think the antidote to fear is love. How do we, inspire ourselves, energize ourselves again with a new narrative that is less about the dangers and the things that we fear about a changing climate and growing inequity, but instead how we come together in a coordinated way to fight for the things and the kind of world and communities that we believe are possible. And that’s what B Corps are about. And our work is to not only continue that mission, but also create the conditions for leaders to be speaking up. And what I would say to CEOs is that you’re not alone and that your workers are rooting for you to, express yourself in a way that’s not only in alignment with their values, but also protects the basic freedoms that we enjoy in this democracy that we are still working to fulfill.

Jessica Helfand That was so beautiful.

Ellen McGirt Don’t you just want to hug him right now?

Jessica Helfand I do totally. I just, and you. I always want to hug you, but now I want a hug Jorge.

Jorge Fontanez I need a hug today. I’ll just say that I appreciate that.

Ellen McGirt Everywhere I go in the last year in particular is just getting more and more, and these conversations are getting more and more intense is that people who are in the middle of their careers or are working wherever they are and organizations are no longer certain that their executives, particularly their CEO, is the right person for the era where I’m moving into that, that’s it’s clearly more collaborative. There’s clearly more courage required, more love to lean in to difference and to build bridges across difference. And they don’t think the person is the right person for where we’re going and that the talent pipeline has reflected an older set of standards of who should lead businesses. What what are your thoughts about that?

Jorge Fontanez I mean, I certainly I think you’ll find many of the CEOs in our, within our B Corp community. As a CEO, or at least as someone who holds that title within the nonprofit context. I’ll just share that. We’re going through our own transformation as an organization. It’s it’s common, I’ll say. I guess, it feels common, to look back to 2020 and understand that, many people of color have been tapped on the shoulder to take the helm. In an era of real uncertainty, growing uncertainty. And I’m one of those individuals. And what I, one of my tasks has been to work to understand how we as an organization put a mirror up to ourselves to understand our own faults. And that’s been really interesting work for me as a leader, because as someone who has, you know, I have my own privileges, and I recognize the power that I hold, because of my title. I’ve also been working to let it go simultaneously. We are an organization that is also experimenting with new organizational models, new new ways of working. Our commitment to anti racism is steadfast. And one of the ways in which we fulfill that commitment is to shift power. And so, that’s one of my commitments to, to our organization. You know, I believe this work is multi-generational. But one of the things that our own B Corp companies asked us is to build the roadmap and to model the change, because there’s a recognition that what was created may not be what needs to sustain this work moving forward. So we’re in the thick of it. It’s messy. There’s lots that I would love to come back and talk about when it comes to like, not just organizational change and change management, but like, when we’re beginning to design new futures, we do need new kinds of leaders and new kinds of leaders that begin to create new kinds of organizations. And I don’t know that we have many models out there yet. We’re trying to do something over here. Let’s see how we do. But I hope to be counted as one of those leaders who tried and shared some successes.

Jessica Helfand To the extent to which I’m going to posit that, the opposite of fear is hope. And for the kids listening along at home who want to grow up and be just like you. I’d like to put on my inner biographer hat and ask you about how you got to this moment, and there’s so many questions buried in that one question. What’s it like growing up in Philadelphia and going to Wharton? Tell us about the diaspora. That you is a word you use that is, I think, very near and dear to your own experience. And just tell us what got you to the point that you are in now where you are. And I think this is a word I heard you use read that you used and love that you use, which is really showing by example, how you govern lead, and really steward is the word you used. You steward people to think differently about the world we will all inhabit and inherit for generations to come.

Jorge Fontanez Well, I do love to talk about the family that I come from and my cultural roots. My family is from Puerto Rico, and I come from, a line of women, really strong women who, helped to instill in me, the importance of how family needs to stick together, in order to build and create something new. I think the Puerto Rican experience, in the 50s and 60s, I liken to the, the immigrant experience, you know, coming from an island with open breezes, to, you know, concrete cities of New York and Philadelphia, which is where both sides of my family migrated to is a real cultural shock. And, you know, they came here for many of the same reasons that, others come to the United States, which is to pursue better jobs, and to help, you know, their families live a better life. As an adult really I’ve spent more time understanding the reasons why those choices were important in that period of time. And there were policies and practices that favored, companies. Industrial practices, also very exploitive and extractive, that really led to, the taking of land away from people and forcing them into more urban settings, even on the island, which made it less tenable to live there. I’ve begun to appreciate my own, family’s story and connected to to my work. I actually moved from Philadelphia, to New York, almost 25 years ago. And one of the more transformative moments for me was 9/11. Because I had moved to New York, to pursue, you know, also a different life, to pursue a career, in a city that I always admired from afar. And 9/11 was a pretty disruptive moment for so many of us in this country and globally. For me personally, it led to a different decision about my career. And, as luck would have it, I began my path and journey, to this work that got me closer to extractive industries like mining and minerals. And so, that’s part of my story, too, because what it has meant for me to be bi-cultural has. I’ve often said it’s been me learning how to navigate different worlds and I credit my life experience and the richness of that to give me the courage to go into a sector that I never imagined working in that taught me a lot about this work today.

Ellen McGirt That’s incredible. I too, had a brief brush with mining and minerals, which is very  surprising from basically a mixed race East Coast liberal. It’s funny now in retrospect, that and then much older and wiser I to see that as a form of education I could not have gotten anyplace else that gave me the language to speak to people across sectors and to critique and community these sectors. That’s a that’s an argument for resilience. That’s an argument for sticking with things, and that’s an argument for making relationships, regardless of where you are in your career, which is something I know that you’re you’re very good at. And that’s something that I know that you care a lot about with B lab is making sure that the the B Corp members and executives are connected with each other in a profound way.

Jorge Fontanez Yeah, thank you for making that connection. I didn’t know that about your own, background in history. You know, you mentioned the C, the leaders within the B Corp community in the US and Canada. We, are nurturing a community of now nearly 2,500 B Corp certified companies. And I want to just, like, stay humble here because it’s not a huge number when you think about the billions of companies that operate, in this region alone, but it does represent over a 180,000 employees. And we have, a growing network of, well, a network of networks, B Local leaders, we call them, who are helping us deepen our work in a place based way. And it’s been a really interesting evolution because I think back to kind of where we started this conversation. I do think that, the average CEO in any state, especially in the middle of the country, wakes up every day, trying to decide how they can do better for their business and for their workers. And it feels that in this current environment, it’s increasingly hard to, make choices, that are based on values. When I think the, the average CEO, again, is really wanting to do well for their workers in the communities that they operate within. And that’s what I learned from my mining and minerals experience, actually.

Jessica Helfand You mined for information that led you to this point. And there’s all kinds of ways we could invoke that metaphor. Tell us I know that, you’re a big believer in storytelling. How does storytelling apply to the B Corp movement?

Jorge Fontanez Oh it’s fundamental. In fact, I’ve learned a lot from the team that I now enjoy to work alongside. One of the ways in which we manifest this work in our region is that we say that, to do well by all stakeholders in a new economy, we focus on three areas all rooted in justice. So ,climate justice, racial justice and equity, addressing the growing inequality, especially in this country, and then the role of policy in governance and understanding that. And until the rules change, the economy can’t change fundamentally. And so we need to understand our role in changing, the rules of the game, so to speak. And you know, what’s also true is that if we are to realize this vision of the future, then we need to center the experiences, the wisdom, and the stories of Black people, of Indigenous peoples, and other people of color that are central to this work. Many of our initiatives, have been intentionally designed with frontline communities at the center. That nothing is done about us without us. And so it’s been really important for us, whether it has been publishing our principles for partnership on climate justice or designing our Racial Equity Impact Improvement program, we are, intentionally bringing in front line community members, social justice activists, climate activists to inform and tell their stories so that every leader in our B Corp movement understands why this work needs to happen. Because often many of us are coming to this work not well educated on our own histories, and recognizing and maybe connecting the dots between how business continues to perpetuate, inequities, even though we sometimes reference those things as being in the past. And so story is crucial to education.

Ellen McGirt I’m here with Kwesi Mitchell, Deloitte’s Chief Purpose and DEI Officer. Hey Kwesi. Thanks for being here today.

Kwesi Mitchell It’s good to be here, Ellen.

Ellen McGirt Kwesi, in recent years we’ve seen, and you knowI’ve reported on, big shifts in the way the business community approaches equity. Tell us what you’ve been seeing.

Kwesi Mitchell There’s a few things that I’ve been seeing as part of this shift, I would say several years ago, Ellen, so much of the efforts of the business community was identifying talent in some of our more traditional sources, largely from, you know, colleges and universities, people with four years degrees. What I’ve started to see as the shift is expansion of that particular pipeline and looking at things such as talent sources that do not obtain or have four year degrees. And in addition to that, an increased focus on retention and advancement, which is something that you have reported on for so many years and the need for a heavier focus in those areas, rather than only the identification of talent in and of itself.

Ellen McGirt That’s very encouraging. And so when we take this view, what’s your call to action for the business community?

Kwesi Mitchell The Call to Action for the business community is for us to spend some time really observing what is taking place within the doors of our organization that are driving perhaps inequitable outcomes across our broader workforce. And that could be so many distinct capacities, everything from how are we sourcing talent, how are we selecting people for development programs, to how are we spending time with respect to leadership development activities. And so all of those things together, it’s really critical for the business community to observe their own actions and use that as the starting point for driving change.

Ellen McGirt Always great to hear concrete ways we can move forward. I appreciate you, Kwesi.

Kwesi Mitchell Same, and it’s always a pleasure talking to you, Ellen.

Jessica Helfand As you think ahead to where all of this is taking you. It’s also interesting to both Ellen and myself that you were also professor, because, of course, it’s all about who we trained to have these conversations when we’re no longer here to have them. You teach at Bard. You teach at NYU. You are an advisor at the NYU center for Sustainable Business. Here’s where I get to just mention, as improbable as it sounds, that this podcast originated at the Yale School of Management. Where we were to where I was teaching a number of years ago. And so the intersection of these, sort of, business questions that had to do with a really rapidly changing environment were at the forefront of the way we tried to introduce questions of design and creative thinking and fair play to students who were very ambitious about moving ahead with a world that they would soon inherit. Could you talk to us about how you divide your time and how the teaching actually impacts your work at B Lab and at B Corp?

Jorge Fontanez Yeah, well, full disclosure, I stopped teaching two years ago because it was hard to do to do both. But I’m still very connected to the Bard program, in an advisory capacity. And you mentioned that I, I did teach a course at NYU.

Jessica Helfand And you have some, excuse me for interrupting, Jorge. But you had also have some contact at Cornell. Something you’ve done at Cornell?

Jorge Fontanez I was recently invited, yes, last year, in fact, to be, visiting, practitioner, to their students, super interesting work because they’re looking at the intersection of public interest and technology and so very aligned to the sustainability area. And, so, yeah, I love to be in these academic spaces. Also, as to your point, Jessica, which is to to try and stay close to how the next generation of leaders, is thinking, or are thinking about how we address these enormous challenges. I think there’s another caveat here. I was a marketing adjunct. And so as a marketing adjunct on day one, every semester, without fail, I would see the different factions within the class. And there often was a pretty large representation of students who said, marketing is why we are in this mess.

Jessica Helfand Now we’re getting into! Okay!

Ellen McGirt Yes! I get that.

Jorge Fontanez Now we’re getting into it. Yeah. And I would say thank you for recognizing my role in contributing to society’s overconsumption. You know, I take it personally, right. Like, I, I, I was trained as a marketer. That is my discipline. But the classroom gave me a laboratory. It’s kind of interesting to make this connection between my work at Bard and the work I’m doing now at B Lab because, I recognize that it was important to redefine the role of marketing. And so I wanted a space at the program, the executive director there gave me an opportunity to do just that, design a course that would shift how we think about the role of marketing. And that’s what I basically spent the entire semester doing, helped me imagine the possibilities of marketing. Being able to, rather than drive consumption for consumption sake, educate customers to make better choices at the shelf, for example, but also engage suppliers and communities and workers to understand where all the other value driving opportunities. And so that stakeholder model, I was playing around with in the classroom led me to B Lab. I would have never imagined that. Right? And I was studying the certification, but that’s our that is our model. The certification is based on measuring the impact that companies have across their stakeholders. And so I do give a lot of credit, to my experience there, and also for all of the academics, around the world, who are working hard to study how business can create effective change. And that’s our work, too, is measuring our impact. So, yeah, we we have a whole network of, professors, that are belong to what’s called B Academics. And so there’s a whole group of, academics, but also students that operate clinics all over the country who are very engaged in using our assessment tools or framework to work with companies, not just to get to certification, but to assess how they’re creating impact to their business models.

Ellen McGirt Well, this really sounds like, which I hadn’t considered before. Is that B Lab and all of your incredibly cool networks of thinkers and doers and creators is really all about business, business model innovation.

Jorge Fontanez Yes. Spot on.

Ellen McGirt Right. So I can imagine that as you’re going through the certification process, the average company we should talk about, you know, who the who the companies are in this cohort, are going to have some unwelcome surprises and some discoveries. They’re having not good impact here. They’re having better impact than they thought there. They had not considered this at all. And then there’s this uncomfortable moment where they have to make some decisions. Do they abandon the certification process, or do they transform to be able to join this community that has a big vision?

Jorge Fontanez Yeah. Well, so you’re reminding me that while I reference the, you know, I guess the fact that we’re a community that is still small, nearly 300,000 companies globally have accessed our, B Impact Assessment, the BIA, which is an open source tool that any company can use to get started on evaluating exactly what you just described. Ellen, where are the gaps and where where are we actually doing well, to get credit, for the impact that we’re delivering in the world. And so it’s important to say, like right now, one important part of achieving certification is based on a score. The minimum score is 80 to get the certification. And the median score is something around in the 50s. Based on that larger, sample size of 300,000 companies. And so it reinforces the, our understanding that like a measured score, actually is separating the best in class companies from the average companies. And part of our work ahead is, in fact, helping companies figure out how to improve. So our posture is not about dinging you for not being best practice or not knowing how to pay a living wage, for example, which is another one of our issue areas that we’re taking up the evolution of our standards, but that we show you how. And so our role is really building the resources to, to get there. You know, the kinds of companies we work with are large and small. So there are some well-known brands that are B Corp certified companies like Patagonia, Ben and Jerry’s, Seventh Generation, Athleta. And and then, you know, there’s also some publicly traded companies like Allbirds and Warby Parker, they get a lot of attention. Absolutely. But the majority of our companies today still are privately held, small and medium sized businesses that that are doing well by their communities and building business models that have very, direct impact, at a local level. And I think that’s the future of business, too.

Jessica Helfand I want to ask you about corporate hubris for a minute.

Jorge Fontanez Okay.

Jessica Helfand Now I’m speaking with my design hat on here. Yes. And I know from many years of experience, because I’m ancient, that designs can confer a false authority on pretty much anything. And my question to you is, I love that you have this index and this benchmark for standard bearing guidance that you’re achieving clearly. Well, but I wonder with these companies that are “innovative” and “creative”, whether they are able to fake it and lie and pretend to be. I mean, I can speak I’m speak from experience that the….

Ellen McGirt The air quotes on innovative was like “listeners, Jessica is going dark now”.

Jessica Helfand The minute you innovate, you’re not innovative anymore. We could get into the semantics on that. But my question is really, I remember years ago teaching a course on a company that I will not name, and looking at this case study and how much money they had put into marketing their “story”. Marketing. We’ve talked about marketing in this conversation. We’ve talked about storytelling. And because they were a revered, very high yield brand, I will only say they were in fashion world, they made it look like they were doing everything right and they weren’t. It’s a strange question to ask, but I wonder if the more creative we are, the more we’re able to pull the wool over people’s eyes. Whether your benchmarks that you have established in this index for what is really B Corp benefit B stands for benefit.

Ellen McGirt Their ironclad.

Jessica Helfand Right. How do you do that?

Jorge Fontanez You know, I want to say that, we’re not perfect, and it’s an imperfect tool. I just want to put that out there. Right. It’s not ironclad because businesses and business models change every day. We expect that companies, when our, when they’re successful, are always growing and growing companies run into challenges every day. And so we’re not working to achieve perfection here. We’re working to demonstrate what’s possible. And then when we land on what works, we share those best practices. And that’s that’s why the community exists. So I think it’s important maybe just to go back to the design principles, in fact. Right. Since we’re here to talk about design. Our fundamental design principles are: accountability, transparency and continuous improvement. And so that means that we do have rigorous approaches to verifying what a company says they do.

Jessica Helfand Wonderful.

Jorge Fontanez Right. There’s a there’s an audit process. We verify companies every three years. This is again different than other frameworks that are simply about disclosures in a moment in time. Because what we also require is that companies publish their profile publicly to not only show how they achieved their certification status, but  in the instance where companies get caught up in a controversy that, they basically have to publish disclosure. And that also too, is part of the, the verification process. So things like, you know, anything that makes us basically into the news, might lead into a complaints process that’s started by someone in our organization or externally. And then a disclosure process. But that’s all to say that holding companies accountable doesn’t necessarily mean that they get to that they have to relinquish their status. Instead, we take the posture of continuous improvement. What can we learn? How do we remediate? And then how do we share that with others. And that’s that’s the work ahead to remain relevant.

Jessica Helfand It’s also the opposite of hubris what you’ve just described.

Jorge Fontanez It’s the opposite of hubris for us. Yes. Yeah. I hope that we’ve walked away, at least from this idea of greenwashing, because that’s what that’s what I think you’re pointing to.

Ellen McGirt Exactly.

Jorge Fontanez I hope that era is behind us.

Jessica Helfand I do too. Just beautifully said.

Ellen McGirt I hope so, too. And it’s just such a hopeful image. You know, there’s these executives and their employees, and then there’s the, theB academics and students that just feels you’re painting a picture of lots and lots of people dispersed around the globe who are thinking about these things and influencing people around them to think about these things, which is really wonderful. Next week is going to be the fifth anniversary of the Business Roundtable’s decision to change the nature of the corporation from a shareholder orientation to a more stakeholder one. Can you just give us a quick, this is super inside baseball nerdy, some examples of what stakeholder governance, standards and legislation might look like. Just what are what are some of the elements?

Jorge Fontanez Yeah, I think the simplest way to think about it is that, you referenced the way in which business operates has been deference to shareholders. Right. That we maximize profits, and those profits go to those that own the company. And those often, if not privately held, are the shareholders. And so corporate governance, for us looks like taking into account all stakeholders. It means internalizing the risks that the companies externalize to the environment, to suppliers, to communities that we often see come up in more controversial settings. Right. It’s one of the reasons why the EPA exists, right, is to like, ensure that historical harms done to the environment are, corrected or, you know, course corrected. And so that’s the the meaning behind it that it gives management and the boards of directors the ability to make business decisions that account for other stakeholders other than maximizing profit for the benefit of shareholders. The other thing I want to say is, when we think about corporate governance in our region, there is another aspect here which has to do with capital flow. Where is the flow of money going and how might we actually change the rules of the game there? So I’ll just mention, you know, reforms like the Community Reinvestment Act historically were established to get money to underserved and marginalized communities. And what I think we’ve learned about that policy position is that it money’s not flowing to the right hands. And we’re working to, to try and and, advocate, for that.

Jessica Helfand You’ve answered in some ways what was going to be my next question by telling us about this embedded practices and the advancements in governance that you’ve achieved. In recent months and years. I wonder, though, if you could talk to us, blue sky, about what you imagined and dream to be ahead of you with B Corp and B lab?

Jorge Fontanez A world full of love.

Jessica Helfand That works. I’m down with that

Jorge Fontanez I mean, you know, and I say that, you know, with being, hopefully, kind of real with kind of like what we need to confront adversity on so many fronts. Right. What speaks to business leaders often is dollars, right? So let’s talk about the problem. The problem is our economy loses trillions of dollars each year due to racial bias, wage gaps, discrimination, unemployment, turnover, the inability to address the issues that their workers increasingly are demanding. And so this gets increasingly compounded year after year, and we become less and less competitive when we are not addressing the inequities that, come with the the intersectionalities, the race, gender, you know, sexual orientation, socioeconomic status, disability or differently abled peoples. Our observation here is that we want to create the conditions where everyone has access to opportunity and everyone can benefit from growth. And I think that’s a simple ask. That’s an expression of love to me, to be able to say, we’re making it possible for anyone in our community to work for us. And, you know, to me, that’s what I hold on to in order to, what you said blue sky, like, keep focus on what’s possible, you know, for any for those of us that are futurists and there are a lot of Afrofuturists that I get to hang around. We imagine worlds because we have to believe that something better is possible.

Ellen McGirt Just your your willingness to bring in the sensibility of love and regard and self care and awareness of others, I think is such an unusual part of the business conversation. And it’s so wonderful. So I just wanted to appreciate you and know that Jessica and I share your vibe.

Jessica Helfand We do indeed.

Jorge Fontanez Can I say one more thing? You know, I don’t I think we’re about to land, but, it occurs to me, you know, we’re talking about love, right? So, like, bell hooks gets often invoked in these conversations. And, and I want to read a quote that I have in front of me which says, “When we choose to love, we choose to move against fear. Against alienation and against separation. And the choice to love is a choice to connect. And to find ourselves in the other.” And I think this is the promise of what it means for businesses to be in coordinated action, because I think when I look at business history and I look at areas of innovation that have preceded us, those areas of innovation have always been about collaboration and coordination, right. And I think that’s what we’re returning to. And I’m hopeful that that is that’s where we’re headed by the work that we’re engaged in, knowing that we have many other partners that are helping us sustain this work. And so I so appreciate this platform in your time to be able to share a little bit more of our story.

Ellen McGirt Well, that’s just wonderful. I believe you’re right.

Jessica Helfand You’re so, passionate, on this on this subject. And the subject is, of course, many subjects. And I think the fact that we’re landing on love is the final, large sort of uber concept here makes this entire conversation even more humanitarian in its focus than I knew it was going to be. And we thank you so much for your time today.

Jorge Fontanez Thank you. Jessica. Thank you, Ellen. And I look forward to more conversations.

Ellen McGirt Well, Jessica, that was amazing.

Jessica Helfand What’s love got to do with it?

Ellen McGirt I’m going to be singing that song all day now.

Jessica Helfand I know all day, thanks to me. What an impressive individual he is. I had a student once who referred to people like Jorge as they land every plane. I mean, every sentence is just so considered. Tell me what you thought about this conversation and in particular with your business journalist hat on. What do you think is possible when businesses work in the way he’s thinking?

Ellen McGirt Business is hard. So put that on a t shirt. And transforming businesses is really hard. Lots of people sign up for a very big vision, only to have the challenges of actually making a business work diminish their lofty goals. And that’s when you get greenwashing. That’s when you get promises of worker voice and worker primacy, and that all sort of falls apart. But what I got from him today is that even though transforming business and capitalism is a work in progress, there are lots and lots and lots of people, more than I had really understood who are focused on this work. And when you if you could map that out, those little bright spots of optimism and innovation and imagination and love. I left feeling very optimistic. How about you?

Jessica Helfand I left feeling optimistic because of him. Because he is such a charismatic, captivating thinker. But I think for me in particular, because I’m not a business journalist like you are, Ellen, thinking about his view of marketing as something that’s not about the encouragement of consumption. That’s not about the sort of economic imbalances that are all too real and all to unfortunate in this moment in history. I think his focus very much is on the idea of training future leaders, educating consumers, making better choices, and sort of rebuilding communities around principles of a much more positive, forward thinking, collaborative kind of enterprise.

Ellen McGirt Before we move on, speaking of future leaders, this is the thing that comes up in this never ending whistle stop tour of reporting that I’m doing on this subject is that people at every level are no longer sure that the CEO, who was going to be successful in the more shareholder led world are going to be is going to be successful in the stakeholder led world, in the B Corp world. And that means a whole new crop of people with hi and Fred is here! That means a whole new crop of people.

Jessica Helfand I’m sorry. We had an entire season of dogs and no sudden we hear Meow meow.

Ellen McGirt I know he’s just wondering who I’m talking to.

Jessica Helfand That made my day. Hi Fred!

Ellen McGirt But you know, that that we’ve got a whole new crop of people with characteristics about building bridges and being open and innovative and being stakeholder focused are now, you know, this is their moment. This is their moment to rise through organizations. This is their moment to take on, you know, big projects, big tasks, forces, those kinds of things. And I’m excited to see who are going to be the CEOs of the future, because the things that make them successful are going to be different, I think, than the things that made CEOs successful in decades previous. So I’m excited about that. So is Fred.

Jessica Helfand You know what that music means. You know what that music means.

Ellen McGirt It’s big swing, small wins time. And this time, Jessica, you’ve got our big swing.

Jessica Helfand I do, and I just want to say, my favorite kind of big swing is when, success and reward come to hard working, deserving people. And this is a story about a hard working, deserving, and lovely person. The story I have to share this week with our listeners is the fact that the longtime curator, scholar and acting director of the RISD Art Museum researches the Rhode Island School of Design in Providence, Rhode Island, where I live, Sarah Ganz Blythe has been picked to become the next director of the Harvard Art museums. This is such a big thrill for me. I spend half my time in Cambridge. I go to those museums all the time. I love the RISD Museum. I’m a huge fan of Sarah, and you know, she’s someone who has just devotedly given her life and leadership and experience to serving these institutional museums in educational facilities. She’s taught, she’s helped researchers. She’s been an acquisitions person. She began her work at knowing Harvard and what they had there when she was actually an intern in the conservation department when she was still a college student at Wellesley. She’s just great. And it’s such a big win for Harvard, and we’re all going to be the beneficiaries of her phenomenal leadership. And I want to congratulate her as someone whose career I followed for a long time, and I’m just super excited to see what she does.

Ellen McGirt I love that.

Jessica Helfand And we got a little shout out from Fred.

Ellen McGirt I love that Sarah. Good job. Stepped up, took a big swing, got a big win. I can’t wait to see what she does going going forward. That’s wonderful. So in terms of small wins.

Jessica Helfand What you got?

Ellen McGirt I just want to say a shout out to any parents out there. I know you’re working hard. This is the week when all the little ones are going back to school. It is a thousand small wins to get, your your kids safely back to school. There’s so many things you need to manage. So, if you need to hear this message, you got this. You’re doing this. You’re doing great. We believe in you. You go parents. That’s all I got.

Jessica Helfand That’s fantastic.

Ellen McGirt That’s it for us this week. Join us in two weeks for our final episode of this season. You’re not going to want to miss it.

Ellen McGirt The Design of Business, The Business of Design is a podcast from Design Observer.

Jessica Helfand Our show is written and produced by Alexis Haut. Our theme music is by Warner Meadows. Justin D. Wright of Seaplane Armada mixed and mastered this episode. Special thanks to Adina Karp and Focus Forward Podcast Studio in Providence for production support. Anybody else, Ellen?

Ellen McGirt Special thank you to Fred the Cat for finding where I was hiding in the basement while I was recording and joining us and saying hello to the audience. And for more long form content about the people redesigning our world. Please consider subscribing to our newsletters, Equity Observer and the Observatory at DesignObserver.com.

Ellen McGirt The Design of Business, The Business of Design is produced by Design Observer’s editorial team. The views and opinions expressed by podcast speakers and guests are solely their own and do not reflect the opinions of Deloitte or its personnel, nor does Deloitte advocate or endorse any individuals or entities featured on the podcast.