1. Mission Alignment Working Group Profit-with-Purpose Businesses Working Group Chair: Cliff Priorcliffprior@unltd.org.uk www.unltd.org.ukcliffprior@unltd.org.uk B Lab UK: James Perry james.perry@bcorporation.ukjames.perry@bcorporation.uk www.bcorporation.uk 1

2. The most relevant Taskforce recommendations 7. Give profit-with-purpose businesses the ability to lock-in mission: governments to provide appropriate legal forms or provisions for entrepreneurs & investors who wish to secure social mission into future Taskforce recommendations as Market Steward: Create legal forms or regulations that protect the social mission of impact-driven organisations Relax regulations that prevent social sector organisations from generating revenues 2

3. Many social start ups, but so few achieve scale Critical bottlenecks at the early growth stages High risk: equity investment is relevant Asset/profit locked social ventures eg non-profits and social enterprises cannot easily take equity investment There is a huge wave of entrepreneurs who want to go social: eg 1 in 5 of all aspiring to startup in the UK Early stage “angel” investors are prepared to invest in social ventures if they can see a realistic return Solution: a model for social ventures which distribute profit and lock in social mission in other ways: profit with purpose business What’s the problem to solve? What’s the opportunity to tap? 3

4. Characteristics that define a profit-with-purpose business A Profit-with-Purpose Business is one that seeks, commits to, creates and shows social impact 4

5. Using the momentum: building confidence in the idea of profit-with-purpose business Standardising legals: model Articles for profit-with-purpose companies limited by shares Improved regulation and tax: Community Interest Company rules relaxed; new Social Investment Tax Relief Reporting: B Lab UK launching September UK exemplars: UnLtd’s Big Venture Challenge has supported PWP business Case studies: success stories to achieve confidence of all stakeholders Activities in the UK 5 Telefonica’s Wayra UnLtd tech accelerator for social impact has outperformed all 12 of their commercial accelerators in terms of investment, mainly through profit with purpose business candidates. Oomph! Wellness: 498 care staff trained 16,100 classes delivered 278,200 attendances 98% of staff recommend Significant or very significant impact on: - physical mobility 59% - social interaction 81% - mental stimulation 71% Quality of life up 10% A profit with purpose business for improving lives of older people £300k equity investment

6. Canada, France, Italy, Japan: legislative changes under underway, allowing for social & enterprise combinations USA: continuing growth in number of States allowing Benefit Corporations Germany: growing interest, Award for exemplar, NAB EU: EUSEF standard for social investment funds, GECES work on social impact reporting B Corp expansion: into Europe, Australia, Canada, Africa Informing the lawyers: published legal analysis of 8 countries by Orrick; outreach to lawyers through Thomson Reuters Foundation, raising awareness Beyond G7: UnLtd provided materials and support to the 52 countries with GSEN members. Examples of progress in Australia, Taiwan, Thailand, Colombia, Chile … Other country activities 6

7. Cultural challenges: “profit and purpose don’t mix” Vested interest challenges: “we don’t need this” Sceptical challenges: “it won’t work” “there will be mission drift” “it just slows down the entrepreneurs” Awareness challenges: it has taken decades for social enterprise to be recognised even in pioneer countries Connect to population level interest: start from where the entrepreneurs and investors are, engage those already doing it, build a movement Demonstrate the reality: focus on real enterprises, real impact, showcase their work, don’t focus on the plumbing Create the permissions: legal permission, accreditation The Challenges and Solutions 7

8. G8 Social Impact Investment Taskforce The UK context: Where’s the social business frontier? 8

9. What is a B Corporation? Regular Business No Asset Lock No Social Mission No Social Performance Test Social Sector Organisations Asset Lock Social Mission Lock No Social Performance Test Before global movement of people using business as a force for good

10. What is a B Corporation? Regular Business No Asset Lock No Social Mission No Social Performance Test Social Sector Organisations Asset Lock Social Mission Lock No Social Performance Test Before Regular Business No Asset Lock No Social Mission No Social Performance Test B Corporations No Asset Lock Social Mission Lock Social Performance Test Social Sector Organisations Asset Lock Social Mission Lock No Social Performance Test After global movement of people using business as a force for good

11. What is a B Corporation? Regular Business No Asset Lock No Social Mission No Social Performance Test Social Sector Organisations Asset Lock Social Mission Lock No Social Performance Test Before Regular Business No Asset Lock No Social Mission No Social Performance Test B Corporations No Asset Lock Social Mission Lock Social Performance Test Social Sector Organisations Asset Lock Social Mission Lock No Social Performance Test After global movement of people using business as a force for good

12. B Corporations are a global movement 1,307 B Corporations 121 Industries 41 Countries 1 Unifying Goal 425 B Corps (35%) outside the U.S. In 2014, more new B Corps outside the U.S. than inside global movement of people using business as a force for good

13. 201220132014 2015 This global movement is growing global movement of people using business as a force for good

14. The UK has a long and distinguished history of social businesses Target launch September 2015 with over 50 companies B Corporations will launch in the UK in Sept 2015 Effort led by experienced entrepreneurs who lead UK B Corporations More demand from business to change than capacity to respond to this desire global movement of people using business as a force for good

15. Launch inspired by the work of the G8 Social Impact Investment Taskforce Also working with the UK National Advisory Board to pilot a new variant, with a guardian shareholder to lock-in mission Based on the concept of a Golden Share The UK will launch B Corps and pilot a ‘Mission Locked’ B Corp global movement of people using business as a force for good For Illustration

17. Building a new sector of the economy 1,307 B Corporations 121 Industries 41 Countries 1 Unifying Goal global movement of people using business as a force for good