Is it possible to create a company that is good for the planet? We asked Jennifer Georgeson, founder of So Just Shop, to explain what an impact business is and how the way we shop can change the world.
“An impact business is one that balances profit and purpose equally to build a more inclusive and sustainable economy.” That’s how Jennifer Georgeson, founder of the conscious marketplace So Just Shop, defines impact business in a nutshell.
Basically, to save the world, we should all put our money where our mouths are. We are not going to change the way our capitalistic society works in a couple of years, but what we can do is support the small, sustainable businesses that are trying to make a difference in the world while providing a product or a service.
Imagine if we all ditched Amazon to only shop on eco-conscious, sustainable and ethical marketplaces (there are many) – the billions that Jeff Bezos owns would be scattered around the world, helping communities and making this planet a better place. Think about it next time to order something online.
But what is an impact business, exactly? Jennifer Georgeson tells us all about it.
What is the main difference between an impact business and a traditional business?
For most traditional businesses, profit is key to every decision they take, and success is defined by how much profit they have made. For an impact business, profit is just one component of success – equally important are your social metrics; most impact businesses also measure the impact on communities and environment. In the case of So Just Shop, our target metrics are profit, women out of poverty and sustainability of products and manufacturing processes.
What are the challenges of setting up an impact business?
Whilst this is slowly changing, impact businesses have found it harder to get investment funding as many traditional investors lack an understanding of the changing metrics of success. Impact businesses also take longer to reach profitability as costs of providing services or goods tend to be higher (e.g. because they are paying living wages and/or sourcing goods from ethical supply chains). However, in the longer term, impact businesses have proved to be more profitable and resilient than their counterparts, this has been particularly telling throughout the COVID epidemic.
What can businesses do to have a real impact on our society?
Everything! Whilst legislation has an important (and often neglected) role to play in making an impact, businesses have a voice on so many levels. Not only do they impact on their employees and the communities they work in, but also the customers they serve, which can lead to much wider changes in society. An example would be how The Body Shop campaigned against animal testing on products – their shop windows served to educate those who didn’t even shop in their stores and the thought of animal testing for cosmetics is abhorrent to the majority of the population.
Do you think impact business is the way forward for people who want to start a business?
Yes, the traditional model of capitalism has failed. It is no longer fit for purpose, the COVID epidemic has highlighted this, with fast fashion (one of the most polluting and environmentally destructive industries globally) taking a huge hit. We can no longer go on living like we do not have an impact on our communities, society and the environment.
How can a consumer know if a company is an impact business/if the businesses are transparent?
Well, this is where it gets a bit tricky as there is a lot of greenwashing going on and much certification is also too expensive for most small businesses to apply for. B Corp is a good standard, however, most companies (including our own) cannot go through the expensive certification process. Transparency is key though – keep asking questions and see how much information they have available on their site – we know exactly who made our products, where and how they were made. Every company should be able to share this information with their customers.
Picture: Karolina Grabows
