Why B Corp?An engine accelerating the coexistence
of business feasibility and sociality

My name is Wataru Murakami, and I work as Creative Director at the Kyoto branch of Loftwork. The Kyoto office is located on top of FabCafe Kyoto, allowing for dynamic synergies among both teams.

In recent years, societal issues such as the loss of biodiversity and climate change have become too big to ignore. However, instead of a straight choice between protecting the environment or prioritizing economics, there are calls for a resolution that aims to strike a suitable balance between both sides. Although many people understand the basic concept that a “great company” is one that is beneficial for both the environment and society, the subject can be too extensive for them to get a good sense of what it entails.

I previously volunteered with a Regional Development Cooperation Corps to create jobs that took advantage of the unique characteristics of the land. At the time, one of the issues our group confronted was that even if you try to do “something good,” it may not be viable as a business or elicit empathetic responses beyond a certain level.

With these factors in mind, what makes a great company not only for shareholders and customers, but for the people who work there, the local community, and also the natural environment? This question was reexamined at the “crQlr Meetup Kyoto: Exploring balanced relationships between people and between humans and nature from the perspective of B Corp” held in FabCafe Kyoto in May 2023. As the title suggests, the event took as its point of reference the B Corp initiative—an international certification given to companies that act with high standards in all aspects of environmental and societal issues”

The following two points were included in the discussion as items in the “B Corp Interdependence Declaration.”

• “All businesses shall operate in relation to humans and the climate.”
  
• “All acts should be conducted with the understanding that we are interdependent on each other, hence our responsibility to each other and the future generations.” 

One of the guests at the event was Yuichi Tomohiro, Co-CEO of Sea Vegetable LLC, a Japanese company that operates interdependently with local communities and the natural environment. Additionally, Lina Sakai from Fermenstation Co., Ltd., the first Japanese start-up company to receive the B-Corp certification in 2022, was welcomed as a guest. Their discussion also included FabCafe’s CCO Kelsie Stewart, who serves as the chairman of the crQlr Awards, a global award that designs a circular economy.

The first presenter was FabCafe CCO Kelsie Stewart, who was also involved in founding the crQlr consortium. She spoke about the functions of B Corp using the question “How are ‘great companies’ defined and measured?” as a starting point.

“There are various conditions that make a ‘great company.’ These include fulfilling social responsibilities, employee wellbeing, communication transparency, and satisfying customers. B Corp exists to provide a framework for realizing these aspects while also communicating the values of the company to the world.” (Kelsie)

So, how can these values be communicated in a way that elicits both emotions and interest? Kelsie used one of the crQlr Awards winning projects as an example.

“AIRBUBBLE from ecoLogicStudio—a London-based architecture and urban-design studio—is a playground that purifies the surrounding air with pumps that are activated by the jumping around and playing of children. This is one form of communication that effectively transmits the message of the company, organization, and artist while constructing a win-win relationship between people and the environment.” (Kelsie)

Yuichi Tomohiro, Co-CEO of Sea Vegetable, gave the next presentation. He started his session with the question, “How many varieties of seaweed have you eaten?”

“It may not immediately come to mind, but you’ve probably eaten at least a dozen or so types. Conversely, there are around 1,500 varieties of seaweed growing in Japan’s coastal waters. What’s more, none of them are poisonous, so they are an edible ‘treasure trove.’ Japan is on the cutting-edge when it comes to seaweed consumption and is gathering attention from all over the world.” (Tomohiro)

However, this treasure trove is progressively shrinking due to isoyake (seaweed denudation), a natural phenomenon that depletes seaweed and kelp beds. Sea Vegetable extracts seeds from various types of seaweed and cultivates them with minimal environmental impact both on land and in the sea to promote their revival.

“Up until a few years ago, there was so much seaweed growing that you couldn’t see the ocean floor, but now you can be submerged for an hour and still not even see one clump. If a mountain above ground suddenly became barren everyone would be surprised and it would probably be all over the news, but there isn’t much buzz about seaweed because we can’t see into the ocean. Seaweed is called ‘the cradle of the sea’ and the number of fish also decreases if it disappears, causing a large impact on the ecosystem. Our team aims to restore the ecosystem by providing fishermen with seaweed seeds. They float them in the sea so they can grow, and we buy it from them when it’s ready.” (Tomohiro)

In the past, only a few types of seaweed seeds such as kelp species like wakame and kombu were available, and they couldn’t be cultivated in unsuitable waters. But currently, Sea Vegetable has established cultivation technology for around 30 varieties of seaweeds, and the team provides seeds that are suitable for different types of environments so vacant sea areas can be effectively utilized. In addition to sea cultivation in cooperation with fishermen, they also use aquariums for cultivation on land.

“There are cultivation bases located throughout Japan, and various people—including those with disabilities and seniors—work on them. It is important to polish the empty aquariums until they shine in order to produce delicious seaweed, but I didn’t think I could keep going after I did it for three days straight. It was around that time that I happened to meet an individual with an intellectual disability who wanted to work with water every day. When I asked them to clean the tank, they did an excellent job and seemed to really enjoy it, so now they have become one of my best partners.” (Tomohiro)

In addition to cultivating seaweed, Sea Vegetable also proposes new ways to consume it.

“Cooks are testing out new recipes in the kitchen every day. Even if our team can produce delicious seaweed, it’s not possible to give back to the fishermen and other people who work for us unless the product can be sold. People often stick to conventional methods of eating seaweed like putting wakame in miso soup or stewing hijiki, but Sea Vegetable is looking for new ways to eat and preserve it, like making soy sauce and drinks through fermentation, not to mention using seaweed in other dishes. The goal of our team is to achieve a state where the food culture of seaweed enriches the lives of those who eat it, thereby enriching the ocean as a result.” (Tomohiro)

Popcorn covered in Sea Vegetable’s “dried green laver shavings” was distributed at the event. The rich aroma and flavors from just one bite were all it took to elicit surprised reactions of, “Did dried green laver always taste this good?”

Next, Lina Sakai, CEO of Fermenstation, made her presentation. Fermenstation is an R&D-based biomanufacturing startup centered on fermentation technologies. The company produces ethanol and raw fermented materials for use in cosmetics using rice grown in abandoned or fallow land, as well as unused biomass such as residual (pomace) produced in the manufacturing process of food and beverages, in addition to agricultural products that fall outside of distribution standards.

The factory, which is located in Iwate Prefecture, uses various initiatives to reduce the impact on the environment.

“In addition to using natural energy and reducing the amount of water used, the factory produces zero waste. The residual from producing ethanol is used as a raw material for cosmetics, and anything leftover beyond that is given to chickens and cattle as feed. The eggs of those chickens are incredibly delicious, and residents use them to make cookies or other processed foods. Also, the feces from the livestock are good quality, so they can be used as compost. Our company works on this circulation project with everyone in the town, and without their cooperation, none of this would be possible. Our work with the community goes beyond the level of collaboration; everyone is working together as a tightly knit team.” (Sakai)

Sakai further explained, “Even before I started Fermenstation, I thought it was essential to create a company where business feasibility and sociality could coexist.”

“I previously worked in the financial sector, but I always wanted to do something about the waste problem. I went back to college and studied about fermentation before launching my company. While working in finance, I went on overseas assignments to places like America and seeing companies that worked to solve social issues while lightly doing business on the side significantly influenced me. When I went to Europe for business talks last year, straight off the bat I was asked ‘What kind of social impact is your company making?’ before any details on product functions were discussed. If everyone had this type of perspective, the world would be a different place.” (Sakai)

In 2022, Fermenstation was the first startup in Japan to receive B Corp certification.

“When rediscussing the goal of Fermenstation with our executive members, I was told we should ‘put more emphasis on achieving a coexistence of business feasibility and sociality.’ Since B Corp certification seemed useful to reach this goal, the company decided to try for it. I believe that B Corp is one means of self-governance for us. Having eyes on you is a good motivation to keep sticking to your principles. Another benefit of obtaining the certification is that Fermenstation became part of the B Corp community. I am always encouraged by participating in serious study groups with the other members, making policy proposals together, and having comrades that work as a team to change the world.” (Sakai)

The latter half of the event featured a discussion among the presenters. Kelsie started the session with a question.

Kelsie: When did you feel that someone truly understood your company was not being run just to make a profit, but was a ‘great company’ that benefitted nature and society?

Sakai: I believe that basically everyone who works with us understands this from the bottom of their hearts. However, some imagination is necessary to understand what our company is doing. For example, it’s difficult for most people to immediately take the social issue of disposing of apple pomace seriously, so gaining understanding requires a little creativity. I think the team is getting through to them by doing things like providing explanations that help cultivate the imagination and taking people to see our worksite.

Tomohiro: Our clients are important, of course, but so are all the people who work for us. All of Sea Vegetable’s production sites are in remote locations where it is difficult for those with disabilities or seniors to find work. With that in mind, I believe it’s very important for them to be able to healthily live and work in those areas through their work with Sea Vegetable. We are incredibly grateful to them for all their hard work, and they are thankful for us, as well. The fact that this appreciative relationship exists likely means there is a mutual understanding in place.

Kelsie: I would like to ask how you view stakeholders in your business.

Sakai: Fermenstation has an incredibly wide and diverse stakeholder base. Not just people, everything—from one end of the circulation cycle to the other—is involved in our business, and it can’t run without all of them being present. You could say that even the global environment itself is a stakeholder. Our company works with such diverse groups that even the “language” used when interacting with—for example—farmers and the employees of cosmetic manufacturers is different. I think being involved with people from so many walks of life is one of the best parts about working at Fermenstation.

Tomohiro: I also believe that the sea is probably one of our stakeholders. From a business standpoint, it would be safer and less risky to focus only on land cultivation. As to why Sea Vegetable also does sea cultivation, if our company can contribute to society through what we cultivate and be involved in a positive way that doesn’t hurt anyone, that’s the path we’ll take. I used to be the type who knew about social issues in my head, but never took any action. That’s why Sea Vegetable is aiming to change the situation through the accumulation of introducing people to delicious seaweeds they’ve never tried before and making them want to serve them as part of their daily cuisine.

Kelsie: It sounds like you have a diverse variety of stakeholders indeed. As Mr. Tomohiro emphasized by stating the importance of “deliciousness,” I think how emotional responses are approached is a pivotal aspect. B Corp has significance as a communication tool that elicits an emotional response of “this product matches my values” in people who see the certification mark. Even for our crQlr Awards, we seek to draw out emotional responses by looking for products, technologies, and materials in any genre. Increased emotional responsiveness helps customers feel like they are part of a community. I think that even people who don’t interact with nature much because they live in cities still have some sense that they are part of it. It is becoming all the more important to approach these notions through business.