Danone North America's CEO Wants to Lead a B Corp Movement

A year after Danone North America became the world’s largest certified B Corp, CEO Mariano Lozano says he is ready to see the company dethroned. In a wide-ranging interview with TriplePundit, Lozano invited other large organizations to bump Danone out of the top spot and help drive a global movement in transforming the way companies do business.

“We are today the largest certified B Corp, but hopefully only for a short time,” Lozano told 3p. “We’d like to see a bigger player come along who could leapfrog us and get certified. That would be the proof we are boldly leading the movement and moving the needle.”

Lozano’s leadership during this time was among the reasons he was named winner of Responsible CEO of the Year: Public Benefit Corporation at last year’s 3BL Forum.

Certified B Corporations are required to consider the impacts resulting from their decisions on their workers, customers, suppliers, communities and the environment. The first B Corps were certified in 2007. Today, there are over 2,700 certified B Corps in 64 countries, including leading brands Ben & Jerry’s, Patagonia, Seventh Generation and Eileen Fisher. The voluntary B Corp certification is administered by the nonprofit B Lab. Certifications are also based in part on a company's verified performance on the B Impact Assessment. 

“An Immense source of pride”

Danone North America had expected the certification process to take three years, but the company was able to achieve this within one year. “[It’s] because of the huge movement of people inside the company who worked to make it happen, who understood that we have the power as a business to serve the greater good. It was an immense source of pride for the entire team,” Lozano said. 

Danone North America’s parent company has nine goals aligned with the U.N. Sustainable Development Goals, which helped guide the company as it worked on its B Corp certification. Currently, more than 30 percent of Danone's entire global business, with revenues of about $30 billion, is B Corp Certified, with Danone North America representing 20 percent of the business, or about $6 billion.

The accelerated path to becoming the world’s largest B Corp was driven by Danone North America’s 2017 acquisition of WhiteWave, a $4 billion global leader in organic foods and plant-based milks. Lozano said both companies shared the commitment to becoming a B Corp, and once they were legally a single entity, “We could move quickly.”

Shareholders increasingly support B Corp certification

Lozano says that he did not encounter resistance to the B Corp certification from employees, the Board of Directors or shareholders. “I think it was clear it was top-down driven. Of course, we had many discussions around priorities and what needed to be done first. There is always tension between short-term results and the long-term view of a purpose-driven company.”  

Shareholders were pleased that the B Corp certification made Danone a more attractive borrower, he added. As part of a 2 billion euro syndicated loan with 12 banks, the lenders agreed to reduce loan margins by as much as 20 percent if the company met its B Corp milestones and other sustainability goals.

A purpose-driven journey

The idea of being a purpose-driven business is a concept that the Argentinian-born Lozano, who has been with Danone for 20 years, says he has long embraced. He has Nelson Mandela’s prison number tattooed on his arm, a reminder from the four years he worked for Danone in South Africa, where he had the opportunity to meet Mandela on the occasion of his 90th birthday.

“You can be inspired by Mandela on how despite decades of apartheid you can put aside your differences to build something together,” Lozano says. “When he passed away, this world became emptier.”

Under Lozano’s leadership, the company has prioritized a number of social areas that factored into the earning of its B Corp status. Among them was strengthening policies to support its 6,000 U.S. employees, including 26 weeks of paid parental leave for primary caregivers and what the company describes as a flexible personal time off policy.

In addition, the company also ensures “complete inclusivity for people who identify as transgender.” That commitment helped Danone North America earn a 100 percent score on the Human Rights Campaign’s Corporate Equality Index as among the best places to work for LGBTQ equality.

When it comes to the environment, as part of its commitment to be carbon neutral by 2050, Danone also offsets 100 percent of the electricity and water footprint of its manufacturing across the U.S.  

Inspiring the supply chain

Danone North America is also rolling out a compliance program to 100 percent of its suppliers with the goal to help the company track where they are located in order to support commitments to work with local suppliers where possible. 

“On the supplier side, what is so powerful about being a B Corp is the ability to inspire our thousands of suppliers and partners whom we purchase ingredients from and the retailers we sell our products to,” Deanna Bratter, senior director of public benefit and sustainable development at Danone, told 3p. “We are not just bringing B Corp to life for us, but also championing it across our supply chain.”

Among those suppliers are what Lozano described as Danone’s “farmer partners,” who are helping fulfill the company’s ambition to create more sustainable agricultural practices. That includes a big emphasis on regenerative agriculture—a model of agriculture that, according to Danone, protects soil, empowers farmers and promotes animal welfare.

“We want to be known as a ‘good’ big food company,” Lozano said. “We are delivering more choices to the consumer [and] to the farmer.”

Given the challenge of feeding a global population that is set to surpass 9 billion people by 2050, Lozano said, “We need to explore other agricultural systems that can be equally or more effective than our conventional systems.”

In the past few years, Danone has responded to consumer demands for non-GMO produced foods, including the conversion of about 65,000 acres to non-GMO cropland to provide feed for the cows that make milk for its Non-GMO Project Verified products.

“We offer all options—conventional, non-GMO, grass-fed—because we believe the consumer is moving in that direction,” Lozano said.

Image credit: Aline Ponce/Pixabay