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Agencies Agency Models Mergers and Acquisitions

B Corp makes agencies attractive to dealmakers – it’ll change your business model too

By Nick Berry | Partner

April 13, 2023 | 10 min read

Columnist Nick Berry of M&A advisory practice Green Square sits down with Engage Interactive’s Alex Willcocks to find out what B Corp status has meant for the digital agency.

Engage

B Corp status has sharpened Engage’s offer to clients and staff, says its boss / Engage

Back in August, I wrote about how environmental and social credentials are an increasingly important value driver and influence on M&A activity. Since then, there is no doubt that both the backlash against greenwashing and demands for agencies and clients to show true sustainability commitments are growing stronger.

London has now been dubbed the B Corp capital of the world and the UK has over 1,000 B Corps, with more businesses seeking accreditation all the time. In the agency world, Havas was an early champion of the B Corp movement and was accredited in 2018. Xavier Rees, chief executive of Havas London at the time, said: “As well as being the right thing to do, there is a substantial business benefit to B Corp. With people increasingly environmentally and socially conscious, and with global clients now expecting their suppliers to have a point of view on these issues, B Corp certification will be a key differentiator when attracting both talent and new business in an increasingly competitive environment.” This message resonates even stronger, five years on.

Agencies have always acted as a barometer of the public’s consciousness. They are in a powerful position to lead clients in the right direction towards real change and true sustainability, as opposed to tokenism and empty promises to which consumers are now wise. So, I caught up with Alex Willcocks, chief exec of Engage Interactive, a digital agency based in Leeds, to get under the skin of how the process of becoming a B Corp has helped support and enhance its internal culture and external perception.

So Alex, tell me what made Engage become B Corp certified?

“B Corp first appeared on our radar in early 2020, at which time only around 300 UK businesses had become accredited. There were some brands I already admired on the list, such as Alpkit, Cook Food and Patagonia, which made us look further into the certification. On digging deeper, it was reassuring to see we were actually already doing a lot of the things B Corp is looking for. Naturally, we had a number of areas to work on and improve, but it was definitely a door half open, which gave us the confidence to proceed with the full process.”

Has B Corp status helped to attract and retain staff?

“It certainly helps attract and recruit the right kind of people, who are looking for a more holistic work experience versus perhaps being solely motivated by salary.

“Churn is one of the biggest costs to a business. Not just in money, but also in disruption and time to onboard and integrate. That’s why keeping an engaged and happy team is so important to me. Going through the process encourages you to improve your workplace diversity and inclusivity as you strive to score better in these areas, helping you make sure everyone in the business feels valued and has a sense of belonging. It’s also proven that businesses with highly engaged employees are more likely to significantly outperform their industry peers in terms of growth in profit.”

How did clients react to the news?

“The reaction was unanimously positive. We try to work with brands that are in some way making their own positive impact, be that through B Corp or other initiatives. Many of them were therefore already familiar with the process, so appreciated the effort and time taken to get certified, which ended up being about 12 months from start to finish.”

Has B Corp status changed the way you do business or look for new clients?

“It’s definitely helped shape our new business strategy. Our vision is to become the digital agency of choice for brands using business as a force for good. Our growth plan, therefore, has a clear focus on getting on the radar of more brands that align with this vision and speaking to them about how we can fuel their growth online through the three core pillars of our offering; people, purpose and performance. Each pillar’s legitimacy is supported by a relevant accreditation, so for our people that is our Great Place to Work certification; for our purpose, it is our B Corp Certification; and for our performance, Engage is the UK’s highest-rated B Corp Agency on The Drum Recommends. We’re confident this will be a compelling enough story and proposition to attract more like-minded clients to work with us and enable growth while ensuring that we deliver exceptional service to our existing clients and retain them.”

Any concerns about the movement?

“While the B Corp movement is still relatively small, it’s definitely gathering pace and is one of the most common topics I get asked about by other business owners and brands. Some people have concerns over what happens when B Corp is just something every business has and becomes less of a differentiator. Personally, I think that would be fantastic because if there are more businesses with B Corp, there are more better businesses. The other way to look at it is you risk getting left behind in a competitive market, you may struggle to attract like-minded talent and could miss winning key contracts as procurement starts to ask for certifications such as B Corp as a prerequisite to pitch.”

What has been the biggest benefit of achieving B Corp status?

“I’d have to say the network it has opened us up to. The wider UK B Corp community is very active through the ‘B Hive’ (get it?) and there’s a genuine passion for championing and growing the movement. More locally, the community has put us in contact with some fantastic companies, all of which have a similar view of the world and want to make a positive impact.”

What will this achieve in the long run for Engage?

“I just hope it legitimizes Engage as a business that cares about how we do business. This in turn should help us attract the right kind of people to join us and the right clients to want to work with us. And if you’ve got great clients and a great team, I think that’s something to be proud of.”

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Evolution rather than revolution

A lot of the points cited by Alex above are fundamental to building a solid business. So becoming a B Corp seems more like evolution as opposed to revolution from a company culture perspective. This naturally underpins a solid platform for growth and, when the time is right, will ensure many ticks are in the right boxes for acquirers.

There is a growing number of examples in a variety of sectors where acquirers have targeted B Corps. Unilever was proactive earlier than most, with five different B Corp acquisitions in 2016 and 2017. Other conglomerates have followed suit and actively encourage their brands to pursue accreditation. Coca-Cola’s Innocent Drinks obtained B Corp status in 2018 and Danone proudly promotes the fact 70% of its group global sales are now from its various B Corp entities.

Banks through to private equity firms are now using the B Impact Assessment to review their internal activities and that of their portfolios. So as acquirers become more comfortable with what’s involved in obtaining B Corp status and what it means operationally, this will help in due diligence. They will understand the rigorous assessment that has already taken place in key areas and it will help agencies stand out as well-structured, progressive and differentiated.

Nick Berry is a partner at Green Square.

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