With just a few days to go until 2024 begins, the inevitable lists of 2023 are current features in many information outlets. The most famous people, the most notable achievements, and the best and worst of everything are on people's minds as they reflect over the past year. Not to be left out, we have our own list: companies whose business models reflect the kind of mutuality that embodies the goals of better capitalism. These corporations are diverse in their offerings but have something in common: they all began as ethical startups.
Image Credit: Canva
What is an ethical startup? According to fastercapital.com, an ethical startup is a company
that is founded with the following characteristics as part of its business model:
A clear social and environmental mission
Transparent and responsible supply chains
Employee well-being and fair compensation
Community engagement and giving back
Long-term sustainability and scalability
We featured Patagonia, a stellar ethical startup, in an earlier blog this year. There are also companies that have reformed their model to be ethical, but this list features those that began with mutuality in mind. There are many other corporations that could be included in this list and may very well be featured in future blogs. For 2023, however, our standout startups are the following:
Fashion: Rothy's
Rothy's began in 2015 with a line of washable, recycled plastic footwear that did the amazing: a new business that survived and thrived through the Pandemic. The company has expanded its line to include a variety of shoes for men, women, and children, as well as handbags and totes. In 2021, Rothy's publicly committed to a goal of 100% economic circularity by the end of 2023. Circularity is defined as an business model that "involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible." Rothy's pursues this model by making all their products from recycled materials and owning their factory to control standards of production. Rothy's is also committed to a work environment that is built on inclusivity and collaboration. With global net sales of $88.9 million in 2022, it looks like Rothy's is on its way to becoming a leading fashion company in the years ahead.
Food and Beverage: Impossible Foods
Anyone who has tried an impossible burger lately can attest to the advances that meat substitutes have made in recent years. Started in 2016, Impossible Foods offers products that mimic beef, chicken, and pork, and that can have a significant positive impact on the health of the planet. A study from Quantis shows that plant-based "meat" requires vastly less land and water use than beef and generates far less greenhouse gases. In addition to their mission of pursuing planet health, Impossible Foods holds companies in their supply chain to a Supplier Code of Conduct, which requires them to comply with standards of safety and fairness. Though retail sales grew more than 50% in 2022, there have been some challenges in 2023, including the perception that plant-based products have some nutritional concerns. Impossible CEO Peter McGuinness met this issue head on by introducing a line of products last month that are certified by the American Heart Association and that promise to be better for both the planet and the people who live here.
Household Goods: earth breeze
Founded in 2019, this company gets highest honors for innovation. Born out of a desire to reduce single-use plastic laundry detergent bottles, earth breeze offers concentrated detergent "sheets" as an alternative. These sheets are made out of plant-based cleaners that are free of dyes and phthalates. Having personally used this product myself, I can attest to its convenience and effectiveness. It also takes up a lot less room on the laundry shelf! In addition to their products, earth breeze is heavily involved in community work and donates detergent to the consumer's chosen charity category through their "Buy One Give Ten" program. They also donate 1% of their revenues to ocean cleanup, a worthy cause as current studies predict more plastic waste than fish by 2050. To round out their involvement, they contribute to re-forestation and have planted 150,000 trees to date. Revenues for 2022 were $5.9 million, so this new and growing company is definitely growing in the right direction.
Waste Recycling: Vanguard Renewables
Another circular business model on our list, Vanguard Renewables turns organic waste from food and beverage manufacturers, restaurants, retailers, and municipalities into renewable energy. This process is accomplished by using microorganisms to convert that waste into natural gas that is then sold to utilities and businesses, thus completing the circle. This model not only keeps a significant amount of waste out of landfills, it also offers an alternative source of renewable and dependable energy that is scalable. Six years after its founding, Vanguard Renewables established the Farm Powered Strategic Alliance in 2020. This organization brings Vanguard Renewables together with Unilever, Starbucks, and the Dairy Farmers of America to boost food waste reduction and recycling, expand renewable energy production, and support generational farms and regenerative agriculture practices. BlackRock purchased the company in 2022 for $700 million, so the outlook for this business model appears to be extremely promising for the future of renewable energy.
Kudos to these and all other companies that began their business with the premise of making a better world while making a profit. As we enter into the new year, we at Better Capitalism look forward to seeing how all those business leaders whose innovation, determination, and ethical integration will lead the way into a more mutually beneficial future!
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