Carnegie was founded in 1950 by Robert Goldman, a remarkable man by any measure. He graduated from high school at 16 – number 2 in his class – just in time for the outbreak of World War 2, so he joined the Navy at the age of 17 and served in North Africa, Europe and the Pacific. After the war he graduated from Columbia University and shortly after graduation he founded Carnegie. Ahead of his time in many ways, Mr. Goldman built Carnegie on the foundation of a strong set of core values based on innovation, respect for the environment (before it was a thing) and transparency (before it was a thing). He was an innovator who put people first, no matter if they were employees, clients or business partners.
Those values still animate Carnegie today under the leadership of Robert Goldman’s son, Cliff Goldman, the current executive chairman. In a series of interviews, I had a chance to get to know the younger Mr. Goldman better and ask him about the decision to go for B Corp certification and the journey to get there.
Bob Beck (BB): How did you first learn about B Corporations and why did you decide to go for certification?
Cliff Goldman (CG): “People who know me will tell you that I read everything. I came across a couple of articles about
B Corps and what they are and the companies like Patagonia and Ben and Jerry’s that were B Corps at the time and I thought, ‘Wow! I think we do all that already and wouldn’t it be cool to validate our vision and how we do things by going through this certification’.”
“My first motivation was to validate for our employees that the way we do things isn’t just us saying it’s the right way to do things – they could feel it for sure, but I wanted them to have someone from the outside world acknowledge that doing it right is a pretty high bar. So I wanted to see if we could pass that threshold. I guess I also wanted validation of the vision of my dad that I’d been working hard to continue.”
“I knew that most people didn’t even know what a B Corp was so my first motivation was validation for our employees, but the second was that it’s about all stakeholders. The way we work with clients has always been about long-term thinking and partnering, and then the third thing was that it explicitly treats the planet as a stakeholder; considering the effect of what you do on the planet.”
BB: When did you actually start down the path?
CG: “I think I read about it in 2013 and we went through the certification process with B Lab late that year. In 2014 we were certified and I can proudly say we were certified without having to do or change anything we were presently doing.”
Perhaps the path to B Corp certification was as easy as it was for Carnegie because as a major supplier of wallcoverings, Mr. Goldman’s dad had been obsessed with finding a way to eliminate the PVC found in virtually all high-performance wallcoverings of the day.
His obsession finally led to the development of Xorel, launched in 1981.
From the beginning Xorel was a sustainable breakthrough, but the company continued to work to make it better and perfect innovative applications beyond simple wallcovering, earning Cradle to Cradle (C2C) Silver Certification in 2007. In 2013 another huge leap forward was taken when bio based Xorel was launched, earning a C2C Gold Certification underscoring its long-term commitment to minimizing the company’s impact on the environment.
To certify as a B Corp, a company must achieve a minimum verified score of 80 points on the B Impact Assessment. It asks questions about how the day-to-day operations of a company create positive impact for the company’s workers, community, and environment. Companies can earn further points if their overall business model can be shown to create positive social and environmental impact as well. These qualify the company for specific Impact Business Model points. Scores for Certified B Corporations are verified by the non-profit B Lab.
Each year B Lab publishes its “Best for the World” lists of top companies in each impact area: Overall, Community, Environment, Workers, Governance, and Customers. To make one of the “Best for the World” lists, a company must rank in the top 10th percentile of all Certified B Corporations for that category. Carnegie has made the Best for the World: Environment list the last two years consecutively.
So Carnegie clearly meets and exceeds expectations for environmentalism, but how about the employee stakeholders? The B Corporation website puts it this way: “People want to work for, buy from, and invest in businesses they believe in. B Corp Certification is the most powerful way to build credibility, trust, and value for your business.”
To get a feel for how Carnegie employees see the company I reached out via email to a cross section from company offices. Here are the responses I received.
“I started at Carnegie over 25 years ago, when I came to this organization I had no real insight or knowledge of eco conscious companies or practices. I would say just about from my first day at Carnegie there was always a practice of trying to find products and services that would be friendly to the environment. We have taken those practices ingrained in our Company’s DNA to the highest level. From our Bio based products to our recycling practices, and carrying on to purchasing from vendors who sell recycled products.” – Arthur Guida, Warehouse Manager, Long Island.
“When I show up at work every day, one of the greatest sources of motivation for me, is Carnegie’s commitment to sustainability and environmentalism, as recognized by our B Corporation Certification. It is in my nature to believe that corporate success and doing right by our environment can exist in unison. Working for Carnegie, who actively makes this choice to be a leader and a force for good, is inspiring- because it is just that, a choice.” – Kait Paradowski, Studio Director, Vertical Products.
“Initially when I joined Carnegie, I was mainly attracted to the studio’s innovation in design. However, one of the main reasons I’ve stayed with Carnegie for the past 5 years is due to the fact that the company’s overall values and morals align with my own.
Through further growth and exposure here, I now resonate with a lot of the same issues Carnegie as a company believes in. It has helped shape the way I design and work. In the past, I may have been more preoccupied with designing a beautiful product but being a part of B Corp has challenged this process in an exciting way.
As a designer responsible for finished products – while my top priority is to support Carnegie’s textiles – I also have to consider how these products are made, what is it made out of, how is it packaged, etc. In a way, our certification with B Corp pushes us designers to continue innovating for purpose, rather than just for profit, within a constantly changing, unpredictable environment.” – Michelle Ko, Studio Director, Space Division
“I am truly humbled to be part of a company that cares about their employees the way that Carnegie does. It is also impressive that Carnegie was a driver of consciously developing product that is better for our environment. I feel it is the heart of the company and I am inspired by that. Being an employee at B-Corporation has given me the chance to give-back and be part of a movement to do better together and I am grateful for that!” – Samantha Febrizio, Samples Project Manager, Long Island.
So what about the stakeholders who also happen to be outside shareholders? Is it feasible to be a B Corp if you are not closely held? Cliff Goldman says, “Yes.” In late 2016 he sold a majority share of the company to Calera Capital, a private investment firm that focuses on partnering with founders and management teams to drive significant value creation in their businesses, primarily in two industry sectors: Business Services and Specialty Industrials.
Said Mr. Goldman, “When I sold the majority of the company in late 2016 – I had many options. Among the major criteria for a partner was their understanding and excitement around us being a B Corp. I chose Calera Capital because I felt they understood where the future of business was heading – and they not only recognized that being good for the planet, clients and employees was a winning model – they personally aligned with our approach – and I feel they are looking for “like businesses” to Carnegie for their investment portfolio in the future….in short nothing has changed around our B Corp approach with the new ownership.”
Awareness of movements like the B Corporation movement is growing and there’s building consensus that some fundamental changes in business philosophy are required going forward. The CEO of Salesforce.com, Marc Benioff is among the tech industry leaders who are very outspoken about the need for change. In a TechCrunch interview, he stated, “I believe we’re going to see a new kind of capitalism emerge, that’s not the Milton Freidman kind of capitalism that’s just about making money. If your orientation is just about making money I don’t think you’re going to hang out very long as a CEO or as the founder of a company. You have to be more than that in today’s world…you certainly have to be about more than that in San Francisco and in our tech industry as well. If trust isn’t your highest value, you have to ask yourself, what is.”