In the past, the good in corporations was often limited to corporate social responsibility programs or volunteering events. But in today’s world, spurred on by generational shifts and growing social crises such as COVID-19 and the anti-racist movement, those norms are changing.
This year alone, investments that take environmental, social, and governance factors into account have already ballooned to $740 million in Canada — over five times the amount Canadians saw invested in the same space last year ($142 million). Those values extend to consumer habits, as well: in 2019, a third of Canadians said they were willing to pay a premium for ethically and sustainably produced products (when you zoom in on Gen Z, that number jumps to 47 percent).
There’s clearly a need, and a strong desire, for more ethical and sustainable corporations across North America. And innovative startups are filling that gap — even in B2B industries that often go unnoticed.
One company that stands out for its holistic approach to social enterprise is Bellingham-based Tidal Vision — an American company that has developed a proprietary, zero-waste process for upcycling crustacean shells into chitosan, a non-toxic biopolymer that can be used in textiles, agriculture, and wastewater treatment.
Tidal Vision’s commitment to sustainability — from its sourcing through to its production — recently attracted an investment from the newly launched TELUS Pollinator Fund for Good, a $100 million impact investment fund that invests in businesses around the world driving enhanced societal outcomes in health, agriculture, the environment, and social and economic inclusion through new technology solutions.
“This isn’t about philanthropy. It’s about fueling greater social innovation through investments in companies that generate both financial and social returns for the benefit of our communities,” says Blair Miller, managing partner of the TELUS Pollinator Fund for Good. As with most social finance, financial returns from the Fund investments will go back to the investors — however, TELUS told Future of Good it may reinvest its own returns into the fund to further its cause. “Businesses today need to be forward-looking in addressing social issues because their business, employees, and the communities they serve are demanding it.”
Curious about what Tidal Vision is doing differently, and why the TELUS Pollinator Fund for Good invested in the company? We sat down with Tidal Vision to dig into the key processes and values that helped them build a social enterprise that impacts their community while turning a profit.
Make your mission part of your DNA
In the past, chitosan was a fairly niche biopolymer: it was expensive to extract from crustaceans’ shells; the extraction process produced large waste streams; and, in its final powdered form, it was often difficult to use as an ingredient.
When co-founders Craig Kasberg and Zach Wilkinson met in 2015, they knew there had to be a better way to do things. Kasberg had grown up enmeshed in the seafood industry in Alaska, and knew that crustacean shells were one of the most wasted byproducts of the seafood industry (in Europe alone, 250,000 tons of crustacean shells are thrown out each year).
“When I met Zach, we set out to develop the first commercially-viable and green process for extracting chitosan from crustacean shells,” Kasberg says. “We were successful because we ‘connected the dots’ in our extended networks to find other value-aligned people, with specific skills, who were motivated to contribute their expertise to an area of that development process.”
Tidal Vision’s commitment to extracting chitosan in a sustainable way led them to discover a more affordable method. Using sustainability as their guiding mission is, in the end, what’s allowed Tidal Vision to stand out from its competition.
“It’s been a positive from a business economic standpoint, in both the short-term and long-term,” Kasberg says. He continues:
“By not doing the traditional process that our competitors use, we had to develop another way to even get off the ground — and that focus led to us developing our zero-waste process that is also substantially lower cost. If we weren’t committed to that vision from the onset, we wouldn’t have developed a more economic process that’s also environmentally friendly.”
Transparency is king
Since Tidal Vision launched in 2015, Kasberg credits a large part of its success to being open and honest with their consumers.
Unlike many in the industry, Tidal Vision shares their pricing upfront with their customers, and they work collaboratively to lower the cost for them if they can hit certain volumes. They freely share their mission, plans, and setbacks, and in return, their customers have been generous in sharing both feedback and industry insights.
“My advice [to other leaders] would be to remain curious and ask [your customers] questions to try to really understand what it would take for them to switch the way they are currently doing things. We’ve only been able to make the progress we have due to our close relationships with our customers, who have the same motivations as we do,” says Kasberg. “They’re willing to share their insights with us so we can improve their business — and therefore, our success in that industry.”
Purpose and profit must go hand-in-hand
“Our founding thesis statement at Tidal Vision was, ‘Sustainability should not require a compromise — on price, convenience, or performance,’” says Kasberg — a key belief the TELUS Pollinator Fund holds, too.
Tidal Vision may have started with a mission to create a more sustainable chitosan extraction process, but the company didn’t stop there. “To gain the initial traction to reach the economy of scale where our technology began to be not just another green chemistry solution, but the lower cost and greener chemistry solution has taken us over five years,” Kasberg says. “And we still have a ways to go.”
For Tidal Vision, competing on price and sustainability wasn’t enough, either. Even after achieving the scale necessary to bring down their cost, when Tidal Vision discussed their original product with their customers, they realized the market wanted to buy chitosan in a more convenient form — which led Tidal Vision to develop their ready-to-use liquid chitosan solutions.
“When we succeed, it’s because we made our green solution lower cost, easier to use, and better performing than [customers’] current synthetic chemical alternative,” says Kasberg.
TELUS invested in Tidal Vision because of the company’s insistence on balancing purpose and profit — all the way through its supply chain. Upcycling crustacean shells already helps make the fishing industry overall less wasteful; however, Kasberg and his team take it further. Tidal Vision purchases crustacean shell waste solely from sustainable fisheries, which helps these economically disadvantaged players strengthen their resilience in a largely unethical industry. But the move helps Tidal Vision, as well.
“By purchasing byproducts from only sustainably managed fisheries we are strengthening those fisheries economically, which is good for our long term access to raw material necessary for our business,” Kasberg says.
Tidal Vision’s ethics are turned inward, too: research shows that a healthy working environment not only positively impacts communities, but positively impacts productivity and efficacy at work. In line with that philosophy, all full-time Tidal Vision employees receive medical and dental insurance, a 401(k) employer matching program, and 21 days of paid time off a year (the average, in the United States, is 10 days).
Make your own rules
In building a socially capitalist corporation, Kasberg says Tidal Vision has thrown out traditional business rulebooks.
“I would attribute our success to largely ignoring common business frameworks,” he says. “We don’t bother to look at competitors in the short term, or overly focus on short term metrics. Instead we look at how much trust and rapport we are building with our cornerstone customers and partners whose industry insight is key to our long term success.”
For other corporations wanting to align with more social and sustainable values, Kasberg suggests getting curious and asking questions on how they can improve — both externally and internally.
“My experience is that most corporations want to do the right thing and want to do better on social and environmental issues,” he says. “In other words, there is a market hungry for green and socially responsible solutions.”