Monday Author: Susanne Skinner
“The B Corp movement is one of the most important of our lifetime, built on the simple fact that business impacts and serves more than just shareholders—it has an equal responsibility to the community and to the planet.” ~ Rose Marcario, CEO of Patagonia
Benefit Corporations aren’t just companies, they are better companies. Better for employees, better for the communities they reside in, and better for the environment we live in. But what is a B Corp and why should we care?
B Corps are for-profit companies certified by the nonprofit B Lab, an organization that serves a global movement of “people using business as a force for good.”TM Based in Pennsylvania, B Lab created a program that certifies qualified companies as B Corps, with the “B” standing for “Benefit.” They are required to meet rigorous standards of social and environmental performance, accountability, and transparency.
A minimum score of 80 out of a possible 200 is required for B Corp certification. The significance of B Corporations and their ability to change the way we do business deserves our attention and support.
Why Companies are Becoming B Corps
Most Benefit Corporations are privately held, small- to medium-sized businesses. By registering and complying with the standards of a B Corporation, businesses have a way to publicly assert their identity as an organization that supports both shareholder and stakeholder success.
Unlike other legal entities (like 501c3 and L3C) a Certified B Corp or Benefit Corporation does not keep a company from making profits. In fact, many are extremely successful. There are more than 2,482 Certified B Corps from 50 countries and 130 industries committed to redefining the meaning of success in business. An additional 50,000 used the B Impact Assessment, a free tool provided by B Lab, to measure their impact and make improvements.
Businesses have traditionally been linked to maximizing shareholder investment. But as we have progressed into the 21st century there has been a paradigm shift in how that investment value is defined.
American corporations have become more environmentally conscious, creating a visible shift towards social and ecological concerns. This new-found awareness has had a strong impact on corporate governance, which has led to the organizational evolution of the Certified B Corporation.
Environmental awareness in companies is often a bottom-up campaign, with employees (Millennials in particular) using the power of social media to influence management and marketing to raise awareness and implement earth friendly changes.
The Rise of the Benefit Corporations
The first generation of B Corporations was certified in 2007. Since then, the number of firms earning this certification has grown exponentially. Being identified as a B Corp means companies can differentiate themselves from the old industry norm of profit and more profit.
Any company, regardless of its size, legal structure, or industry, can become a B Corporation. Once certified, companies integrate it as part of their brand and advertising strategies. It makes good business sense to align products and values under the banner of a socially responsible company. But—and this is important—If they claim their products or services benefit the environment, they must also prove it. Companies must re-certify every two years.
Business as a Force for Good
A B Lab certification is to a company what Fair Trade is to coffee and farm-to-table is to dining establishments and supermarkets.
Consumers are learning to care about the company and the products when they make a purchasing decision. Environmentally conscious buyers assign equal weight to a company’s people, products, and their commitment to the planet, disproving the concept that sustainability kills business.
B Corp certification is a strong signal to customers, employees and investors that the company wants to be a good corporate citizen. There were quite a few early adopters and certification continues to gain momentum.
In 2016 Patagonia donated their entire sales revenue from Black Friday—$10 million in merchandise sales—to charity. Ben and Jerry’s continues to launch ice cream flavors that call attention to social issues and commemorate everything from Black Lives Matter to iconic rock and roll groups.
Etsy, the global ecommerce bazar, is among the first certified B Corps to be publicly traded. The company earned a score of 105 out of 200 by paying their employees well above the minimum wage, giving them paid time off to volunteer and composting office food waste.
Warby Parker, the online alternative to overpriced eye ware, donates a pair of glasses for each one sold. To date, the company has distributed nearly 4 million pairs of glasses with their buy one, give one business model.
Method, the home cleaning company, turned the packaged goods industry upside down by creating a soap bottle made almost entirely from recovered ocean trash.
A New Business Leader Emerges
Despite the continuing deregulation and repealing of environmental regulations a new business leader is emerging, one that believes in the power of marketing and markets to bring attention to environmental problems.
These men and women are redefining what a successful company looks like. They aren’t necessarily names you’ve heard of, but they are leading by example; reshaping outdated business models by using their position, wealth and public personas to make a difference.
You can learn more about B Corporations on bthechange.com.