B Corps; What You Need to Know
The demand for B Corp certification rose by 23 percent in 2020, signaling a global shift in business priorities.
Today, there are over 2,800 B Corps from 150 industries across 60 countries, representing 150,000 workers and turning over $50 billion in revenues, reports Working for Women. According to some, this transition is an easy decision. Eva Ross, Chief Marketing and Customer Officer at Sendle, a carbon neutral shipping service in Australia, believes that becoming a B Corp is to accept some “simple truths, like that it’s wrong to pollute the planet and profit at the expense of the environment and society.” She writes, “It’s not hard to imagine that someday soon, failure to have B Corp certification may become a business risk.”
So what is a B Corp?
B Corps are companies that meet the highest standards of verified social and environmental performance, accountability and transparency, certified by the non-profit B Lab. They have transformed the idea of corporate success, focusing more on solving social and environmental problems through markets, rather than focusing on profit.
Big companies around the world have jumped on the bandwagon. These include Laureate, the world’s largest higher education network’, Brazil’s Natura & Co that encompasses The Body Shop, Aesop, and Avon; O-Bank, the first native digital bank in Taiwan; as well as Patagonia, Ben and Jerry’s, Kickstarter and Coursera. Media outlet the Guardian is also a Certified B Corp.
There are also many women-led companies that have gained B Corp certification, which Global Ambassador of B Lab Kim Coupounas praises.
“These businesses believe fundamentally in being a force for social good and elevating women’s economic independence and prosperity,” she told Working for Women, which itself is certified.
Why become a B Corp?
Consumers around the world are saying they will gladly pay more for sustainable brands, according to Harvard Business Review. Multiple studies, across several years, have indicated a growing trend towards increased prosperity for companies that focus on sustainability. According to a Nielsen report, “Sales of consumer goods with a demonstrated commitment to sustainability have grown more than 4% globally, while those without grew less than 1%.”
B Corp Certification shows that you’re a business that’s interested in the success of both your shareholders and your stakeholders, from your employees to your customers. It’s a great way to communicate your values to customers, in a world where consumers care about what they’re contributing to.
Having B Corp Certification helps to attract top talent among younger people who are seeking meaning in their careers. Patagonia has reported that B Corp Certification helps promote and validate its employee-centric culture. Given their reputation and certification as a great place to work, they find it easier to attract great candidates.
You could argue that there are many certifications these days for specific products. Fairtrade for coffee, GOTS for textiles, etc. But B Corp certification evaluates all of the possible metrics, from worker engagement to community involvement, and environmental footprint. This sets you apart from other companies, who possibly just have good marketing. As a B Corp, you have the whole package.
How to get certified
B Lab measures your sustainability and social impact with the B Impact Assessment (BIA). To become a B Corp, you need to score a minimum of 80 points out of a possible 200. The Assessment is based on how a business creates value for its non-shareholding stakeholders. Rather than following the traditional shareholder-centered corporation’s governance philosophy, a B Corp can demonstrate that it has made amendments to its business model to ensure it incorporates the interests of all stakeholders.
After a company receives its B Corp certification, it must amend its legal governing documents to require its board of directors to balance profit and purpose. Companies pay an annual certification fee, which licenses them to use intellectual property like the Certified B Corp logo. This fee starts at $1000 and scales with revenue.
Final say
Eva Ross of Sendle writes that becoming a B Corp is to meet the highest standards of social and environmental performance, public transparency and legal accountability. “It’s a process that involves peeling back the layers of a company’s operations and business model to assess its positive impact on the world.”
There’s little doubt that there is a current global trend towards sustainability. Combined with the popular belief that ethical and sustainable businesses are vital for the future, and the personal, moral benefits of running a conscious business, even if you do not specifically seek out B Corp certification… why not steer in that direction?
Written for Empowering a Billion Women, June 30 2021
