The business community has seen a shift in recent years. Many companies are using business as a tool for social and environmental change. Businesses are leveraging their work to build healthy, equitable, and regenerative communities. This trend is being reflected in several recent movements and certifications like the B Corporation.
B Corporation Definition
The basic definition of a B Corporation or certified B Corp is a for-profit company that uses its business as a force for social and environmental good. For example, an ice cream company that uses its flavors to create awareness on critical social issues. Or a toilet paper company that donates 50 percent of their profits towards clean water and toilets for everyone. Every B Corp company considers the impact of their business decisions on not just shareholder value but all stakeholders across the value chain.
Becoming a Certified B Corp
Each certified B Corp has completed a multi-question, robust assessment of their social and environmental performance as an organization and supplied documentation to validate their answers on the assessment. The assessment is then reviewed for high levels of accountability and transparency by the oversight organization, B Lab. Once the organization passes the review, or sometimes during the process, companies also amend their governance documents.
B Corporation Requirements
First, an organization must complete the B Impact Assessment or BIA. The BIA is an entirely free and online benchmarking and measurement framework for non-financial data metrics used by over 50,000 companies worldwide. It looks at five different areas of a company: governance, workers, community, environment, and customers. There is also a sixth company disclosure area that identifies any potentially sensitive industries, practices, fines, or sanctions of a company that are not explicitly called out in the rest of the assessment.
After completing the B Impact Assessment, companies undergo a multi-step verification process to review all the documentation provided and answers given. Each assessment must garnish a minimum of 80-points for certification.
In addition, B Lab performs a background check of the organization. Background checks include a review of public records, news sources, and search engines for company names, brands, executives/founders, and other relevant topics.
Once a business passes certification, B Lab creates a public page sharing the B Impact Report summary of a company’s scores on the B Impact Assessment by category. There is also an annual fee all certified B Corps must pay to B Lab to support the organization. It is based on a sliding scale by revenue.
What are the benefits of becoming certified?
There are several benefits to becoming a certified B Corporation. Here are the top five benefits that are most often touted.
1. Flexibility in Managing Your Business
Choosing to be a B Corp allows you to pursue broader management goals. Running a traditional for-profit business, your investors expect you to focus on shareholder value solely. That can make you a servant to your profitability. With a B Corp, your investors, employees, and customers know from the get-go that your goals are much larger than simply turning a profit. This gives you greater latitude to manage your business in the manner you desire, focusing on producing the results that are most meaningful to your business’s mission.
2. Benchmarking and Operational Risks
Financial metrics are great to measure but only tell a short-term story about the profitability of an organization. Non-financial metrics tell a much richer account of a business’s overall health and grants you a much longer view of the broad range of risks facing an organization. Economists and business experts now see that the top five risks within any business are ESG or Environmental, Social, and Governance concerns. Certification can help you identify and mitigate these risks. Frameworks, like B Corp certification, allow a business owner to benchmark and measure a whole host of non-financial metrics that have been typically hard to measure in the past.
3. Attracting and Retaining Talent
B Corps are attracting top talent, especially among employees who seek purpose in their careers. Certification helps promote and validate an employee-centric culture, which engages great candidates because of the company’s reputation as a great place to work. Instead of staffing your business with individuals looking for a paycheck, you can staff your business with employees who are engaged in what you’re doing. Companies with engaged workforces are more profitable and twice as likely to succeed as businesses with less-engaged workforces.
4. Real Credibility
When you become a B Corp, you can’t just claim to be sustainable or socially conscious — you must prove it. The certification process requires you to demonstrate through rigorous documentation how you’re creating tangible benefits for people and the environment. This means consumers and other businesses can trust that companies with B Corp status aren’t just claiming to benefit their community. They’re walking the walk.
5. Differentiation in a Competitive Market
Consumers are increasingly interested in buying products and services from companies that make societal and environmental commitments. A 2019 Deloitte survey revealed that more than 80 percent of consumers would be willing to pay more if a brand raised its prices to become more environmentally and socially responsible or pay higher wages to its employees. The demand by conscious consumers is already having an economic impact on the sales of consumer goods, as products with an element of sustainability have been
Who are some of the top B Corp companies?
When writing this article, there are 4,762 companies, in 77 countries, in 155 different industries, all operating with one unifying goal of using business as a force for good. Many companies are consumer brands that most folks use every day, like Ben & Jerry’s Ice Cream, Tom’s Toothpaste, Patagonia, Method Soap, and Athleta. Professional service firms like Sensiba San Filippo, Wendel Rosen Law Firm, or Beneficial State Bank are also B Corps. There is more than likely a B Corp for anything you need. I highly recommend consulting the B Corp Directory anytime you want to make a purchase.
Certified B Corporation List
For a list of the currently certified companies, along with their B Impact Report, visit BCorporation.net and click on the “Find a B Corp link” at the top of the page.
Interested in becoming a certified B Corporation?
Get in touch with our team of sustainability consultants to learn more about B Corporation certification.
