Modern business is arguably being driven more and more by a new breed of leader – and these leaders are reshaping the world as we know it by using their corporate clout to solve global challenges. One way they are doing this is by making their companies Certified B Corporations.
Certified B Corporations (B Corps for short) are Benefit Corporations that redefine what it means to be successful in business.
What makes a business a Certified B Corporation?
Being a Certified B Corporation is special. This title sets companies apart by telling the world that they “Meet the highest standards of verified social and environmental performance, public transparency, and legal accountability, and aspire to use the power of markets to solve social and environmental problems.”
The title of Certified B Corporation also shows that these for-profit companies have been thoroughly vetted by B Lab (a non-profit organization that created, and awards, the B Corporation certification).
B Lab decides if the company in question passes the rigorous tests for those previously mentioned high standards (Overall social and environmental performance, public transparency, legal accountability, and aspiration to use the power of markets to solve social and environmental problems).
Some B Corps You May Have Heard of…
The number of companies actively seeking B Corp status is constantly growing (access full directory of B Corporations here).
Here are 12 corporations that you have probably heard of but may not have known about their B Corp status:
Apparel
Food & Beverage
Cleaning & Personal Care
How rigorous are Certified B Corporation standards?
Becoming a Certified B Corporation is a very involved process that can be boiled down to three steps:
Step 1. Meet Performance Requirements by completing the B Impact Assessment. The B Impact Assessment is a scored assessment of the overall impact of a company on its stakeholders. The minimum score required to be considered for B Corp status is an 80. The maximum possible point total is 200.
Step 2. Meet Legal Requirement(s) by determining whether a company will need to amend their governing documents or adopt benefit corporation status to receive certification (this varies based on the state of incorporation and corporate structure).
Step 3. Make it official by signing the B Corp Declaration of Interdependence and Term Sheet. This equates to a B Corp certification term of two years – with proof that the company meets the performance requirements and legal requirements, acknowledged participation in a Certification Evaluation if randomly selected, and submission of annual certification fees based on a tiered structure.
*All process information is accessible through bcorporation.net.
What being a B Corp means to us
Why should companies become a Certified B Corporation?
While the motivation to become a B Corp seems like a no-brainer, the end result ultimately has to make sense from a business standpoint.
Here are a few business-driven reasons to become a Certified B Corporation.
Lead a movement
According to bcorporation.net, B Corps are redefining what it means to be successful in business as they “lead a growing global movement of people using business as a force for good. Through the power of their collective voice, one day all companies will compete to be best for the world, and society will enjoy a more shared and durable prosperity for all.”
— Example —
Patagonia has been a successful and sustainable company from its inception. They are a front-runner that is consistently proving that sustainability does not kill business. While remaining green and true to their founding principles Patagonia was able to grow from a small startup to a 750 million dollar company in 2015.
In the world of B Corps, Patagonia’s 2016 B Impact Assessment score was an impressive 151 out of a possible 200 (the median score is 55 for all companies).
Stand apart from those that say they do
“90% of Americans say that companies must not only say a product or service is beneficial, but they need to prove it.” – Cane Communications
— Example —
As a 100% employee-owned and the 4th largest craft brewer in the US, New Belgium Brewing has earned their position as one of the most sustainable breweries in the nation. The Fort Collins, Colorado-based brewery views their sustainability from a holistic perspective as they use science-based metrics to track their own environmental performance.
New Belgium diverts 99.9% of its waste from landfills and has been able to reduce their water use per barrel of beer to 3.5:1 (averages range from 6:1 to 10:1).
If that isn’t impressive enough, New Belgium’s B Impact Assessment score is 142 out of a possible 200 – the median score for all companies is 55.
Attract investors
The strict standards required to be a B Corp show great company stability – an appealing quality to investors.
— Example —
Plum Organics is a unique certified B Corp. According to TriplePundit, what makes Plum unique among other Benefit Corporations is that “Just weeks before its reincorporation, the company was purchased by Campbell Soup Co., a publicly-traded industry giant. This made Plum the first Benefit Corporation to be wholly-owned by a public company in the United States.”
After the purchase, some shoppers were nervous but Plum managed to maintain their autonomy. The outcome was a strengthening of both companies. According to TriplePundit, Campbell’s stock price continued to climb after the acquisition and Plum was able to “reach more families across the country,” according to co-founder Neil Grimmer.
Get more exposure
B Lab not only makes sure that the Certified B Corporations meet their requirements but also actively nominates and advocates for the companies they approve. Some B Corps have even landed the following top honors: Bloomberg Businessweek’s Most Promising Social Entrepreneurs, Inc 500/5000, and Good Magazine’s Good Co. Project.
B Lab also reached roughly 19 million people through nearly 50 articles about individual B Corps published on Care2 (a social networking website that connects activists from around the world with other individuals, organizations and responsible businesses making an impact).
In addition to B Lab’s efforts, CSRwire (the leading newswire for sustainability news) offers all B Corps free press announcements of their certifications. These announcements are promoted by professionals and media outlets that reach over 80 million people globally.
Differentiate from the ‘greenwash’ crowd
Greenwashing is a spin in which green PR or green marketing is deceptively used to promote the perception that an organization’s products, aims or policies are environmentally friendly.
A Harvard Business Review B Corp Study found that, “Certifying firms often highlighted how a B Corporation certification would help them stand out “in the midst of a ‘greenwash’ revolution” among large companies, and “help consumers sort through the marketing hype to find businesses and products that are truly socially and environmentally responsible.””
The report also claimed that “Increasingly, corporations are donning the persona of a responsible citizen, while continuously performing practices to maximize profit. These contradictory tendencies motivate traditionally “green” and ethical businesses to unite and stake a claim to their authentic difference, fueling the growth of B corporations and other new types of organizations. For mission-driven businesses, these alternative forms of organizing provide an opportunity to better communicate their commitment to society and to the natural environment in a world where everybody claims to be “green” and “good.””
Protect the mission
When a company becomes a B Corp their ability to protect their mission is locked in from a legal standpoint.
According to bcorporation.net, “the overall value of meeting the legal requirement for B Corp certification is that it bakes sustainability into the DNA of your company as it grows, brings in outside capital, or plans succession, ensuring that your mission can better survive new management, new investors, or even new ownership.”
Defined bcorporation.net benefits of the legal requirement:
- Give legal protection to directors and officers to consider the interests of all stakeholders, not just shareholders, when making decisions
- Create additional rights for shareholders to hold directors and officers accountable to consider these interests
- Limit these expanded rights to shareholders exclusively
It is these types of requirements that allow companies like Patagonia to keep doing what they believe in so that we can all benefit from their founding missions.
For even more reasons to become a Certified B CorporationTM check out additional resources at bcorporation.net.
For more information on why becoming a B Corp was important to us, check out of B Corps Matter page.
Editor Note: References made to businesses/companies in this post are not meant to convey endorsement by Rubicon of those companies in any way.
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