An introduction to B Corporations
Are you familiar with the B Corporation certification? I learnt about the B Corp initiative about 2 years ago, after I’d moved to Canada and started to explore the notion of impact companies and what it meant to be one. I'd seen the little logo --> on a few products, and across various websites I’d surf through, and then the company I was working at, Spring, got its certification at the end of last year and I started to school up further on the notion of what exactly a B Corp is.
The easiest way to explain what B Corporation means as it grows into a widespread global movement is as the business equivalent of what Fairtrade is to food. On the B Corporation website there’s this introductory paragraph which is a great summary:
"Certified B Corporations are a new kind of business that balances purpose and profit. They are legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment. This is a community of leaders, driving a global movement of people using business as a force for good."
The beginning of the B Corporation movement
Back in 2006, three friends left careers in business and private equity and created an organization dedicated to making it easier for mission-driven companies to protect and improve their positive impact over time.
2007 saw the first wave of businesses get their B Corp certification - 19 of them. Since then, the number has grown like crazy, and the current figure sits at 2,606 companies over 150 industries and across 60 countries. Incredible growth! A great article written for the Harvard Business Review 2 years ago identifies that although any company can become a B Corporation, most are privately-held small and medium-sized businesses. Two years has definitely brought change with it - and the number of larger companies joining the movement has grown. In April this year Danone Canada announced it had become the country’s largest consumer-facing Certified B Corporation, an amazing achievement that supports the brand's belief that the health of people and the planet are connected and interdependent. As a global company with many businesses under its umbrella, 30% of them are now covered by the B Corp certification - an impressive figure that highlights Danone’s ambition to become one of the 1st certified multinationals.
So why become certified?
The process can be a lengthy one what will all the data collection, and those that do pass the assessment need to get recertified every 2 years. So what are the benefits of adding the B Corporation logo to a company website? Research examined in the above mentioned Harvard piece points out the following:
---> Identifying as a B Corporation is a way to publicly claim an identity as an organization interested in both shareholder and stakeholder success. Having a clear identity can help firms communicate their values to customers, which is particularly beneficial when they are claiming an identity different from the industry norm.
---> As large established firms have ramped up their corporate social responsibility efforts, small businesses that have long been committed to social and environmental causes want to prove that they are more genuine, authentic advocates of stakeholder benefits. For instance, certifying firms often highlighted how 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 qualitative evidence, gathered from firms’ B corporation application materials, revealed that certifying firms believed “the major crises of our time are a result of the way we conduct business,” and they became a B Corporation to “join the movement of creating a new economy with a new set of rules” and “redefine the way people perceive success in the business world.”
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".
The back end of the B Corporation platform itself, for those that have their certification, has a deep commitment of connecting the companies and individuals to collaborate, share ideas, lessons and ways to all grow business together as one rising tide.
The future of business
For me, one of the main takeaways in acknowledging the rapid rise of B Corporation companies is how business is continually being redefined, and what business success actually looks like. Like everything in the world: ideas; what’s “right”; and ways people operate evolves over time. The recent millennial report from Deloitte that highlights that millennials’ confidence in business and loyalty to employers deteriorates as employees increasingly seek to work for businesses whose decisions will benefit the world. The shift is tangible, especially here in Vancouver, a city with the greenest building code of any jurisdiction in the world, and (as per the recent green report from the Vancouver Economic Commission) a green economy that employs 1 in 15 Vancouverites while 30 percent of businesses deliver products or services that help to restore or preserve the environment.
Examples of larger B Corporations
Ben & Jerry’s
As per the HBR article - “If the public corporation is no longer the default organizational form for businesses, but rather one of many alternatives, how can managers be prepared to ensure long-term competitiveness? How might leaders think about their fundamental organizational structure when they seek to communicate their values in a noisy marketplace of more conventional companies? As the rise of B Corporations among pioneering firms demonstrates, efforts to reform and evolve industry standards increasingly require changes to the fundamental purpose and legal form of an organization.”
What’s the certification process like?
B Corp Certification doesn’t just evaluate a product or service; it assesses the overall positive impact of the company that stands behind it.
Certified B Corporations achieve a minimum verified score on the B Impact Assessment—a rigorous assessment of a company’s impact on its workers, customers, community, and the environment — and make their B Impact Report transparent on bcorporation.net. Certified B Corporations also amend their legal governing documents to require their board of directors to balance profit and purpose.
The combination of third-party validation, public transparency, and legal accountability help Certified B Corps build trust and value. B Corp Certification is administered by the non-profit B Lab.
Many cities have info sessions to go along to to learn more. Find out more here