B CORPS MEAN BETTER BUSINESS
A B Corp (short for Benefit Corporation) is a for-profit company that aims to meet high standards of social and environmental performance, accountability, and transparency. Unlike traditional businesses that prioritise maximising shareholder profits, B Corps focus on using their business as a force for good. They seek to balance profit with purpose by considering the impact of their decisions on employees, communities, customers, and the environment.
The certification is provided by B Lab, a nonprofit organisation that evaluates companies based on a rigorous set of standards. B Corp Certification is to sustainable business what Fair Trade is to coffee or USDA Organic is to food. This certification signifies that a company goes beyond regulatory compliance and actively works to create positive social and environmental change.
Key Features of B Corps
- Triple Bottom Line:
B Corps adhere to the concept of the **Triple Bottom Line** — balancing profit with people and the planet. They measure their success not only by financial metrics but also by their social and environmental impact.
- Rigorous Certification Process:
To become a B Corp, companies must go through a thorough assessment. This process—known as the B Impact Assessment—evaluates a company’s operations and its impact on workers, customers, the environment, and communities. Companies must score at least 80 out of 200 points to qualify.
- Legal Accountability:
In addition to the certification, B Corps often make legal changes to their corporate structure. This ensures that their mission and social/environmental goals are baked into the DNA of the business and cannot be overridden by a desire for short-term profits.
- Transparency and Reassessment:
B Corps are required to publicly share their B Impact Report and undergo recertification every three years. This process ensures that they remain accountable and continue to strive for improvements.
How B Corps Are Different from Traditional Corporations
Traditional corporations are legally obligated to prioritise shareholders’ interests, often focusing on short-term profits. While some traditional companies also engage in corporate social responsibility (CSR) efforts, these initiatives are often voluntary and not as deeply integrated into the core of the business as they are in a B Corp. B Corps must commit to making decisions that positively impact all stakeholders — not just shareholders.
B Corps and Benefit Corporations
It’s important to differentiate between B Corp Certification and a Benefit Corporation. While both share a similar philosophy, they are not the same.
B Corp Certification: This is a third-party certification provided by B Lab. Any for-profit company can apply for it, regardless of its legal structure, industry, or location.
Benefit Corporation: This is a legal structure available in certain states and countries that allows companies to include social and environmental goals in their bylaws. While many Benefit Corporations seek B Corp Certification, the two are not synonymous. A company can legally be a Benefit Corporation without being certified by B Lab, though many certified B Corps also adopt the Benefit Corporation legal status.
Examples of Prominent B Corps
Many well-known companies have embraced the B Corp model, illustrating that profitability and purpose can coexist. A few notable examples include:
Patagonia: Known for its commitment to environmental sustainability, Patagonia donates 1% of its sales to environmental causes and has a mission to “save our home planet.”
The Jamie Oliver Group: A commercial business with social purpose. The group is divided into three commercial functions: media; franchised restaurants; branded product ranges. They strive to bring people together through the joy of food, and campaign to improve food environments to help them achieve their goal of halving UK child obesity by 2030.
Ben & Jerry’s: The iconic ice cream brand has long championed social justice issues, from climate change to racial inequality, and it has been a B Corp since 2012.
Guardian Media Group (GMG): A leading media organisation which publishes the Guardian and the Observer newspapers and the theguardian.com website. GMG is owned by the Scott Trust in a unique structure that exists to secure the financial and editorial independence of The Guardian in perpetuity and to safeguard the journalistic freedom and progressive values of The Guardian, free from commercial or political interference.
Innocent Drinks: Their purpose is ‘to make natural, delicious food and drink that helps people and the planet live well and die old’. The company is committed to being carbon neutral by 2030 (or before) and pledges to give 10% of profits to charity each year.
Eileen Fisher: This women’s clothing company is recognised for its environmentally friendly practices, including using organic and recycled fabrics and promoting fair labour standards.
Danone North America: A leading food company, Danone became the world’s largest B Corp in 2018, aiming to integrate health and sustainability into their business model.
Why Become a B Corp?
There are numerous benefits to becoming a B Corp:
- Credibility and Trust:
Certification builds trust with consumers, investors, and employees. Consumers today are more socially conscious and prefer to support companies that align with their values. Being a certified B Corp signals that a company is genuinely committed to making a positive impact.
- Attracting Talent:
Many employees, especially younger generations, prefer working for companies that reflect their personal values. B Corps tend to attract mission-driven people who are motivated by more than just a salary.
- Resilience and Long-Term Value:
B Corps often have a longer-term vision for business success. By prioritising sustainability and social impact, they create more resilient business models that are better equipped to handle challenges like economic downturns, resource shortages, and changing regulatory environments.
- Community and Collaboration:
Becoming a B Corp connects a business to a global community of like-minded organisations. B Corps often collaborate on initiatives that amplify their impact and share best practices within the B Corp network.
- Investor Appeal:
Impact investing is on the rise, and many investors are increasingly looking for companies that prioritise social and environmental impact alongside profit. B Corps can attract this type of investment.
Challenges of Becoming and Staying a B Corp
While there are many benefits to becoming a B Corp, the process can be challenging. The certification process is rigorous and time-consuming. Companies need to carefully evaluate and document their practices across various areas, which can be particularly difficult for smaller businesses with fewer resources. Additionally, maintaining certification requires ongoing effort and commitment, as companies must recertify every three years and demonstrate continuous improvement.
The Future of B Corps
The B Corp movement continues to grow, reflecting the increasing importance of socially and environmentally responsible businesses. As consumers and investors demand more transparency and accountability from companies, the B Corp model is likely to gain even more traction.
Moreover, as governments around the world push for more sustainable and equitable economic systems, B Corps could become a blueprint for how businesses should operate in the future. By proving that it is possible to build profitable, socially responsible companies, B Corps are leading the way in the transition to a more just and sustainable economy.
Summary
B Corps represent a new kind of business that balances purpose and profit, serving as a model for companies committed to solving social and environmental problems. Through a rigorous certification process, these companies demonstrate their dedication to improving the world while still generating financial returns. As the demand for responsible business practices grows, B Corps are well-positioned to thrive in a future where consumers, employees, and investors increasingly prioritise purpose over pure profit.