This month the spotlight is on companies for which sustainability is not just a program but a way of doing business. So much so, that they are incorporated as a B-Corp or are certified as a B-Corp. B Lab is the 501(c)3 nonprofit which is behind the B-Corp initiative. As a result of B Lab’s work, laws have been passed in 20 states (and are moving forward in 11 more) creating a new type of corporation—the Benefit Corporation (B-Corp). B Corps are required to (1) Have a corporate purpose to create a material positive impact on society and the environment; (2) Expand fiduciary duty and accountability to require consideration of the interests of workers, community and the environment; and 3) Publicly report annually on overall social and environmental performance against a comprehensive, credible, independent, and transparent third party standard. What this means is that companies can make decisions based on environmental and social considerations instead of just financial ones. For example, a B Corp can turn down a high bid in favor of a buyer more committed to responsible behavior without worry of lawsuits. Meaning, if Ben & Jerry’s had been incorporated as a B-Corp, then in 1999, the founders would have been able to turn down Unilever’s offer as they professedly wanted to. Reportedly, a major motivator for Patagonia’s founder to switch its incorporation to a B-Corp was to have the ability to protect the company’s core values during succession. Currently, there are over 700 B-Corporations in 27 countries. This includes companies that are Certified B Corp and/or are B Corp. Certified B Corporation is a certification conferred by the nonprofit B-Lab after an assessment, much like other certifications such as the Forest Stewardship Council etc., whereas Benefit Corporation is a legal status administered by the state. Benefit corporations do not HAVE to be certified but a certification does provide a strong objective affirmation to potential customers and investors.
B-Corp’s Best For the World 2013 is an annual list that honors companies scoring in the top 10% of all B Corps for overall social and environmental impact. The list has three categories of companies: micro (0-9 employees), small (10-49 employees) and mid-size (50+ employees) and for each of these categories the top companies are listed for overall performance, and also separately for Environmental, Worker and Community achievements. Some well known companies on the Best for the World 2013 list are Patagonia, Method, Sungevity, Seventh Generation and King Arthur Flour. These are also companies whose business practices are inspiring and have led to changes in the marketplace. For example, the increasing popularity of Seventh Generation and Method home cleaning products, which are better for health and the environment, has influenced big companies like P&G and Unilever to introduce similar products of their own.
Why would a company want to become a B-Corp? As mentioned before, if it is important to protect the company’s core values from an incompatible buyer or from the pressures of quarterly analyst meetings. Or, if you truly believe that profit is the not the only measure of success and predictor of future prosperity because it is equally important to measure the impact on employees, community and environment. Becoming a B-Corp is also a powerful affirmation from a credible third party about your commitment to the triple bottomline. And a company that is a B-Corp is part of something bigger than itself that has epic meaning which can be an effective tool for attracting and retaining talent! According to Harvard Business Review, Millennials, which represent roughly 50% of the global workforce, want work that connects to a larger purpose.
The first step in becoming a Certified B Corporation is taking the B Impact Assessment. For a variety of reasons not all companies can turn themselves into a B-Corp. But like over 7,000 other companies, a business can use the “B Impact Assessment” to benchmark their performance and set goals for continuous improvement. If sustainability is not yet a consideration at your company, start a conversation at work with your peers and with senior management about having a positive impact on your company’s community, employees and environment. Cite examples of other B-Corp companies, small and large, to inspire your co-workers and overcome objections.
SOURCE for numbers and facts: www.bcorporation.net
Green Guru: Suparna Vashisht, September 2013