B Corporations are for-profit corporations that have been certified by B Lab, another non-profit company that measures a company’s social and environmental performance against the standards in the B Impact Assessment. A certified B Corporation shows its ability to manifest high standards in regards to social and environmental performances, such as reducing inequality, mitigating poverty, conserving the environment, and creating high quality jobs with dignity.
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B Lab’s long term goal is to build “a global community of Certified B Corporations who meet that highest standard of verified, overall social and environmental performance, public transparency and legal accountability.” By reversing the definition of a successful business, B Corporations become purpose-driven businesses, which aim to reverse climate change.
According to B Lab, the five conditions that define a Certified B Corporation are:
- Accountability:
Directors are mandated to consider the company’s impact on all shareholders
- Transparency:
Certified B Corporations are required to publish a report of their social and environmental performance, as this report is assessed by a neutral party
- Performance:
The corporations must maintain a minimum score on the B impact Assessment text every two years. The BIA assesses both the company’s day- to- day operations and the business model. B-corp certification requires a minimum score of 80 across all impact areas
- Availability:
Any business can become a Certified B Corporation regardless of business type and location
- Cost:
Certification fees vary according to the revenues. These costs are outlined below:
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Table from: https://bcorporation.net/certification
Through the certification issued by B Lab, the B-Corp ensures that new companies are purpose-driven and that growing companies scale with integrity. B Corp companies “use profits and growth as a means to a greater end: positive impact for their employees, communities and the environment,” as stated in the Certified B Corporation website.
The community of certified B Corps is constantly growing as there are currently over 3 000 issued B corp certification across 150 industries in 71 countries.
Why Would a Company Pursue a B Corporation Certification?
Research shows that millennials, representing roughly about 50% of the global workforce, seek work that connects them to a larger purpose. Thus, companies that have fulfilled the assessment requirements of B Lab are highly alluring to them since it practices high standards of social and environmental performances, public transparency, legal accountability to balance the profit and purpose, and “comprehensively covers the impact of a business on all of its stakeholders including its workers, suppliers, community and the environment,”
In February, several North American Certified B Corporations formed the B Corp Climate Action Collective, a group invested in fighting the climate crisis. The group wrote, “We demonstrate the collective power of our businesses to transform commerce and to create an inclusive society and environmental regeneration.” The Climate Action Collective added, “We commit to taking bold steps toward climate resiliency by using advocacy, cross- sector collaboration, corporate action, and the capital markets to stop emissions and drawdown carbon, improving global well being.”
It is imperative that all companies strive to achieve B Corporation status; doing so shows their willingness to protect the environment and those that are affected by it, which in the future, will be a major part of a company’s profitability.
Examples of B-Corporations
- Brew Dr. has made a name for themselves as being the first national kombucha company to become a Certified B Corporation with a focus on sustainability. In their words, “As we continue to grow and scale our business, remaining a champion of our earth, land, and people will be at the core of what we do.”
- Patagonia also epitomises what it means to be purpose-driven. They too are transparent about being environmentally conscious as their mission is to “build the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis.” They emphasise storytelling in their marketing efforts by spotlighting the environmental causes they care about.
