Throughout history, man has created several economic and societal systems by which their respective peoples abide. From communism, feudalism, Marxism, egalitarianism, capitalism and more. Many of these systems tend to operate under the principle of profits over people and benefit the least amount of people. The principles of these systems are often seen in businesses, where a product is created that maximise profits for those in higher-up positions, but those at the bottom of the ladder reap few benefits. In far too many cases, this business model has led to problems such as climate consequences, deforestation, pollution, inequality and more. But it doesn’t have to be this way. Recently, you may have noticed companies advertising that they are certified b-corp. But what exactly does that mean?
What does being a b-corp business mean?
B-Corp is a certification that businesses can obtain from an independent body, B-lab. This certification shows that the business has been verified to operate to high standards of social and environmental performance, transparency, and accountability. Many businesses are choosing to become b-corps as they realise that we can’t rely on the government to tackle environmental and societal issues. Certified b-corps commit to positively impacting customers, stakeholders, employees, and the environment from within. To put it very simply, b-corps do not operate solely and purely for profit. Of course, profit is still in the picture as that is what businesses strive for, but b-corps operate with the greater good in mind.
The B-Corp movement is a fast-growing one and is not restricted to a certain industry. Some of the bigger names you may recognise are Ben & Jerry’s, Patagonia, Etsy, Alpro, Waitrose, and The Body Shop. You may be wondering, what are the benefits of becoming a certified B-corp? Research has shown that b-corps outperform their competitors on several metrics, such as higher expectations about future growth, faster turnover and employee headcount, greater levels of employee retention, more innovation, and others.
Who can become a B-Corp and how?
Any for-profit business that is at least 12 months old can become a fully certified business. This is because B Impact Assessment requires data from the last 12 months. If your business is younger than this, you can earn a b-corp pending status. There are three steps to the full certification process:
- Complete the B Impact Assessment and receive a score of at least 80 out of 200
- Make sure you meet the legal requirements – and work out how to meet them if you don’t currently.
- Sign the B-Corp declaration of interdependence and terms sheet to confirm your status.
PROS:
- Effective Marketing Tool - Build credibility by showing your commitment to sustainability. You can back up your claims with real evidence.
- Built-in requirements - B-Lab has built-in mechanisms to help you manage your accountability and make sure you pass the random audits.
- Shared Resources - There are numerous networking opportunities and a host of resources available for you to use to improve your business.
- Capital Attraction from global investors - Having these kinds of certifications can attract interest from global investors, particularly as more companies are making the switch to sustainability.
- Good workforce - Happier employees often means more productivity and loyalty to the company.
- Numerous ways to be involved - Supporters of your organization’s mission may make contributions that are tax-deductible. Some B Corps may charge annual fees, collect fundraising, and other non-profit activities that may appeal to investors.
CONS:
- Annual admin fees to maintain the status - To uphold the certification, fees will be incurred annually.
- No legal status but held accountable to third party judges - The B-Corp movement follows a legal framework to improve accountability however, it is not a government mandate and your certification will be subject to relative opinion from the judges.
- It’s as good as you make it. Get out what you put in. - If you fail an audit you risk losing your credibility and all of the networks you've built. Make use of the resources to really get the most out of being a B-Corp.
Interested in becoming a B-Corp? You can find out more on their website.