A traditional view of corporations is that they exist to leverage scale to maximize benefit to shareholders--the bigger it gets, the more efficiently it performs, the more profit can be captured. In this model, the primary responsibility of the corporation is to its shareholders, with additional considerations, such as employees, communities, the environment, and others, taking a back seat. This pursuit of scale and profit has produced a world where Amazon trucks are as common as dandelions, where large tech companies have tremendous power to shape public discourse, and where global corporations rival national governments in terms of influence over our daily lives.
As corporations have grown in size and scope, attitudes about their roles and responsibilities have shifted away from the traditional, more narrow focus on profit and toward a more holistic set of expectations. Consumers are increasingly interested in the priorities and practices of the brands they support and are becoming more likely to do business with corporations they view as good actors. More employees want to know the hard work they do each and every day is in service of a company that shares their values and is making a positive impact on the world we all share, recently affirmed in this Fast Company article.
Corporate leaders have taken notice, and boardrooms around the world are now the setting for debates on how to measure and report environmental impact, social impact, and inclusive governance. A quick search of “ESG” or “corporate responsibility” will return pages of reports, initiatives, and declarations about how corporations can increase value beyond simply increasing profits. Presented with these factors, the conclusion is clear--corporations have a significant impact on society and their behaviors matter a great deal. What, then, is the role of corporations? To whom are they accountable? What are their responsibilities? Enter B Corporations.
What is a B Corporation?
Certified B Corporations are businesses that have chosen to hold themselves to the highest standards of social and environmental performance, transparency, and legal accountability. The world faces immense challenges--inequality, poverty, unemployment, pollution, climate change, and more. The B Corp community acknowledges that these challenges cannot be solved by governments and nonprofits alone--businesses must be actively engaged in finding solutions that benefit all stakeholders, not just shareholders.
Achieving a B Corp certification is about creating global change in the way companies function to produce an inclusive and sustainable economy. The B Corp Declaration of Interdependence reads, “As B Corporations and leaders of this emerging economy, we believe:
- That we must be the change we seek in the world.
- That all business ought to be conducted as if people and place mattered.
- That, through their products, practices, and profits, businesses should aspire to do no harm and benefit all.
- To do so requires that we act with the understanding that we are each dependent upon another and thus responsible for each other and future generations.”
There are over 3,800 Certified B Corps in 75 countries, representing 150 industries--and the number is growing. Over 50,000 businesses have initiated the B Impact Assessment, a tool that any company can use for free to see how their practices rank according to the certification requirements.
Certification Process & Requirements
The certification process begins with the B Impact Assessment, a questionnaire that the company will complete to better understand its current impact, how other businesses are performing, and strategies for improvement. The assessment uses a point system--a minimum score of 80 points out of 200 possible points is required to become certified. The questionnaire explores a wide range of categories and topics including:
- Mission Statement: social and environmental impacts and commitments
- Governance: structure, diversity, ethics policies, revenue and income
- Workers: full-time and part-time, salaries, contacted labor, lowest wage, bonuses, training and career development
- Engagement: employee handbook, employee satisfaction, paid days off
- Economic Impact: job growth rate, local ownership, charitable donations
- Environment: supply chain, resource use and conservation, energy use
- Disclosures: sale of data, labor, financial status, use of animal products, fossil fuel use
In addition to the questionnaire, there are three legal requirements for any company seeking certification. The company must:
- Give legal protection to directors and officers to consider interests of all stakeholders
- Create additional rights for shareholders to hold directors and officers accountable
- Limit those additional rights to shareholders
Once the questionnaire is completed and the legal requirements are met, the company seeking certification will meet with a B Lab Standards Analyst to review the assessment. If any additional documentation is needed, the company will be responsible for assembling it and uploading to B Lab, the organization that manages the certification process. Companies seeking certification are subject to background checks as well as site reviews for re-certification, and all companies must recertify within 3 years.
Big and Small – B Corp Works
Recognizing we must lead by example, Emerald Built Environments recently applied for B Corporation Certification. Each day, we help businesses set and achieve their sustainability goals, and we believe deeply in the opportunity for change. By seeking third-party verification of how we operate our company, we benefit from the rigor of following a rating system and measuring performance to prove we do what we say we do. Pursuing B Corp Certification engages each of our core values:
- Constantly Raising the Bar
- Winning- Eye of the Tiger
- Cultivate the Team
- Owning Our Outcomes
- Environmental Sustainability
B Corp Certification is achieved by large multi-national and small companies alike. Emerald is small--six full-time and three part-time employees. As a small company, some of the criteria are not within our reach yet, but we accumulated enough points to pass the 80-point threshold. We are proud of our application to join the B Corp Community and are eager to continue working to ensure our impact on the world is a positive one.
Employees are demanding holistic, value-driven approaches to business from their employers. Customers are increasingly likely to support companies that commit themselves to work beyond the traditional bottom line. The B Corp framework can help you and your company align with the values that matter both internally and with your stakeholders. As Ghandi said, “Be the change you wish to see in the world." B Corp Certification helps.