How B Corporations Are Pioneering a New Kind of Business

In 2007 a new chapter emerged in the business world landscape: The first class of certified B Corporations were unveiled.

This illustrated a growing interest for companies making social, ethical, and environmental performance values a critical component of their business model. A change from the classic capitalist mindset that puts shareholder profits first, the organizational structure of the B Corporations proved a truth: Doing good is the way forward. 

Certified B Corporations, also referred to as B Corps, are enterprises that balance profit with purpose. They are verified and certified by B Lab, a US-based non-profit organization that "serves a global movement of people using business as a force for good." B Lab measures how a company's business model and performance impact its non-shareholders. It looks at what effect an enterprise has on its employees, its customers, its local and global community, and the environment. A certified B Corp works to solve the most challenging societal issues of today, from global warming to accessible healthcare, through profit-making business. As B Lab states, "the B Corp community works toward reduced inequality, lower levels of poverty, a healthier environment, stronger communities, and the creation of more high quality jobs with dignity and purpose."

A business looking to become a certified B Corp must undergo the B Impact Assessment, a free and confidential process created by B Lab. The assessment—which is open to any company regardless of its industry or size—considers everything, from the company's business model, to its infrastructure, to its daily operations. Essentially, it takes a holistic look at the way a company operates and the impact it has. In order to gain certification, the enterprise must make any changes necessary to ensure that the best interest of all stakeholders is accounted for to maximize value. Once certified, a B Corp has a fiduciary responsibility to maintain consideration of its impact and to maintain transparency of its practices. 

Since B Corps certification paved a road in the corporate world, more and more companies have considered—or reconsidered—their actions and have become certified. Today there are 3,132 B Corporations in 71 countries spanning 150 industries. Some are larger household names, like Seventh Generation, Ben & Jerry's, and Patagonia. Others are significantly smaller in size and scale, such as East Africa Fruits Company, a production, trading, and distribution enterprise that works to minimize post-harvest losses in Tanzania. Regardless of capacity, the common denominator for all these B Corps is the unifying promise to use business as a means to create a better, healthier, more just world.  

The rising popularity of B Corps (or the “B Corp movement” as it’s been coined) has also presented an opportunity for greater learning. The B Corp certification process taught Ed Stevens, CEO of progressive technology company Preciate, a wealth of information about environmental and community stewardship. This unexpected continued education inspired Stevens and his team to rethink their strategy when they were moving offices. Instead of working with a large corporation, they chose to work with a local real estate company. 

Using business a force for good is not a modern idea. People have been merging profit with purpose for centuries, and experts have been researching and communicating the marriage for years. In the mid-1990s, entrepreneur and sustainability advocate John Elkington coined the term "triple bottom line"— a framework that posits companies should equally commit to people, planet, and profits—and the idea has since grown in popularity. (B Lab nods to the triple bottom line structure in its B Impact Assessment.) 

But what the recent cementation of the B Corp model illustrates is a paradigm shift. It's a reprioritization. The shortsighted idea that money is the sole importance of business is shrinking, while the belief that purpose is the new force is growing. Now it's up to business founders and owners, customers, employees, and investors to make sure that the business world continues to move in this positive direction. 

For further learning on B Corps, as well as information on the certification process, visit: bcorporation. net.

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