B Corps: Businesses Doing Good

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Workers at B Lab and Kregel & Co., a B Corporation in Pennsylvania, partnered with the nonprofit MANNA to bring free meals to people battling life-threatening illnesses. Such community outreach aligns with the B Corp principles.
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A people-centered approach is at the heart of the B Corp core principles.

Since the Industrial Revolution, business has been characterized by the single-minded pursuit of one goal: profit. Economic fundamentalists, such as Milton Friedman, considered a manager’s focus on any other priority heretical. But an increasing number of customers and businesspeople are now demanding more from companies. They want businesses to do good in the world, as well as for shareholders’ pocketbooks. Companies such as Ben & Jerry’s, Etsy, Method, Patagonia, and Seventh Generation have made their social and environmental missions a visible part of their public identities and their marketing messages. Of course, over the years, a lot of companies have claimed to do good in the world without anyone checking their claims. Until recently.

Enter the B Corporation, or “B Corp.” All the companies named above, plus Dansko shoes, King Arthur Flour, New Belgium Brewing Co., Numi Tea and more than a thousand others, are certified B Corps. Ogden Publications, owner of MOTHER EARTH NEWS, is a B Corp, too.

To become a B Corp, companies must pass a rigorous certification process managed by an independent nonprofit, called B Lab. The process examines how a company treats its employees, how transparent its practices are for customers, how its decisions and practices affect the environment, and how actively the company works to improve the communities in which it operates. Sample questions from the assessment are published on the B Corps website, as are a complete listing of B Corporations and the score each business has earned. Questions cover a wide range of concerns, from “Has the company worked to develop social and environmental standards for its industry?” to “What percent of energy used is from renewable on-site energy production?” and “Based on the results of your employee satisfaction assessment (conducted within the past two fiscal years), what percent of your employees are ‘satisfied’ or ‘engaged’?”

“We wanted to create a way for conscientious businesses to assess themselves, as well as a way for them to communicate their actual impact with credibility,” says B Lab co-founder Jay Coen Gilbert. “We knew our system would need to be both rigorous and transparent.”

In addition to recruiting more than 1,100 B Corps in 35 countries since B Lab started in 2006, the organization has been active in passing “benefit corporation” legislation in 27 states, with more on the horizon.

A legal designation as a benefit corporation allows companies to incorporate mission objectives into their business strategies. In a conventional business, managers and directors could be sued by shareholders if they make a decision for reasons other than shareholder earnings. If, for instance, a CEO and a board of directors refuse to sell their company to the highest bidder and favor a lower bid from a buyer better aligned with their values, they could be sued by shareholders and forced to sell for the highest possible price. The directors of a benefit corporation, on the other hand, would be able to wait for a buyer that would maintain their company’s values. In fact, they would be under a mandate to do just that.

The legislation that designates benefit corporations lets founders set customized objectives for their companies, such as those related to environmental causes, social improvement, community development and employee advancement. Benefit corporations must adhere to those objectives so long as the bylaws survive — a revolutionary opportunity for publicly traded companies whose shareholder rosters change frequently.

When you invest in a B Corp, you’re investing in the company’s values as much as in its balance sheet. “We want to empower businesses to change the world,” Gilbert says. “And, because of the leadership of B Corporations, we think the world is changing for the better.”

Bryan Welchis the Publisher and Editorial Director of Ogden Publications, the parent company of MOTHER EARTH NEWS. Connect with him on.