|
{This is the second in a series about a new breed of business striving to be a force for a better world. Here’s a link to the first blog post.} As described in the first post in this series, there’s a movement afoot that is shifting how we view and measure corporate success. The non-profit B Lab launched a platform to certify the best companies (aka Certified B Corporations or B Corps, for short) and is cultivating a community of these companies, their supporters, and other stakeholders. The “B” stands for “benefit”. Several have touted the B Corp certification as one of the highest and most trustworthy standards for socially responsible businesses. The Certified B Corps are companies that want to improve society—by being better for their customers, workers, communities, and the environment—while making a profit. The founders and owners of these companies are intent on building great businesses that are also a force for societal good. Energizing the pendulum swing away from Milton Freidman’s profit maximization principle, the B Corp movement is leading the charge to shift from ‘greed is good’ to “doing good is good.” So, who and where are these B Corporations? Who Is Eligible to Be a B Corp? Any type of for-profit company is eligible to become a B Lab Certified B Corp. There are no legal structure (e.g., S corp, C corp, LLC), size, or industry parameters or requirements. If a company is for profit, it is eligible to earn the certification. That said, most B Corps are privately held small or medium sized businesses. Even start-ups (i.e., companies in operations for less than 12 months) can earn a temporary “Certification Pending” designation (steps here). This special designation is good for a 12-month period (versus the normal certification which is 24 months). Since the B Impact Assessment (“BIA” for short) measures policies, practices, and performance from the previous year, start-ups aren’t able to earn the full certification. While multi-national and publicly traded companies are eligible for the certification (see e.g., Etsy, Laureate, KeHE, Natura, Silver Chef), some have faced institutional and practical barriers to qualify. Currently, the process is most suitable to parent multi-national and publicly traded companies of limited size, scope, and complexity. B Lab identifies the following characteristics as most likely to allow a parent multi-national and publicly traded to qualify for the certification:
Several large companies have also achieved B Corp certification for a subsidiary (e.g., Ben & Jerry’s/Unilever, Plum Organics/Campbell’s Soup, Happy Family/Danone, New Chapter/Procter & Gamble). To address the existing barriers, B Lab has created an advisory council (the “Multinationals and Public Markets,” MPM Advisory Council) to enable the B Corp movement to scale and diversify beyond the current small and mid-sized company core. Apart for seeking certification, multi-national and publicly traded companies actively engage in a number of ways to boost the positive impact business can have on society. Who are the B Corps? The B Corp movement is growing exponentially. As of late September 2017, B Labs reported about 2,200 Certified B Corps. In its first year (2007), B Lab certified more than 30 companies as B Corporations. After a small dip during the recession years, the number of B Corps is growing fast. So far, 2016 has the biggest class of first time certifiers with nearly 600. Through early September 2017, B Lab has completed the certification process for about 250 new B Corps.  B Corps | By Initial Year Certification via Data World (dataworld/blab) The companies in the B Corp movement come from every conceivable line of business, including manufacturers, retailers, wholesalers, construction companies, and service businesses, The following representative list of Oregon companies earning the B Corp certification for the first time in 2017 helps to illustrate the range of companies in the movement.  Illustrative List of Oregon B Corps Certified for First Time in 2017 The largest segment of B Corps is the professional services companies (e.g., accounting, architecture, consultants, law firms, health care) (about 33%). Wholesale and retail businesses make up another significant swath (about 26%) of the B Corps, And, about 10% of B Corps are in the information and communication technology sector.  The B Corp Movement is Springing Up Across All Industries The B Corps represent companies of all sizes—from zero employee sole proprietor LLC’s to 10,000+ employee international corporations. Included in the B Corps ranks are many brand-name companies you’ve heard of---Patagonia, Method, Seventh Generation, Cabot Creamery; and thousands of other companies you haven’t heard of (yet). Beyond the 2,200 or so Certified B Corps, about 15,000 companies have taken the BIA to assess, compare, and improve their environmental and social performance. Some companies take it upon themselves to engage with the BIA. Other companies are invited to take the BIA by their supply chain or other business partners. As a reminder, to qualify for the B Corp certification, a company must score at least 80 points (of a possible 200) on the BIA. According to researchers, there’s about a 7.5 percent passing rate (i.e., companies that take the BIA and later become Certified B Corps).
The vast majority of Certified B Corps are U.S. businesses. Most states have at least one B Corp incorporated (or having their primary operating location) in the state. A handful of states still don’t have a Certified B Corp (i.e., Delaware, Mississippi, North Dakota, West Virginia). While B Corps are spread across the country, some states are B Corp magnets. The 5 states with the most B Corps are: California, New York, Oregon, Colorado, and Pennsylvania. On a per capita basis, there’s a change to the states with the most (relative) B Corps: Vermont, Oregon, Washington DC, Colorado, and Massachusetts.  Certified B Corps | Top 10 States Whether on the raw numbers or on a per capita basis, the State of Oregon is home to a sizable chunk of the world’s B Corps (ranked #3 and #2 of US States, respectively). More than 70 (of the 90+) Oregon B Corps call the Portland metro area their home operating base. Later in this blog series, we’ll go into more detail about why Oregon is such fertile ground for B Corps. The Best of the Best! Each year, B Lab honors the best of the B Corps through its annual “Best for the World” list. These are the companies that score the best on the BIA. B Lab recognizes the “overall” best (i.e., those scoring in the top 10 percent of all B Corporations), along with the best scoring in six other categories (e.g., Best for Customers, Best for the Environment, Best for Community, Best for Workers). Earlier this month, B Lab announced the 2017 list of Best for the World honorees—846 leading companies across more than 50 industries from nearly 50 countries. Stay tuned to this series for more on the B Corp movement wherefore and why’s:
#### Nota bene: Companies get newly certified almost every week (and some don’t re-certify). This leads to some fluidity in the numbers. All B Corp data for this article was pulled from B Lab’s website and Data World on September 25, 2017. ####
Thank you for reading this blog post. Here at Corporate Sustainability Advisors LLC blog and on LinkedIn and Medium, I regularly write about organizational, community, and personal sustainability. If you would like to read my future posts then please subscribe via the adjacent link. Also, feel free to connect via Twitter and Facebook.
0 Comments
|
AuthorHi. I'm Colleen, Corporate Sustainability Advisor's founder and owner. Blogging about corporate sustainability trends, benefits, and best practices. Archives
January 2018
Categories
All
|
RSS Feed