The Emerging Economy and one of its Leaders – Certified B Corporations

CERTIFIED B CORPORATIONS - The world economy as we know it and how we account for it is going through a major change. We have seen the collapse of Enron in 2001, followed by the financial crisis in 2008 then of course the ever-growing urgency around our biggest crisis, the future of our planet. The health of our people and planet are related to how we account for what we do, whether we all realize this yet or not. The good news is that there is an emerging economy where profit is not the first and only consideration, where the good of society and the environment are informing business decisions as well.

The economist Pavan Sukhdev, who is the author of a 2010 report to the United Nations called Global Biodiversity Outlook 3, said that unless we put proper value on the goods and services we are provided with for “free” by the natural world and properly account for them in the global economic system we will continue to destroy the planet.

A sobering thought in 2010, but now we are in 2021, in the middle of a pandemic, and we are still trying to figure this out. We can see the impact of the problem reflected in the changes in climate and the ever-growing economic divide between countries, communities and individuals.

There is good news, you’ll be glad to hear, there is an emerging economic model, to rival the current outdated, harmful one and those who are part of it are seeing an increase in demand for it. Here are three examples (among many) of things that are happening in this new economic alternative.

First, there is a move to have an Integrated Reporting framework which is looking to change accounting practices through recognizing we need to include planet and people with profit in the final analysis of a business.

Second, there are new types of investment funds, called ESG (Environment, Social and Governance) funds, which invest money in businesses that are actively engaging in measuring and making a positive impact in these three areas.

And third, there are new business models, where businesses are not just about profit but are also purpose led. One such model, which started in the United States in 2006, is the Certified B Corporation or B Corp for short. B Corps and other purpose led organizations are actively saying they are part of this emerging economy, where businesses are competing to be the best for the world, the people living in it and the natural environment on which all life depends.

The B Corp movement calls this new economy the B Economy. B for benefiting all. This is what I want to look at here, and the Certified B Corporations that are helping drive it.

 Certified B Corporation – What are they?

Put simply, Certified B Corporations, are incorporated, profit making businesses that balance purpose and profit. These businesses must meet the “highest standards of verified social and environmental performance, public transparency and legal accountability” to show they are balancing profit and purpose, doing good for the all stakeholders, in other words not just the shareholders.

The stakeholders are defined as – Employees/workers, customers, community, and the environment. There is one more additional area businesses are measured against and that is governance i.e., how your business is structured and managed – its mission, ethics, accountability and transparency.

As of 2021, there are over 3,800 Certified B Corps in over 70 countries in 150 different industries from products to services.

Have you heard about Certified B Corps or have you noticed their logo? Don’t worry if you haven’t, we live in a “noisy”, cluttered world and there are all kinds of organizations and designations out there for all kinds of things, organic, eco-friendly, cruelty-free, fair trade, FSC (forestry commission sustainably sourced paper), not to mention the plethora of symbols for recycling and on it goes.

Businesses are certainly more aware than ever before that there is this shift happening among consumers wanting to do better for the world by buying products and services from good sources. As such it is getting hard to know what a good source is, and not just green wash marketing, from the consumers point of view.

I have been doing some anecdotal B Corp awareness research, basically asking people in my community if they have heard of them. The result has been mixed, a surprising number of people, even the most eco-conscious, purpose led people have not. As a result of this, and my own quest to do things better for our world, and make it easier, I decided to look more closely at this movement.

What if I ask you if you recognize these four logos and what they have in common?[/vc_column_text][dfd_spacer screen_wide_spacer_size="50" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][vc_row_inner][vc_column_inner width="1/2"][dfd_single_image image="22642" tutorials=""][dfd_spacer screen_wide_spacer_size="15" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][dfd_single_image image="22644" tutorials=""][/vc_column_inner][vc_column_inner width="1/2"][dfd_single_image image="22646" tutorials=""][dfd_spacer screen_wide_spacer_size="15" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][dfd_single_image image="22648" tutorials=""][/vc_column_inner][/vc_row_inner][dfd_spacer screen_wide_spacer_size="50" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][vc_column_text]You guessed it, they are all Certified B Corps and you can look them up and see exactly what impact they are having in all the 4 stakeholder areas and governance. In fact, a full searchable list of Certified B Corps can be found on the B Corp website.[/vc_column_text][dfd_spacer screen_wide_spacer_size="50" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][dfd_heading subtitle="" delimiter_settings="delimiter_style:solid|delimiter_width:80|delimiter_height:1" tutorials="" undefined="" title_font_options="tag:h2" subtitle_font_options="tag:div"]

 Certified B Corporation – How it all started

[/dfd_heading][dfd_spacer screen_wide_spacer_size="50" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][vc_column_text]A little bit about the history of this movement, before I go into a more detailed description of the how to become a Certified B Corp.

The idea to start an organization that would allow businesses to do better, came from Jay Cohen Gilbert in the United States, after a series of events happened in his life, including the sale of his business AND1 to American Sporting Goods in May 2005.

Gilbert announced to his business partner, Bart Houlahan, that he wanted to - start an organization that would allow businesses to apply for a designation that would publicly hold them legally accountable for the ways they benefited workers, communities, customers and the environment. He believed that the current situation of shareholder primacy, where a stock price was the only important benefit at the cost of everything else, was fundamentally flawed. Not only that but a new economy, a B Economy that worked for everyone including the planet was needed and the driver was this new business the, Certified B Corporation. You can read the full interview with Business Insider.

He and Houlahan talked it over in the following months ultimately deciding this would be worth pursuing and brought in Andrew Kassoy, a Wall Street connection, and B Lab was born the next year in 2006.

The idea being that the B Economy is built by everyone “who works for, buys from, invests in, learns or teaches about, or supports businesses striving to create a shared and durable prosperity for all”,B Lab.

 B Lab was set up as a nonprofit organization and has now grown to become a network of nonprofits across the world, whose mission is to transform the global economy to benefit people, community and the planet through the certification of B Corps. With the vision that all businesses should measure and manage their impact as readily as they do their profitability. You may have spotted the link to other changes going on such as Integrated Reporting.[/vc_column_text][dfd_spacer screen_wide_spacer_size="50" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][dfd_heading subtitle="" delimiter_settings="delimiter_style:solid|delimiter_width:80|delimiter_height:1" tutorials="" undefined="" title_font_options="tag:h2" subtitle_font_options="tag:div"]

 How do you become a Certified B Corp?

[/dfd_heading][dfd_spacer screen_wide_spacer_size="50" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][vc_column_text]To become a Certified B Corp a business must be a for-profit incorporated business with at least a year of operations. There is not minimum or maximum size but certain businesses, such as those under a year old, those with related entities, or lager multinational and public companies, have additional considerations and requirements.

All applicant businesses must go through a rigorous certification and verification process to assess and quantify their impact on society and the environment and make changes to their legal structure to safeguard its purpose led position. This process of assessment, verification and certification has been created, developed and is managed by B Lab.[/vc_column_text][dfd_spacer screen_wide_spacer_size="50" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][dfd_heading subtitle="" delimiter_settings="delimiter_style:solid|delimiter_width:80|delimiter_height:1" tutorials="" undefined="" title_font_options="tag:h2" subtitle_font_options="tag:div"]

The informal and formal stages

[/dfd_heading][dfd_spacer screen_wide_spacer_size="50" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][vc_column_text]B Lab’s process and requirements to achieve certification for a business are quite a commitment, they are rigorous and can be very time consuming. As such, I would say that there is a more informal stage a business needs to do before it starts its journey through the formal certification process.

A business can’t achieve certification by delegating it to one person, be it the CEO or any other member of the business. This is a commitment that must be made by everyone, in all parts and at all levels, in a business. After all, it is a heart and mind business model looking to change society and support the planet, transformations of this scale are a “team sport”.[/vc_column_text][dfd_spacer screen_wide_spacer_size="50" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][dfd_heading subtitle="" delimiter_settings="delimiter_style:solid|delimiter_width:80|delimiter_height:1" tutorials="" undefined="" title_font_options="tag:h2" subtitle_font_options="tag:div"]

Informal Stage

[/dfd_heading][dfd_spacer screen_wide_spacer_size="50" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][vc_column_text]I would advise, before a business begins to apply for certification, it goes through thorough internal discussions and investigations into this business model. A business needs to make sure it has the necessary commitment and buy in to make the changes it will need in the journey to becoming a Certified B Corp.[/vc_column_text][dfd_spacer screen_wide_spacer_size="50" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][dfd_heading subtitle="" delimiter_settings="delimiter_style:solid|delimiter_width:80|delimiter_height:1" tutorials="" undefined="" title_font_options="tag:h2" subtitle_font_options="tag:div"]

Formal Stage

[/dfd_heading][dfd_spacer screen_wide_spacer_size="50" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][vc_column_text]Once a business is ready to start the more formal process, B Lab has developed the B Impact Assessment (BIA) and Legal Assessment tools for this purpose. There is also a relatively new tool the SDG Manager enabling organizations of all types to measure their performance towards the achievement of the 17 UN Sustainability Development Goals.

In keeping with this movement all the B Lab tools are free and fully confidential to access, not just for incorporated businesses but for any type of organization and any individual.

Using the BIA and Legal Assessment tools, a business will need to do the following to attain the B Corp certification:

1)   Complete the BIA – with a verified minimum score of 80 out of 200,

2)   Legal requirements – amend their legal governing documents, such as their Memorandum & Articles of Association, to require their board of directors to balance profit and purpose now and in the future, i.e. Consider the impact of their decisions on all their stakeholders

3)   Transparency – make their BIA details public (see Ben & Jerry's below)[/vc_column_text][dfd_spacer screen_wide_spacer_size="50" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][dfd_heading subtitle="" delimiter_settings="delimiter_style:solid|delimiter_width:80|delimiter_height:1" tutorials="" undefined="" title_font_options="tag:h2" subtitle_font_options="tag:div"]

More about the BIA Score & tools

[/dfd_heading][dfd_spacer screen_wide_spacer_size="50" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][vc_column_text]While a business will need to attain a minimum score of 80 out of 200 to become a B Corp, B Lab consider any score greater than zero a good score. This is because you are assessing your positive impact so any score out of 200 means you are doing something right.

These are a great set of tools in their own right, whether you want to become a B Corp or not, and one that over 50,000 businesses are accessing. They enable organizations to assess their positive impact against a rigorous set of standards, compare their results to thousands of other businesses and make improvements, using the customized improvement plan and free best practice guides to help a business implement their plans.

Over the last year or so, the movement has seen a sharp increase of interest in and successful certification of B Corps, in fact, they now say that demand is so high that the review process to finalize the certification and verification process can take up to 10 months.[/vc_column_text][dfd_spacer screen_wide_spacer_size="50" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][dfd_heading subtitle="" delimiter_settings="delimiter_style:solid|delimiter_width:80|delimiter_height:1" tutorials="" undefined="" title_font_options="tag:h2" subtitle_font_options="tag:div"]

Here’s an example of a BIA, Ben & Jerry (I really like ice cream):

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 Why become a Certified B Corporation?

[/dfd_heading][dfd_spacer screen_wide_spacer_size="50" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][vc_column_text]A good question, as we have discussed, it is not for the faint-hearted and probably not one for every business but I like this quote for a simple answer to this question:

Being a B Corp means not just being the best in the world but also the best for the world". Dean Jones Co-founder and CEO, Glam Corner an Australian B Corp that hires/rents out designer clothing

But specially, from a business point of view, it can make very good business sense, distinguishing themselves from the “noise” and leading to -

• Attracting and retaining talented staff,
• Attracting investment – for example from ESG funds
• Attracting clients and customers – a way of standing out in a crowd
• Being part of B Corp community - B Corps I have spoken to say that being part of the B Community is a huge advantage to their business growth and development
• Ultimately, as a result of these factors, being a B Corp can be good for your bottom-line as well

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 B Corp Community

[/dfd_heading][dfd_spacer screen_wide_spacer_size="50" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][vc_column_text]I wanted to specifically say something about the B Corp community as I do think this is a very powerful force for change. From what I have been told by B Corps, and seen myself, this is a strong, positive, supportive and ultimately impactful community in its own right.

I have myself recently witnessed a new B Corp community arise just this year, 2021, here in the UK. I went to and supported the inaugural meeting of Travel by B Corp How to Travel Better, follow the link to their YouTube replay.

Travel is an industry close to my heart and one where it can be very hard to know what “better” looks like and how to find it, let alone how to do it. This newly formed B Corp travel community is there to help answer those questions for themselves and their customers.[/vc_column_text][dfd_spacer screen_wide_spacer_size="50" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][dfd_heading subtitle="" delimiter_settings="delimiter_style:solid|delimiter_width:80|delimiter_height:1" tutorials="" undefined="" title_font_options="tag:h2" subtitle_font_options="tag:div"]

In Summary

[/dfd_heading][dfd_spacer screen_wide_spacer_size="50" screen_normal_resolution="1024" screen_tablet_resolution="800" screen_mobile_resolution="480" tutorials=""][vc_column_text]As an individual, organization or business, the B Corp movement, with its rigorous set of standards, confidential, free set of tools and guidance, provides two things:

1. For the business – Everything it needs to undertake the journey to become a business for profit and purpose, even if it doesn't become a fully Certified B Corp, and
2. For everyone else - when a business puts the logo on their product, beside their brand, we will know that they are doing business that is striving to be good for us all.

At the end of the day, a Certified B Corp is meeting the highest standards of verified social and environmental performance from the supply chain, environmental input/output of materials to employee benefits through to its charitable giving and everything in between.

All of this positive impact is also supported by public transparency, legal structure and accountability requirements to ensure a business is doing good now and has committed to consider stakeholder impact into the future.

Of course, there are other types of models out there but this is an interesting place to start.

Next Steps for Certified B Corporation

Regardless of whether you are a business looking at this or an individual just reading this out of interest, there are several things I would suggest you might do next or think about doing. My top 5 are:

1. Shop from B Corps – one of my starting points now in my quest to buy from “good” businesses. I know there is a rigorous process, verified and supported by evidence, showing that they are really trying to do good and not just green washing.
2.  Work for a B Corp – an attractive prospect as they are making a commitment to better working practices for employees.
3.  B Impact Assessment – as a business, sign up and go through the free assessment process, learn what you are doing right, what you can do better or differently. Use all the tools from their toolkit to support your business’s development. And no need to certify if this isn't for you
4. Learn more about B Corps – investigate the links in this article, do a short course such as - Intro to B Corp – free and virtual, offered by Torrens University (a B Corp) based in Australia, available to all, naturally. I have completed this short course and would definitely recommend it.
5. Be part of the movement – even just by telling a friend about B Corporations.

Finally, don’t wait, start now on one or all of the 5 above, it is as good a time as any other and probably the best time ever to begin the journey toward a more equitable, fairer and sustainable world.

Now that I have finished this piece, I am off to the fridge to enjoy a Small Beer, from a recently certified B Corp (of course), just down the road from us whose beer we have been enjoying pre and post certification!Cheers!