Business in the Balance: Building a More Sustainable Future
Photo: Canva
Today’s global landscape is changing before our very eyes. Tackling consequential questions on climate change, human rights, poverty, and other contemporary challenges has become the central mission of various initiatives throughout the world. Nowhere do these efforts intersect more closely than in the world of business, where a historically hallowed devotion to shareholder primacy—that is, maximizing profit for owners, come hell or high water—exposes and only exacerbates the world’s most pressing issues. It’s time to recognize that people matter, and the well-being of the planet matters. These two stakeholder groups can no longer be an afterthought in corporate decision-making.
Today, consumers want to support companies that align with their values—companies that sow into their local communities and generate positive social and environmental impact through their operations. With shareholder primacy now considered by many as an untenable business model, a different approach has emerged in its place: the decision to use business as a force for good. It’s for this reason that Certified B Corporations are considered a trailblazing alternative to shareholder primacy. These companies run a different playbook, one that puts people and the planet on an equal playing field with profit. This playbook is sometimes known as stakeholder capitalism.
An existential question many companies are facing is how to build a sustainable and prosperous future for themselves. It starts with ensuring that there even is a future at all. We have only one planet, whose current inhabitants have the tools, knowledge, and urgency to preserve it for the coming generations. Part of this equation will involve shifting our mindset and framework for how we do business. Certified B Corporations exemplify a sustainable and prosperous future by embarking on a journey to continuously improve their social and environmental performance for economic inclusion and equity. Aligning with the pillars that define a Certified B Corporation could be part of what assures the future of business prosperity.
What Exactly is a B Corp? And What’s the Other B Corp?
You’ll often hear the term “B Corp” as a loose reference to both a Benefit Corporation (or a Public Benefit Corporation) and a Certified B Corporation. While the “B” in both instances stands for “Benefit” (to simplify matters), these two B Corps are not the same. The first “B Corp,” a Benefit Corporation, is a legal structure available in most US states and Canadian provinces. Think of it as one of the incorporating options available to you, along with the Limited Liability Company (LLC) and the C Corporation, among other forms.
The other “B Corp” is a Certified B Corporation. This B Corp is not a legal status; rather, it’s a for-profit entity that adheres to a few key pillars:
• A legal structure or governing mandate that calcifies the company’s mission to include generating a positive impact on society and the environment (which for some companies could mean converting to a Benefit Corporation).
• Completion of the B Impact Assessment, a digital tool that enables companies to measure their positive social and environmental impact.
• Verification of a minimum level of performance in the B Impact Assessment via an in-depth audit conducted in accordance with the standards set by B Lab Global, the body responsible for implementing and safeguarding the integrity and rigor of the pillars of B Certification.
• Commitment to transparency of the company’s performance on its public profile in the B Directory, a hub where you can view and search for all current Certified B Corporations.
So, being a B Corp, or a Public Benefit Corporation, doesn’t automatically make you a B Corp, or a Certified B Corporation. Electing B Corp as a legal status, however, could be part of what is required for your company to effectively become a B Corp.
But then, how do companies meet the required level of performance to become Certified B Corporations? Companies must reach and maintain a score of 80 points in the B Impact Assessment by measuring their positive impact across five impact areas:
• Governance: Policies and practices pertaining to the company’s mission, ethics, accountability, and transparency.
• Workers: Contributions to the financial, physical, professional, and social well-being of the company’s team members.
• Community: Sowing into the local areas where the company operates.
• Environment: Tracking and remediating the effects of a harmful footprint.
• Customers: Created value for the consumers of the company’s products or services.
This process really gets under the hood of what companies are doing, which is why it’s so relevant for a sustainable future. It fosters a deep dive into how we can better align ourselves with the shifting needs of the 21st century.
The B Factor of Attraction
With now over 9,000 Certified B Corporations in the world, what’s certain is that we’re not going back. We can no longer afford business as usual. Certified B Corporations are increasingly winning the favor of many stakeholder groups. But don’t take my word for it; let the numbers speak for themselves. According to data analyses conducted by B Lab Global, in comparison to non-certified companies:
• Certified B Corporations are 1.1 times more likely to pay 100% of their employees a family living wage.
• Certified B Corporations are 1.8 times more likely to have a 5:1 high-to-low pay ratio.
• Certified B Corporations are 2.4 times more likely to donate more than 1% of top-line revenue to charity.
• Certified B Corporations are 4.5 times more likely to use 100% renewable energy.
• Certified B Corporations are 4.2 times more likely to have supplier diversity policies or programs that give preference to suppliers with ownership from underrecognized populations.
The Certified B Corporation intellectual property (that “B” you see on many a product pack) has also proven to be a differentiating factor. B Lab U.S. & Canada further reports that 85% of US consumers aware of B Certification say that it directly impacts their purchasing decisions.
What began as a single spark in 2007 has since ignited a brilliant fire of creativity and sustainable development. Yet, in terms of general awareness, Certified B Corporations have flown somewhat under the radar. As entities and individuals that are for-profit, it’s important to maintain good financial health to remain viable. After all, financial viability is what allows us to generate positive social and environmental impact in the world. Whether we have our own companies or seek more fulfilling employment, adopting a triple-bottom-line approach to doing business (people, planet, and profit) could be part of how we future-proof our careers and the world itself.
