What is a B Corp, and why would I be interested in one?
What are Benefit Corporations and “B Corps”? By Connie Allsopp, PhD
In short, a B Corp is a for-profit corporation that receives a certification from a private company called B Lab. B Lab makes companies meet particular “social benefit” requirements in order to get certified, similar to certificated organic coffee beans that support the ethical values of Fair Trade. The B Corp is taxed similar to a regular corporation, unlike a charity or not-for-profit explained later. “B Lab” it self is actually a not-for-profit organization based in Washington DC whose purpose is to certify ‘Businesses’ as triple bottom line organizations. B Corps must go through a rigorous Certification process and must be re-certified every two years. B Corps include such global companies as Patagonia, Ben and Jerry’s Ice Cream and in Canada, BDC and Tartan Communications.
The two specific examples explained later here on the west coast of Canada are SES consulting, which is a values based, mission driven company from Vancouver and Victoria, BC and Enrollment Resources based in Victoria, BC that is being honoured with three Global B Corp Best for the World Honours. Enrollment Resources is receiving the Changemakers, Best for Workers and Governance Awards. The Interview was conducted by Connie in early April 2018 with Gregg Meiklejohn, founder.
NOTE: Social Benefit Corporations and B-Corps, specifically consider a triple bottom line- People, Planet and Profits. Below you will also see several You Tube videos to help clarify.
Further, B Lab is a nonprofit organization that serves a global movement of people using business as a force for good. Its vision is that one day all companies compete not only to be the best in the world, but the best for the world and society will enjoy prosperity for all for the long term.
B Lab drives this systemic change by:
- building a community of Certified B Corporations to make it easier for all of us to tell the difference between “good companies” and good marketing;
- passing benefit corporation legislation to give business leaders the freedom to create value for society as well as shareholders;
- helping businesses measure, compare and improve their social and environmental performance with the free B Impact Assessment; and
- driving capital to impact investments through the use of its B Analytics and GIIRS Ratings platform.
The steps to become a B CORP certified: (Note: what’s required is time to go through the steps and a business plan based on ethical values that lead to actionable steps)
Step 1: Meet Performance Requirement: Complete the B Impact Assessment, which is a self assessment and earn a minimum score of 80 out of 200 pts.
Step 2: Meet Legal Requirement: Determine the business plan decisions for your corporate structure and country of incorporation dependent upon the triple bottom line or values of people, planet and profit. A B Corp Lab interviewer reviews your status to chart your next steps.
Step 3: Make it Official: Sign the B Corp Declaration of Interdependence and Term Sheet. Share publicly with you team, colleagues and clients.
The link to the B Corp: http://www.bcorporation.net/sites/default/files/documents/The-B-Corp_Handbook_Sample.pdf
Sample Questions to Prepare for your B Impact Assessment
- High to Low Pay Ratio: What multiple is the highest compensated individual paid (inclusive of bonus) as compared to the lowest paid full-time worker? Ie >20x, 16-20x, 11-15x, 6-10x, 1-5x
- Check all that apply. *I care about my workers. *I care about the environment. *I care about the community. *I care about the way I run my company. *I care about my customers.
- The Qs will intentionally be challenging and thought- provoking. They are intended to reflect what is best practice across these impact areas, not necessarily what is easy or common. Governance, workers, community, environment, and customers. Feel free to estimate answers on the first run and return with exact figures later.
Difference between a Certificated B Corporation and Benefit Corporation :
Accountability: (same) Directors are required to consider impact on all stakeholders, and must publish public reports of overall social
Transparency: (same) Environmental performance assessed against a third party standard, and must achieve minimum verified score on B Impact assessment
Performance: (diff) B Corp must do a recertification required every two years against evolving standards, while the Benefit Corp may do self-reports
Availability: (diff) B Corp available to every business regardless of corporate structure, state or country of incorporation; while Benefit Corp is available only in 30 US states and D.C. See laws for Delaware, and Oregon/Maryland (LLC options)
Cost: B Lab certification fees range from $500 to $50,000/year, based on revenues; while Benefit Corps are determined by state or provincial filing fees, such as $70-$200
Role of B Lab: Certifying body and supporting 501C3, offering access to Certificated B Corp logo, portfolio of services, and vibrant community of practice among B Corps doing biz together with similar values. While the Benefit Corp is a developed model legislation, that works for its passage and use, offers free reporting tools to meet transparency requirements, plus no role in oversight.
Quotes about B Corps:
"The B Corp Handbook shows how using business as a force for good can be better for consumers, employees, local communities, the environment, and your company’s long-term bottom line." (TONY HSIEH New York Times bestselling author of Delivering Happiness and CEO, Zappos.com)
"My guess is that this new idea [benefit corporations] will turn out to be a winner, that will yield some of our most profitable corporations because of the employee and community support they will inspire”. (ROBERT SHILLER Winner of the 2013 Nobel Prize in Economics and Professor, Yale University)
You Tube Videos to further explain the B Corp and Benefit Corps
Two B Corp Examples:
- SES Consulting- Energy Company is a values based, mission driven company. We have created a business that inspires while making a difference, creates green jobs, and promotes a healthy economy – all while accelerating GHG emission reductions through energy conservation. SES is a certified B-Corporation, and we measure our success each year with more than just profit. Staff life balance, GHG emission reductions, and promoting innovation are part of our bottom line. We’ve taken on the challenge of doing business better. Our big hairy audacious goal is to help our clients save 1 million tonnes of GHGs in a year. We’re starting now by measuring impacts and setting team targets that will grow each year until we reach our goal; because business as usual isn’t enough. (sesconsulting.com)
- Enrollment Resources – a marketing company Enrollment Resources is a leading service provider within the Higher Education Sector. ER works in a field called Enrollment Management. They provide outsource management and consulting services, plus SaaS tools that help schools optimize their conversion rates (CRO). The by-product: improved efficiencies which translate to improved Enrollment Revenues while allowing schools to hold their costs.
In March 2013, Enrollment Resources became the first Direct Response Marketing Company globally certified with the B Corp designation. Companies must complete the full B Impact Assessment, have their answers verified by B Lab and re-certify every two years to certify as B Corporations. (enrollmentresources.com)