Chris Marquis is a Professor at Cornell and author of Better Business: How the B Corp Movement is Remaking Capitalism.
“You have these things like massive environmental degradation, rampant discrimination, inequality, and many people sort of tie those issues to problems with our companies, polluting more or who they hire, who they promote, etc.
Many believe we’ve entered a new era - one where consumers demand not just quality products and services, but also transparency, accountability and action in terms of how they impact the world.
Was a product made sustainably? Who made it, are they being treated and compensated fairly? Where did ingredients come from, are they fair trade? How are employees treated? What are you doing to make your company’s leadership more diverse?
So when demand for perceived responsibility goes up….We don’t need Milton Friedman to tell us - supply goes up too.
Fans of the NBC sitcom 30 rock might remember “Greenzo,” played by David Schwimmer, he was a fictional mascot created by NBC as part of a companywide environmental initiative. It’s absurd, but it’s not that far from reality. Brands use any means they can to shout at consumers “Hey, we’re not an evil corporation. Look at our environmentally conscious, naturally-derived, ethically-considered, responsibly-sourced cassava chips.
Which leaves us with at least three questions.
What does any of that actually mean?
How can we determine who’s for real when it comes to businesses doing good?
What the hell is Cassava anyway?
B Lab & The B Corp movement (6:18)
One company aiming to help answer that question is B Lab. They’re known for starting the B Corp Certification - a set of standards used to measure the positive impact a company has on the world. For the 3,500 businesses in 70 countries who have become B Corp certified, it means they’ve met those standards and use the B Corp model to guide how they do business.
Walk through the grocery store and you don’t have to look hard for the B Corp logo - Ben & Jerry’s ice cream, Method cleaning products, Danon yogurt or International Delight coffee creamer from parent company Danone….The list of Certified B Corps also includes beloved brands like Patagonia, Allbirds, and Kleen Canteen.
How the B Corp certification works
The certification means two things. First is the actual legal structure of the business - we’ll get to that in a bit. Second is the B Lab Impact Assessment. It’s a free, roughly 150 question survey that pinpoints the impact a business has across five areas: the environment, workers, community, customers, and shareholders. The assessment aims to understand how the business operates. Leaders answer questions like:
How much do you rely on renewable energy to operate corporate facilities?
What percentage of your company’s management is from underrepresented populations?
How do you prevent the exploitation of workers?
Are employees allowed to take paid-time off for community service?
How many hedgehogs work in your IT department?
Ok. That last one is NOT one of the questions but it would be pretty cool if they added it.
Based on industry benchmarks set by B Lab, the more positive the impact, the higher the score. Add each score together - and you get the Overall B Impact Score. 80 is the minimum to become certified.
Accountability meets flexibility (8:04)
There are many routes to become certified because different companies invest in different areas.
For example, Patagonia’s score of 151.4 is one of the highest of any B Corp. As a company who’s become famous for doing things like donating $10 million in tax cuts to environmental charities, scored highest on community and environment, the two areas making up for well over HALF their total score.
King Arthur Flour took a different route to the certification. The company’s Worker score was a whopping 61, way above the average of 22. Why? It’s an 100% employee-owned company, they pay at least 14% above minimum wage, they offer things like counseling and wellness services to employees, and achieved an employee satisfaction score above 80%.
When King Arthur claims to treat their employees well, you don’t have to take their word for it. It’s been quantified and verified. That’s the beauty of the B Impact assessment: it looks at these MAMMOTH problems facing the world, and says these businesses are helping solve those problems, and here’s how. Down to every last employee benefit, social program, and carbon emission.
Beyond the public perception, attracting EMPLOYEES has undoubtedly become one of the primary benefits touted by the B Corp movement. Here’s Chris Marquis again:
“I've interviewed now probably a hundred I-Corps over the years... retention is way higher than their competitors. It's higher than before they went through the process because people want to work at a place where they're treated humanely and have good benefits. It just makes a lot of sense. On the other side of the employee attraction side, many companies like Athleta, Kevin O'Leary and New Belgium Brewery have all told me that in the last few years… 25 plus percent of the people that come in applying for jobs, they are on the application and we are why people want to work for us. They mentioned because you're a B Corp.”
Becoming Certified (10:06)
As anyone just about anyone who has pursued the B Corp certification will tell you, the process is no walk in the park.
“it's not something necessarily the companies are enjoying at the time. “
That’s James Ghaffari, Director of B Corp Certification at B Lab UK.