The Why & How of Becoming a B-Corp

A new type of business rises in the horizon beyond a new conscious economy skyline.

Source: Carl Heyerdahl, Unsplash

If you open up the mind, the opportunity to address both profits and social conditions are limitless. It’s a process of innovation. — Jerry Greenfield, Co-Founder of Ben & Jerry’s

A new type of business rises in the horizon beyond a new conscious economy skyline. This generation of businesses differentiates from traditional corporate actors in the way they relate to the world. In short, B-Corps strive to be the best for the world. They also have a lot to gain, which we will address shortly.

The why of becoming a B-Corp

Source: You X-Ventures, Unsplash

Becoming a B-Corp has a lot to do with intrinsic motivation. Companies are launched as or applying to become B-Corps because their leaders believe the current economic system is not working for everyone. New generations of entrepreneurs, particularly, are increasingly interested in engaging in work that aligns with their inner values.

This applies to employees, too. A recent study about millennial employees showed that 75 percent of respondents favored a responsible company over a higher salary and 76 percent included the employer’s socio-environmental commitments in their job decisions.

An external pressure also applies. Society, nonprofits, and governments also require companies to become more socially and environmentally responsible. The 21st century responsibility of business extends to all its stakeholders, not just shareholders. Thus, a great motivating factor to become a B-Corp is the opportunity to improve business impact and protect the company’s mission. Moreover, the certification itself is a great way to identify in the market, in order to influence the capital allocation decisions of investors.

Source: Jake Hills, Unsplash

Step 1: Complete the B Impact assessment

At the start, any company aspiring to a B Corporation certification needs to perform an internal evaluation of its business model, operations, and goals and set out a strategy that involves the triple bottom line: people, planet, and profits.

To that end, B Lab offers a free assessment with questions that helps companies assess the sustainability impact of their operations on employees, communities, and the environment. You can always start with the 30 minutes snapshot and advance to the 2–3 hours full impact report.

Step 2: Meet the legal requirements

Another requirement of the B-Corp certification is that companies obtain legal accountability that balances profit and purpose. The expectation is that once a company realises that it has crossed performance thresholds on the triple bottom line dimensions, it can create a legal ground in the firm for incorporating the interests of all stakeholders. This means that the fiduciary duties of directors and managers must incorporate sustainability impact.

Step 3: Get verified and finalise certification

The process of verifying compliance with standards and earning the certification from B Lab is a rigorous one. The impact assessment is challenging enough to ensure that companies are truly operating sustainable business models and that greenwashing behaviour does not pass.

Businesses further need to provide documentation that attests the online assessment data, commit to change their legal status, sign the necessary paper, and pay some licensing fees.

In 2007, the first generation of B Corporations was certified. Since then, the number of firms complying with these standards has increased exponentially. Today, B Corps have obtained legal recognition to pursue a higher mission than profit in over 40 states. Is highly likely that the future will be shaped by these organisations, while traditional corporate forms gradually lose their traditional status.

Originally published at www.ifandnow.com. If and Now is a branding and digital marketing agency that helps purpose-driven brands develop and manage custom marketing strategies. See the original blog post here: https://bit.ly/3hBFVfr.

Climate Conscious

Building a collective vision for a better tomorrow

Maria Antoanela Ionita

Written by

Hungry & foolish. Master’s graduate of Business Sustainability. I seek solutions to our grandest sustainability challenges here & on Sustain-Community.com.

Climate Conscious

Bringing people together from around the world to discuss how to tackle the climate crisis and build a collective vision for a better tomorrow.

Maria Antoanela Ionita

Written by

Hungry & foolish. Master’s graduate of Business Sustainability. I seek solutions to our grandest sustainability challenges here & on Sustain-Community.com.

Climate Conscious

Bringing people together from around the world to discuss how to tackle the climate crisis and build a collective vision for a better tomorrow.

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