B Corp - what and why.
What is a B Corp?
Certified B Corporations (B Corps) are companies that are certified by B Lab, a nonprofit organisation, who verify that high standards are being met in the areas of:
social and environmental performance;
public transparency; and
legal accountability to balance profit and purpose;
“a rigorous assessment of a company’s impact on its workers, customers, community and environment.”
Certified B Corporations must achieve a minimum verified score on the B Impact Assessment—a rigorous assessment of a company’s impact on its workers, customers, community and environment. Certified B Corporations must also amend their legal governing documents to require their board of directors to balance profit and purpose.
These steps demonstrate that a firm is following a fundamentally different governance philosophy than a traditional shareholder-centred company. The combination of third-party validation, public transparency, and legal accountability help B Corps build trust and demonstrate they are having a genuine impact.
"...the three Ps - Profit, People, Planet."
B Corps often talk about their commitment to a triple bottom line. This is the idea that a corporation should account for three bottom lines - Profit (as normal) but also People and Planet - the three P’s. In other words, it aims to measure the financial, social and environmental performance of the corporation over a period of time, on the basis that just considering financial profit ignores the other costs of doing business which may not be measurable in £’s - think the public health cost of cigarette companies, environmental impact of the plastics industry or impact on workers from low-cost outsourcing of labour to developing economies.
The B Corp community has grown to 2,500+ companies in over 50 countries since the first in 2007.
Examples of well known B Corps include:
Patagonia (probably the best known purpose driven company - the How I Built This podcast with the Patagonia founder, Yvon Chouinard, is fantastic);
Innocent smoothies; and
Ben and Jerry’s.
Igloo is the only property developer in the UK that is a certified B Corp.
Pending B Corporation status
In order to be certified, in addition to the previously mentioned steps, a company must have a year’s worth of trading history. It’s for that reason that Stories is a pending B Corp.
We have passed the legal test, signed the B Corp commitment and amended our company articles to hold ourselves accountable to our commitment to balance profit and purpose. We have submitted our impact assessment which scores above the minimum threshold and have an action plan in place to ensure we pass verification at the end of the year.
A small example of what this includes is our decision to use recycled furniture for our new office and only buying local for office supplies.
A bigger example is a commitment to see if we can make our operating business carbon neutral, which we are working through at the moment.
Why have we chosen to become a B Corp?
The process of B Corp certification is thorough, involves doing business in a new way and, ultimately, isn’t easy. Our purpose and mission came before we started thinking about B Corp certification, but we soon realised we wanted a way to hold ourselves accountable to it, no matter what. B Corp is part of how we do that. It elevates it to the highest level of our business and if we fail to maintain our score, we won’t get re-certified.
Because of this rigour, B Corp certification helps provide some proof that a company is doing what it says it is.
We feel that this is particularly important in an industry where there is often justifiable distrust and a lot of marketing hype that makes it difficult to know who is actually doing what. It is somewhat comparable (although without quite the reach yet) of certifications such as Organic or Fair Trade that we see in the food industry.
The upside of this is that it also gives us a concise way of articulating a core part of our brand - our social and environmental impact. It helps individuals clearly distinguish between companies that are truly committed to a broader set of stakeholder values, and those just paying lip service.
In addition to assessing a company’s performance, the B Impact Assessment explains the reason for each of its scoring questions and provides case studies as evidence for how other companies have performed and the impact they have.
We develop our own policies and procedures to ensure our performance - a process that requires us to grow our understanding of what social and environmental impact means and how we can achieve it.
The assessment quantifies our performance allowing us to set goals. We can also benchmark against other companies (the reports are all publicly available) identifying where we under / over perform. B Lab provides a lot of these analytics tools and we are building the rest in house.
One of the main benefits of certifications such as B Corp is that they build awareness of the importance of balancing the three P’s and having better, more transparent governance. This helps other businesses join this movement and makes us more conscious of our decision making. We are part of a business community (called the B Hive!) driven by a similar purpose and, I for one, am more conscious of my own purchase decisions and now choose B Corp where I see it. I just bought a KeepCup and if nothing else it’s a lovely drinking experience.
So in conclusion, not only is B Corp holding us accountable, it’s helping others understand our mission, it’s teaching us how to be a better business and it’s giving us access to a community of change makers.
If you made it this far, it suggests you may be somewhat interested in B Corp Certification. If so, BWB (law firm and B Corp) were fantastic, so do email Stephen Callender. We’d be equally delighted to share our own experiences. Each industry has a differing assessment, so we’ve also built a tool to help us see where to focus our efforts to maximise our B Corp score, which is invaluable.
For those looking for clarification between B Corporation and benefit corporations …
Being a Certified B Corp is subtly different to being a benefit corporation. A benefit corporation is a specific legal structure for a business, (in the way LLPs or Ltd companies are) that creates a fiduciary responsibility to pursue positive stakeholder impact alongside profit. There is no verification that they are actually fulfilling this responsibility, unlike Certified B Corps who undergo an annual verification by B Lab. Being a benefit corporation is one way of passing the legal governance requirement.