Businesses all over the world are redefining what "success" looks like. Many forward-thinking executives are replacing their goal of slashing corporate spending with dual bottom line goals that include profitability and social justice. But why would business executives add more to their plate?
Increasingly, consumers are taking their business to companies engaging in social change. They want businesses to advocate for the environment, treat employees fairly, and improve their communities. And, transparency is key—businesses must show accountability and real-world actions, rather than bandwagon claims of integrity.
So how can a company demonstrate commitment to positive change? How can employees and customers alike recognize corporate efforts? One way is by earning a B Corporation Certification.
What Is a B Corp Certification?
B Corp Certifications were established through a nonprofit called B Lab. This organization was formed in 2006 with a unified vision to provide businesses with resources and governance to impact global change. Businesses can obtain a B Corp Certification as a way to prove their commitment to improving their community, employees, and the environment.
According to B Lab, a company that obtains this certification is:
A new kind of business that balances purpose and profit. They are legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment. This is a community of leaders, driving a global movement of people using business as a force for good.
As of October 2018, B Lab has certified more than 2,500 companies in more than 50 countries. Some well-known companies with B Corp Certifications include:
From making ice cream to outfitting consumers for their next adventure, the nature of B Corp companies is far from similar. In fact, companies pursuing a B Corp Certification needn't be limited to corporation structures—they can be private, publicly-traded, sole proprietors, LLCs, or subsidies of publicly-traded companies. To date, most companies that have obtained this certification are smaller businesses, as opposed to larger corporations.
Perks of Obtaining a B Corp Certification
So why should a company get certified? The simple answer to this question is it’s a good thing to do. Obtaining a B Corp Certification means that a business has taken steps to improve the impact on the environment, the community, and their workers. Additionally, B Lab identifies common reasons B Corp companies get certified, which include:
Amplifying a voice for social change
Attracting a workforce that cares about the company mission
Building relationships with other impactful companies
Improving impact by setting goals
Leading a movement of social change
Protecting the company mission through a legal framework
By making the choice to make a positive global impact, companies that pursue B Corp Certifications must follow guidelines to implement changes in their business practices. A few of these changes impact the following:
Workers
Companies that treat their employees well enjoy a pleasant atmosphere, synergistic culture, and improved productivity. In fact, research by Social Market Foundation found that making changes to improve workforce happiness can boost productivity by up to 20%. So, B Corps not only provide opportunities and benefits to their employees, but they also find a more efficient workplace.
To offer incentives to employees and to illustrate what is expected of them, B Corp companies can create employee handbooks, offer exceptional employee benefits, and implement programs that encourage employee wellness. Some employee programs include:
Stress management: yoga, gardening, massage, stretch breaks, mindfulness sessions
Mental health: paid mental health days
Fitness: gym memberships, in-house classes
Nutrition: healthy snacks, nutrition classes, Weight Watchers program
Work/Life balance: dogs in the office, flextime, remote working
Goal management: organized fitness outings, wellness programs, company competitions, biometric testing
B Corp organizations have different programs that support employee well-being. Perhaps one of the most beneficial of these is mindfulness programs, which, according to Corporate Wellness Magazine, can improve energy, awareness, creativity, and overall health.
As an added bonus, organizations that offer employee-focused programs enjoy the benefits of attracting and retaining better talent. Forbes reports that creative benefits, such as mindfulness programs and wellness incentives, engage employees in a way that makes them personally invested in the organization. In fact, 87% of employees take wellness programs into consideration when making employment decisions.
Environment
With growing tides of environmental issues covered in the media, the last thing organizations need is to lag behind global sustainability movements. Accordingly, Cone Communications reports that 91% of consumers believe that companies should focus their efforts on responsible social initiatives, rather than just profit margins.
B Corp companies identify and improve their environmental impact, which ultimately contributes to positive environmental change and longevity. Some environmental efforts that B Corp Certifications recognize include:
Calculating greenhouse gas emissions
Implementing workplace recycling guides
Monitoring water usage
Monitoring hazardous and non-hazardous waste and
Utilizing renewable energy resources
Cone Communications also reports that 86% of consumers believe companies that make corporate social responsibility (CSR) commitments should follow through and communicate their results to the public. Legally, B Corp companies are required to do just that. While it may appear as additional work, this is an optimal time for businesses to spread positive brand awareness and forge a relationship with their customers.
Community
As B Corp companies, organizations establish efforts to improve and give back to their communities. Community improvements give businesses a positive reputation, and also make the community a better place to live and work.
Focusing on community also entails evaluating suppliers and distributors, because locally-sourced products and resources stimulate the local economy. According to B Lab, a few other community-focused improvements include:
Community service programs
Supplier-evaluation surveys
Locally-sourced suppliers and distributors
Local purchasing policy
Worker training education programs
B Corps vs. Benefit Corporations
When researching B Corp Certifications, many people confuse them with benefit corporations. While similar in that they both require legal stipulations for business conduct to promote social change, benefit corporations are organizational structures denoted when registering a new business with the government.
Benefit corporations are legal business structures in the same way corporations, LLCs, and sole proprietorships are. To add to the confusion, a benefit corporation can also be a B Corp company, because corporations can obtain B Corp Certifications. Once a company meets the standards to file as a benefit corporation, it may also apply for B Corp certification. Simply put: Benefit Corporations are established when you incorporate with the IRS, whereas B Corps are businesses that have earned a B Corp Certification through B Lab.
How To Obtain a B Corp Certification
The only way for a company to obtain a B Corp Certification is by taking the verified B Impact Assessment through B Labs. This is B Lab’s method of evaluating a company based on employee, community, customer, and environmental impacts. In order to maintain B Corp certification, companies must pay the annual certification fee and retake the assessment every three years.
So why would a company pay to play? According to Nielsen’s Global Corporate Sustainability Report, global consumers will pay more for brands committed to sustainability, community, and social value. In 2015, sales for sustainable brands had grown more than 4% globally, whereas other brands have grown less than 1%.
According to Harvard Business Review, consumers are unwilling to accept a brand’s commitment to “sustainability” without an authentic demonstration of commitment. This is where a B Corp Certification comes in handy.
Because B Lab makes these assessments available to the public, companies are able to see how they compare to other businesses. Moreover, this means that a business can easily evaluate areas of improvement, as well as explore other businesses’ sustainable practices for inspiration. B Lab offers tools and resources to help businesses implement improvement strategies.
To obtain B Corp Certification, companies must show:
Verified performance: B Lab looks at components that add up to show the “overall positive impact of the company” in question. Companies must take the assessment and achieve above a certain score, which varies depending on company size, type of organization, and industry.
Legal accountability: B Corp companies have to change the documents that govern the foundations of their businesses to balance profit and purpose. This ensures that a business is actually committed to positive social initiatives. In addition, companies must follow legal requirements based upon their country of residence and type of company.
Public transparency: All B Impact Reports are visible on B Corp’s website to anyone. Because a company is reassessed every three years, these reports provide a method of accountability for all included impact measures. This also incentives executives to keep their company in high standing. If you’re curious about what’s included in the report, take a look at the sample below.
Improve Your Business, Impact The World
Consumers no longer care about unfounded claims of “virtuous” business practices. That’s why B Corp businesses have committed to social and environmental change through accountability and transparency. Businesses demonstrate clear efforts of improving ecological impact, employee well-being, and community practices.
Whether your business is pursuing its B Corp Certification or your B Corp company is looking to expand its employee programs, Mindfulness Strategies can help. As an accredited mindfulness organization, we offer guided corporate mindfulness programs that improve your company’s social impact and give employees a wellness program they deserve. For more information on implementing a mindfulness program in your organization, contact us.