B Corp Revolution

The Rise of Meaningful Business

More and more businesses are becoming B Corps – effectively altering their corporate DNA to legally mandate a triple bottom line of people, profit and planet. Is “Capitalism Lite” the new way of doing business?

BY SAMUEL DIXNEUF PHOTO JURRE ROMPA

HANNAH MUNGER Head of PR & Communications, B Lab

The annual study Edelman Earned Brand tells how brands can “earn, strengthen and protect their relationships with consumers.” Around 40,000 respondents in Brazil, China, France, Germany, India, Japan, the U.K. and the U.S. take part and in 2018, one opinion stood out. The report found that 64 percent of consumers now self-identify as “Belief-Driven Buyers” – a 13-point increase from 2017 – and concluded: “These consumers said that they use brands to demonstrate their personal values. They will choose, switch, avoid or boycott a brand based on where it stands on the political or social issues they care about.”

Another Edelman study focused on employers, and in 2019 it noted a similar shift when it comes to what people demand of the companies they work for. These studies are only two examples that demonstrate how values change in society and about how companies should – or must – take into account other factors than the bottom line to remain relevant.

A growing group of companies - the B Corporations - endeavor to do just that.

Founders with a mission The three founders of the nonprofit organization B Lab had anticipated this trend towards valuesdriven business long ago.

“B Lab was founded in 2006 by 3 friends, Bart Houlahan, Jay Coen Gilbert, and Andrew Kassoy in an effort to create the market infrastructure to make it easier for mission-driven businesses to protect and improve their positive impact over time,” explains Hannah Munger, Head of PR & Communications at B Lab.

After certifying the first nineteen B Corps in 2007, B Lab’s founders realized that they needed a legal framework and credible standards in a marketplace where everyone claimed that they were a “good” company.

Seeing this as the natural next step, in 2010 B Lab began lobbying US states to pass “benefit corporation” legislation. Benefit corporations expand the obligations of boards, requiring them to consider environmental and social factors, as well as the financial interests of shareholders. This gives directors and officers the legal protection to pursue a mission and consider the impact their business has on society and the environment.

Coming of age Meanwhile in corporate America, business leaders had begun slowly waking up to the fact that shareholder profit isn’t everything. Last summer The Business Roundtable, an association of CEOs of America’s leading companies, declared that business was “responsible for providing economic benefits to all, not just its investors.”

After the official announcement from the Business Roundtable, thirty American B Corporations including Cotopaxi, Klean Kanteen and Patagonia, seized the occasion to challenge the Business Roundtable. A full-page ad was released in the New York Times at the end of August 2019, with the headline Get To Work: “We are businesses that meet the highest standards of social and environmental performance. Business Roundtable, we’d like

The 2019 B Corp Summit took place in Amsterdam in the end of September, bringing together Certified B Corps, business leaders, changemakers, and companies from Europe and beyond.

B CORPS & B LAB Certified B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. B Corps are accelerating a global culture shift to redefine success in business and build a more inclusive and sustainable economy. B Lab is the nonprofit that administers the B Corp certification. bcorporation.net

NATHAN GILBERT B Lab Europe, Executive Director

ELIZABETH SOUBELET Board Member, B Lab France Globally, there are over 3000 certified B Corporations located in 71 countries.

new legal status to make it more credible.”

While national legal structures may pose challenges, Hannah Munger believes that the B Corp certification process as a whole remains credible even in international contexts:

“The process to achieve B Corp certification is rigorous and holistic. Certified B Corporations must achieve a minimum verified score on the B Impact Assessment (or BIA)—an assessment of a company’s impact on its workers, customers, community, and environment—make their score public on our website, and recertify every three years. Certified B Corporations also amend their legal governing documents to require their board of directors to balance profit and purpose.”

to help you get there, too, to meet your newly announced stakeholder values. Let’s get to work—together.”

An international movement Today, a company can register as a benefit corporation in 34 states and Washington, DC. Italy was the first country outside the US to adopt this policy, and Colombia and the province of British Colombia in Canada have since followed. In Europe, there are now about 600 B Corporations in 20 countries, with a steady growth. Nathan Gilbert, B Lab Europe Executive Director explains:

“The movement really picked up the last couple of years as there are more leaders and influential companies paving the way. The certification applies easily to European constraints which makes it globally relevant.”

Many of the European countries already have laws and regulations addressing companies that want to integrate stakeholder consideration into their governance structure. However, these national systems are not always a perfect match with the legal requirements in the B Corp certification process, which have some concerned about its overall exportability.

For instance, in 2019 France enacted Loi Pacte, which puts forward the special legal status of a Société à Mission. (“mission-driven company”). B Lab France subequently issued a few recommendations to explain that “the system created by the Loi Pacte was too permissive and could lead to mission-washing. Elizabeth Soubelet, board member of B Lab France, comments:

“We think it is important to strengthen this Join the community From just 82 B Corps in 2007 to over 3,000 today, B Corps are booming.

“People want to buy from, work for, and do business with companies they believe in and with whom they share values – like B Corps.”

There are three layers in the B Corp movement explains Elizabeth Soubelet from B Lab France. Firstly, the B Impact Assessment (BIA), an online, open source tool, which helps businesses assess where they are and think about how to renew their business model. The second layer involves the certification for companies who really want to challenge themselves.

“The last layer is a tight knit community which grows together and cooperates as often as possible.”

READY TO TAKE THE TEST?

Did you know that... Cotopaxi, Finisterre, Kathmandu, Klean Kanteen, Patagonia, Picture Organic Clothing, Sympatex, Tentree, United By Blue ...are all Certified B Corps?

For those interested in becoming a B Corp, the first step is the B Impact Assessement (BIA), an open source questionnaire allowing any business to challenge itself. A company needs 80 (verified) points out of 200 to pass, and certification must be renewed every three years. The certification is only for “for profit companies.” bimpactassessment.net

“Becoming a B Corp was a very humbling experience”

The French outdoor brand Picture officially became a B Corp in November 2019. Florian Palluel shares about the long journey.

BY SAMUEL DIXNEUF

Why did you choose to become a B Corp? When Picture was born, 10 years ago, it was imagined and conceived as an eco-friendly brand. Since then, we have relentlessly questioned what we were doing, socially and environmentally, so as to keep improving. Becoming a B Corp was a way for us to have this recognized and to realize whether what we had done had any value when confronted with an exacting certification (200 questions tackling a wide variety of topics, ranging from governance and human resources management, to the material used in our production). Finally, we considered that the certification would provide us with a road map: What could be done in the future to be even better, and how?

How did you get started? In April 2019, I started working on the B Impact assessment, an open source questionnaire provided by B Labs. The idea was to see whether our score could go beyond 80, the minimum required to be certified. This process took several months. According to my evaluation, Picture could reach 107 points, hence we got in touch with B Lab. From September to November, B Lab audited the brand and our score quickly fell to 57! It was a shock! We didn’t know why we lost so many points. Afterwards, we had to provide all the supporting documents to prove that what we were saying was accurate. Gradually, our score went back up and made it to 85.4. It was a very humbling experience. Were there any more surprises or realizations along the way? We were particularly proud to see that our commitment to using recycled fabrics and organic cotton on a wide range of our products, and not only in one item of a collection, paid off. A brand has to be fully committed to change. However, some of the things we had implemented with our supply chain couldn’t be taken into account as it was too difficult to get the right documents to prove it.

What advantages does the B Corp certification provide? Firstly, it provides a roadmap on how to improve. I also think this certification is the most comprehensive one. It certifies all the aspects of a company, not only one particular aspect of its activity. As such, it provides us with extra credibility, especially on the American market. In addition, there is some kind of solidarity between B Corp members. We cooperate and exchange best practices.

What’s next for your company? We have now amended our company’s statuses to incorporate the required paragraphs showing that we are willing to have a positive environmental and social impact on the world. We even went further by protecting this “mission” even in case of ownership changes. Now we are determined to improve our score for our next certification in 3 years. We’ll move forward collectively, with all our stakeholders and employees.

FLORIAN PALLUEL Sustainability and Transparency Manager, Picture Organic Clothing.