What is a B Corp and should you look to become one?
When looking at businesses online, you might have discovered some that advertise themselves as being B Corp certified. This is an accolade that few businesses can boast of, and as part of sustainability month here at Business Leader, we’ve looked at what this means and whether this status offers any benefits.
What is a B Corp?
Businesses with B Corp Certification have undergone and passed the strict B Corp Certification process.
According to the organisation’s website, B Corp Certification measures a company’s entire social and environmental performance.
The process also involves a B Impact Assessment, which looks at how a company’s operations and business model impacts their workers and customers along with the community and environment.
“The B Impact Assessment questionnaire is effectively your scorecard,” says Steve Butterworth, CEO of Neighbourly, one of the first B Corps. “You fill that out and it’s a 250-line spreadsheet. It’s not small. It’s a time sync to commit to doing it, but that’s just because they need to be thorough, so you know that anyone who is certified as a B Corp has gone the extra mile.”
B Corp Certification evaluates all aspects of a business and those who are certified have successfully demonstrated that they have met the highest standards of social and environmental performance, public transparency and legal accountability to balance profit and purpose.
“B Corp Certification is an attractive framework that enables brands the right starting point to balance all stakeholder interests – profit & purpose,” says Ben Black, Director at investment firm Verlinvest.
“For the business I see it often act as a catalyst to attract top-talent who are seeking to work for meaningful, purpose-led brands. It helps companies clarify their mission, strategic direction and role in society, and crystallise areas of improvement.
“For wider society, it ensures much higher standards than those legally required for treatment of team-members, suppliers, and other key stakeholders.”
“The process is, rightly, quite demanding,” says Lysander Bickham, CEO of Leo’s Box and the youngest CEO to have achieved B Corp status.
“The process is very rigorous, going into the finest details including factors such as water usage, through to impact reporting and transparency – with evidence of all aspects needing to be supplied in order to secure points.”
“The difficulties of achieving B Corp status ensures a higher level of trust for the accreditation, which in turn creates value for more businesses.”
What are the benefits of a business undergoing B Corp Certification?
According to the B Corp website, there are just over 4,000 companies across 77 countries and 153 industries with certification, so seemingly any company that meets their strict certification criteria can become certified.
Of course, the strict criteria for achieving B Corp status means that certain businesses might have to make some dramatic changes to their business model to make themselves eligible to meet the criteria, which might put some businesses off.
But if a business were to undergo the seemingly difficult process of becoming B Corp certified, would it be worth it?
“The easy answer to that would be the positive impact on your brand equity,” says Steve. “So, there is, by association, if you’re a B Corp, for those who understand what it means, it’s a fantastic thing to be part of.
“For employees that are looking to work for businesses that are more purposeful, then you know you’re joining one that works that way and thinks that way if it’s a B Corp. We’ve recruited people who’ve said that they really wanted to work for a B Corp. The flipside to the recruitment is that you’ve got staff retention as well.”
According to Lysander: “As a global certification scheme, B Corp is a big step above the ‘business as usual’ CSR strategies. Being part of this community provides the perfect opportunity to explore and implement a better way of doing business.
“There are many people across Britain who want to make a difference and to take the lead through the products and services they use. B Corps are tapping into this.
“I am the youngest for now, but as I learn from the network and community, I can improve and focus my passion, which is a key driver for why I started Leo’s Box.
“We aren’t going to change the world alone, but each of us need to find a way to make a difference. B Corp is about making things achievable, which we can’t do alone.”
With recent reports suggesting more environmentally-firms offer better returns for investors, we were also interested to learn whether becoming B Corp certified can help a business to attract funding and aid growth.
Ben said: “This year has seen record inflows of capital into ESG funds looking for purpose-led opportunities – nearly $2 trillion in total according to the Reuters report.
“So, there is huge appetite for ethical investment opportunities and B Corp provides a rigorous framework that helps filter those for whom purpose is really central and reduces risk of ‘green-washing’.
“More broadly, purpose is a big driver of growth and engagement in consumer brands – younger consumers, in particular, are searching more than ever for brands that reflect their values and contribute to a new style of more balanced stakeholder capitalism.
“Growth opportunity in turn attracts talent and capital, creating the fly-wheel effect I see in many of Verlinvest’s brands such as Who Gives a Crap, Tony’s Chocolonely and Vita Coco that are B Corp certified.”
“In 2019, Unilever, who own several B Corps including Ben & Jerries, announced that their purpose-led, sustainable living brands were growing 69% faster than the rest of the business and delivering 75% of the company’s growth,” says Steve. “That’s the sort of numbers, as a CEO, that make you sit up and pay attention.”
“And whilst not all of them are going to be B Corps, they are sustainable brands and by association, I think they are ok to talk about.”
So, should you look to become a B Corp business?
“Yes, certainly,” continued Ben. “I have seen Verlinvest’s purpose-led brands such as Tony’s Chocolonely (fighting to make chocolate 100% slave-free) and Who Gives a Crap (Toilet-paper that builds toilets) and find it an incredibly useful tool to ensure all stakeholder interests are appropriately balanced.”
“Having said that, it is not for everyone – the process is time-consuming and tough, and in some-cases I see brands that prefer to dedicate more resources to their own impact organisations instead.
“So, it depends on the clarity of the mission of the brand, but it is certainly a powerful force in driving the conversation about how we can all support businesses that in turn support wider society and benefit everyone rather than just shareholders alone, and that’s an incredibly important conversation to be having.”
“Absolutely, 100% other companies should and will become B Corps, but the barriers will be that you’ve got to take the company with you,” says Steve.
“Who are the blockers in the business that may prevent you from doing that? It could be an investor who insists on profit at all costs, maybe not explicitly but that might be what the undertone is.”
“Is it for everyone? Of course not, but I believe the B Corp movement is currently gaining more traction than ever before.”