What is a B Corp?

What is a B Corp?

08 Jan 2024

In today's world, it's all about the triple bottom line - people, planet, and profit.

And what better way to make sure you're hitting all three than by becoming a B Corp?

These businesses are setting a high bar for environmental responsibility, making sure their impact on Mother Nature is a gentle breeze, not a hurricane. So, let's explore the ways B Corps are making a positive impact on our environment and see what we can all learn from their eco-friendly ways.

B Corps are companies that are taking a different approach to business.

Instead of solely focusing on profit, they recognize that there is a need to balance the interests of their stakeholders, including not just shareholders but employees, customers, and the environment. This triple-bottom-line approach means that B Corps are considering the impact of their actions not just on their bottom line, but also on people and the planet.

B Corp certification is awarded to companies that meet high standards of social and environmental performance, accountability, and transparency. To become a B Corp, a company must undergo a rigorous certification process and an assessment of its impact on a range of stakeholders, including workers, customers, the community, and the environment.

This certification process ensures that B Corps are held to a high standard and are transparent about their impact.

The result of this certification process is a network of businesses that are creating positive change in the world. B Corps are leading the way in sustainable business practices, demonstrating that it is possible to be both financially successful and socially responsible. They are setting an example for future generations and other companies to follow, and are pushing the boundaries of what is possible in business.

Overview of B Corps and Why They Are Important?

A certified B Corporation (or “B Corp”) is a company that has been certified by the nonprofit organisation B Lab as having met rigorous standards of social and environmental performance, accountability, and transparency. Becoming a B Corp certified means making a commitment to long-term sustainability through responsible business practices that benefit all stakeholders—including employees, customers, suppliers, communities, and the environment.

B Lab works with businesses around the world to help them become certified as B Corporations through its B corp agreement.

To be eligible for certification, companies must complete B Impact Assessment (BIA) and meet high standards for social and environmental performance. The standards are developed independently and cover a company's impact in key areas, including Governance, Workers, Community, Environment, and Customers.

B Lab notes it is rare for a company to receive 80 points or higher on their first assessment, and most companies will need to spend further time improving their score, which can be done by using the built-in tools on the BIA. The goal is to create companies that attain financial profitability and are purpose-driven.

What is B Corp?

A B Corp is a type of for-profit business that is legally required to consider the impact of its decisions on its stakeholders, including workers, customers, suppliers, community, and the environment, in addition to its shareholders. B Corps are certified by the non-profit organisation B Lab to meet high standards of social and environmental performance, accountability, and transparency.

A B corporation also needs to create value through customer loyalty and employee engagement initiatives to honour its commitment towards stakeholders' interests. B Corps aim to balance the pursuit of profit with a positive impact on society and the environment, and provide a new model for business that prioritizes the well-being of all stakeholders.

B Vorp V/S Traditional Corporation

When it comes to doing business, there are two paths one can take: the traditional route of maximizing profits at any cost, or the increasingly popular route of becoming a B Corp.

But what exactly sets B Corps apart from traditional corporations?

Traditional corporations, also known as C Corps, have long been the dominant players in the business world. Their sole focus is on maximizing profits for their shareholders. But what about the impact on the environment, or the well-being of employees and communities? That's just a side effect, unfortunately. B Corps are legally bound to consider the impact of their actions on not only their shareholders, but also their employees, customers, community, and the environment.

Another key difference is the level of transparency and accountability required of B Corps.

In order to receive B Corp certification, companies must undergo a rigorous assessment process, including a review of their environmental and social impact, governance practices, and supply chain management. They are then held to these standards through ongoing monitoring and reporting requirements. This level of transparency and accountability sets B Corps apart from traditional corporations, which may not have the same level of scrutiny and may not be held to the same high standards of sustainability and responsibility.

In addition, B Corps also have access to a supportive community of like-minded businesses through B Lab, the non-profit organization that certifies B Corps. This network provides resources and opportunities for collaboration and knowledge sharing, helping B Corps to continue to improve their social and environmental impact.

What is B Corp Certification?

According to the definition by 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 Corp certification is designed to recognize companies that are making a positive impact in the world and balancing the interests of all their stakeholders.

The certification process involves a comprehensive assessment of a company's practices and policies, including its governance, worker treatment, impact on the local community, and environmental impact. This assessment is based on a set of rigorous standards developed by B Lab, and companies must meet or exceed these standards in order to receive B Corp certification.

By becoming a B Corp, companies are demonstrating their commitment to creating positive change in the world and leading the way in sustainable business practices. B Corps are held to a high standard and are transparent about their impact, which helps to build trust with consumers and other stakeholders. Additionally, being a B Corp provides companies with access to a community of like-minded businesses, resources, and support from B Lab, and opportunities to collaborate and drive positive change.

What Are the Steps to Becoming a Certified B Corp?

The B Corp certification process is designed to assess a company's impact on a range of stakeholders, including workers, customers, the community, and the environment. This comprehensive assessment is based on a set of rigorous standards developed by B Lab and covers a range of areas, including governance, workers, customers, community, and environment.

  • To become a B Corp, a company must complete the certification process and meet or exceed the legal requirements set by B Lab. The process begins with an online self-assessment that covers a range of topics, including a company's governance structure, worker treatment, impact on the community, and environmental practices.

  • After the self-assessment, B Lab will review the company's answers and may request additional information or clarification. If the company meets the minimum requirements, it will then be required to provide more detailed information on its impact and practices through an in-depth verification process. This process may include site visits, interviews with stakeholders, employee recruitment process, members of the local community in which the business operates and independent reviews of the company's data and information.

Once the certification process is complete, B Lab will make a final determination on the company's eligibility status. If a company meets the standards, it will receive B Corp certification and be recognized as a company that is committed to balancing profit, people, and the planet.

Importance of B Corp Certification

The concept of B Corps, has only recently been taken up by business owners and entrepreneurs in the U.S. and around the world. But despite its relatively new status, there's no denying the impact that this type of corporate structure can have on both the local economy and society as a whole.

According to GfK's Consumer Life Global report 2022

73% of global consumers think it is important that companies take environmentally responsible actions, and
36% of global consumers will select one brand over another specifically because it supports a cause they believe in.
This shows:

Consumers are increasingly demanding that companies do more than just make profits; B Corp certification shows that your business is listening.

Here are just some of the reasons why B Corps are so important:

  • Doing Good for Society: At its core, a B Corp is a company that looks beyond just profit. It seeks to create social change with their work and takes into account how their actions affect not just customers but also people in the wider community. This often leads to businesses making more socially responsible decisions, such as investing more in disadvantaged communities or providing better working conditions for employees.

  • Environmental Responsibility: Many businesses operating under the B Corp model strive to become carbon neutral or take other steps to reduce their environmental impact. Companies may invest in renewable energy sources or recycle materials more efficiently, all while aiming to achieve zero-waste status along the way.

  • Building Consumer Confidence: Consumers are becoming increasingly aware of environmental and social issues and want businesses to be held accountable for their practices. By obtaining certification from a reliable third-party organization like B Lab, companies can demonstrate their commitment to sustainability without having to make promises they can't keep. As such, consumers know that these companies can be trusted when it comes time to purchase goods and services from them.

  • Strengthening Local Economies: Studies have shown that small businesses owned by locally-minded entrepreneurs are essential for providing stability within an economy. These small business owners opt for local suppliers whenever possible and ensure money circulates within a smaller area rather than going elsewhere externally. With the help of benefit corporations, these same principles can be applied on an even larger scale with multinationals setting up shop in cities around the world whilst never forgetting their local roots.

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