Good Corp, Bad Corp? Transforming the Workplace via B Corp Certification

How do you distinguish between those that say what they mean, and those that mean what they say? Intention is everything not just in business, but in life; yet even something as strapping as an authentic integrity can often be difficult to pin point in an environment of smoke and mirrors.

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Enter certifications such as ‘B Corp’.  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.  Companies that enter the rigorous qualification process have made a lifetime commitment (recertification is every 3 years) to value people and planet, alongside profit, ensuring that those doing the talking, are also doing the walking.

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For businesses, it’s a means of having a rigorous objective world view of where they are doing well, and where there is room for improvement when it comes to social and environmental impact. It’s also a means of linking arms with a network of like-minded leaders that believe in the power of change promised by the use of ‘business as a force for good’.

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Starting in the US and sweeping the globe, there are currently almost 3,000 certified companies to date, including household names such as Patagonia, Innocent, Toast Ale, and Ben & Jerrys, and recently The Guardian and The Body Shop.  Think of the 1SO 26000 (guidance on how business should operate in a socially responsible way), Marine Stewardship Council (a non-profit conserving ocean life) and Fair Labour Association (promoting adherence to ethical labour laws) rolled into one governance of the good.

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Having already successfully lobbied to change the law in 2010 (the kind of stakeholder model the B Corp founders advocated, balancing profit with other considerations, didn’t legally exist previously), they’ve now set their sights on the world of every day work.

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One thing to note is that whilst B Corps are socially and environmentally driven, they still recognise the importance and incentive of profit – harnessed in a responsible way.  This is a sentiment shared by progressive East London flexible workspace,  x+why, where Chris Turner, the executive director for B Lab UK is based. ‘The way we see it is that we are capitalists, we see and recognise the huge amount of wealth and prosperity that capitalism has delivered. But what is increasingly being recognised is that we talk about it from the perspective of, ‘there’s an error in the source code’. The notion that actually we need to upgrade capitalism to be more reflective of the role that business should be playing in society.’

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What do you have to do to get certified?

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The first stage is completing the B Impact Assessment. This is available for free online and is essentially an extensive questionnaire that delves into the detail behind how companies operate. There are 5 main categories to complete:

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1.   Governance: how a company is run, is compensation tied to achieving any environmental or social metrics for example

2.   Workers: are there fair wages and health and a good standard of health and safety

3.   Community: are suppliers ethical, or is there diversity within the company

4.   Environmental Impact: raw material sourcing and carbon footprint measurements

5.   Customers: are channels in place to ensure efficient communication

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The assessment is scored out of 200, with 80 or more being a necessity for companies looking to be eligible for certification. As the process can at times be a little lengthy and confusing for first timers, spaces such as x+why have established programmes like the WhyB Programme.

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The WhyB Programme offers accountability and guidance, carving out dedicated time over a number of weeks, in order to walk through the process with B Leaders on hand for live, focused assistance. It also serves as a brilliant opportunity to bring like-minded businesses and founders together, as well as addressing any outstanding concerns and questions from the beginning of the process, whilst offering feedback about improvements that could be made where necessary.

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Upon passing the initial stage, a B Lab team member will contact the company to request supporting documentation that evidences the results. The company must then modify its legal DNA to include its social and environmental ambitions, alongside its financial goals.

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So is it worth the effort?

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One of the benefits of being a B Corp that might be less evident to the average consumer, is the way in which it can help founders bake their mission into a company, so that it lasts even when the business changes hands. After the B Lab founders themselves made previous exits only to see the original values incinerated, it became a prerequisite that converting out of B Corp status once it had been attained would take a two-thirds shareholder vote.

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Chris Turner comments: ‘it’s been pretty dramatic seeing the increasing number of listed businesses, multinationals, coming to us and asking about what it takes. What does it take to be a B Corp, and obviously the bigger question there is – what does it take to be a business that integrates a purpose, and is committed to being a force for good in everything that it does? And of course that’s a challenge… If you’re starting a business from scratch you can just embed the DNA from the beginning and B Corp provides the framework to do that. But I also think so much of that is down to leadership, and seeing the leaders of business walking the talk when it comes to purpose.’

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Statistically, there is a positive correlation between becoming a B Corp and subsequent growth and return. Claiming an identity as a company interested in both shareholder and stakeholder success can help communicate value to customers and standout in the midst of a ‘greenwash revolution’.  It’s also estimated that B Corp businesses grow quicker than their non-certified counterparts. In February 2018, year-on-year data showed that UK B Corps grew at a rate of 14% compared to the country’s GDP growth rate of 0.5%, which suggests customers are actively choosing to spend more money with ethical businesses.

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The largest demographic of uptake has been Small Medium Enterprises (SMEs), that are agile enough to make the changes the certification requires, creating a grassroots movement of business as a force for good. It could be argued that getting there first, also offers the potential to go furthest. The qualitative evidence gathered from B corp application materials reveals firms to believe that ‘the major crises of our time are a result of the way we conduct business’, incentivising them to ‘join the movement of creating a new economy with a new set of rules, and redefine the way people perceive success in the business world’.  

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Find out more about x+why’s WhyB Programme here

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Or for more insight into purpose-driven business, B Corp certification, and the impact of a triple bottom line, tune into the Why’s Words podcast episodes with Chris Turner from B Lab UK, and Rob Wilson, Chief Toaster at B Corp certified Toast Ale

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