In today’s business landscape, companies must go beyond mere profit. Businesses are increasingly expected to demonstrate that they are both socially and environmentally responsible. This is where B Corp certification comes in – a globally recognized symbol of ethical, sustainable business practices. There are currently over 8,000 Certified B Corporations in more than 90 countries and over 160 industries.
But what exactly is a B Corp, and why should your business consider joining this movement? In this guide, we’ll break down the essentials of B Corp certification, its benefits, and the steps to becoming one.
What is a B Corp?
A B Corporation (or Benefit Corporation) is defined as “businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.” Certified by the nonprofit B Lab, this title distinguishes companies that strive to make a positive impact on their employees, communities, and the environment, alongside being profitable.
B Corp certification is like the “organic” or “fair trade” certification but for the entire business model. It’s a comprehensive, holistic measure of a company’s sustainability, making it a highly desirable certification for businesses committed to the triple bottom line – people, planet, and profit.
Key Elements of B Corp Certification
- Rigorous Performance Standards: To become a B Corp, companies undergo a detailed B Impact Assessment (BIA) to evaluate their overall impact on society and the environment. This assessment covers areas such as governance, worker treatment, community impact, and environmental practices.
- Legal Accountability: Certified B Corps are legally required to consider the impact of their decisions on all stakeholders, not just shareholders. This ensures that decisions are aligned with long-term sustainability goals, encouraging transparency and accountability.
- Transparency and Public Commitment: B Corps must make their impact reports publicly available, creating accountability and fostering trust among customers and stakeholders. This transparency helps build strong relationships with conscientious consumers and investors.
Why Should Businesses Consider Becoming a B Corp?
The B Corp movement is growing rapidly, with over 8,250 certified companies in across 162 industries and 92 countries as of February 2024. In 2023, nearly 1,800 companies became Certified B Corps, reflecting the growing desire for companies to enhance their environmental, social and governance (ESG) commitments.
Companies like Patagonia, Ben & Jerry’s, and Etsy have all embraced the certification as a way to demonstrate their commitment to sustainable and ethical business practices. Here are some compelling reasons your business should consider becoming a B Corp:
1. Consumer Expectations
Consumers today, especially Millennials and Gen Z, increasingly favor brands that demonstrate environmental and social responsibility. According to recent studies, over 80% of consumers say they prefer to buy from companies that align with their values. By becoming a B Corp, your company positions itself as a leader in sustainability, attracting eco-conscious customers and gaining a competitive edge.
2. Attract and Retain Top Talent
Employees are more motivated to work for companies that have a clear purpose beyond profit. Purpose-driven businesses, like B Corps, tend to have higher employee satisfaction and retention rates. By certifying as a B Corp, you can build a positive work culture that prioritizes employee well-being and social impact, helping you attract top talent in an increasingly competitive job market.
3. More Positive Environmental Impact
B Corp certification pushes businesses to adopt sustainable practices that reduce their carbon footprint and conserve natural resources. Whether it’s implementing renewable energy solutions, reducing waste, or improving supply chain sustainability, becoming a B Corp ensures your company continuously works toward minimizing its environmental impact.
4. Build Trust with Investors and Partners
Investors and business partners are increasingly seeking companies that prioritize sustainability and ethical governance. Having a B Corp certification indicates that your business meets stringent standards of accountability and transparency, making it more attractive to impact investors and partners who share your values.
5. Increased Revenues
There is various evidence demonstrate that B Corps globally are more likely to increase revenue than ordinary businesses. From 2019-2020, 79% of B Corps experienced an increase in revenue, compared to just 54% of ordinary businesses. For 2020-2021, the numbers were 85% and 61% respectfully.
How to Become a B Corp
Achieving B Corp certification can be a long process but the result is truly rewarding:
- Complete the B Impact Assessment (BIA): This online tool helps you measure your company’s impact across various areas, including governance, workers, community, and the environment. Companies need to score at least 80 out of 200 points to qualify for certification.
- Meet Legal Requirements: Your company may need to amend its governing documents to incorporate stakeholder considerations, ensuring that social and environmental performance is built into the legal framework.
- Verification and Certification: After submitting your BIA, B Lab will review your assessment and verify the information provided. The final step is the official certification, which lasts for three years, after which businesses must recertify.
For more in depth information, read our guide to how to become a B Corp.
A Certification that Sets Your Business Apart
In a world where consumers, employees, and investors expect more from companies, B Corp certification sets your company apart. It proves that your business not only cares about profit but is also committed to making a positive impact on the world. By joining the B Corp movement, your business can build trust, foster loyalty, and pave the way for long-term success while contributing to a more sustainable and equitable future.
