It is said that the B Corporation concept is to business what Fairtrade certification is to coffee.
Designed as a unique tool to enable for-profit companies to prove they are operating within rigorous social and environmental standards – and being totally transparent about how they are performing in creating positive change – the B Corp movement has grown impressively these past few years. Today, there are more than 2,400 certified B Corps from 50 countries – from Portgual’s spa business, The Manipedi, to Washington DC’s only bank solely dedicated to community development finance, City First Bank.
To recap: in order to become B Corp-certified you must be assessed by an organisation called B Lab and meet the required standards. There are three steps involved:
- Complete a ‘B Impact Assessment’. You need to score at least 80 out of 200 points;
- Meet the legal requirements and work on what amendments you can make if you don’t currently;
- Sign the ‘B Corp Declaration of Interdependence’ and term sheet making it official.
One reason the certification appears to have gained so much traction is the need for companies to talk to consumers about subjects not yet that familiar. According to B Lab, 65% of people that buy stuff want to support brands possessing a strong purpose.
The problem is, just 45% of consumers are able to properly and confidently identify such a company. B Corp certification offers a simple way to articulate a responsible approach to business.
However, thus far, the concept has been more appealing to small businesses than it is has been for large multinationals, for instance. The simplicity of the certification process encourages companies to focus on three specific metrics: to create practical (economic and meeting customer needs), societal (positive community impact) and tribal (fostering connections between stakeholders) value.
Get these three factors right and you will create a brand that has purpose and a business that contributes to everybody, rather than merely shareholders. Not only that but you will find economic success too. Since the launch of B Corporations in 2015, certified companies have experienced an average year-on-year growth rate of 14%. Some of the top B Corp FMCG brands grew on average 21% in 2017, compared to a national average of 3% across their respective sectors.
Achieving B Corp status is a lot easier for more lean and nimble SMEs that do not have such ingrained and hefty cultural legacies to overcome. B Lab wants to change this and, aware of the prize on offer, more big companies want help in effecting real change in their organisations.
The creation of the Multinationals and Public Markets Advisory Council is B Lab’s response, to help larger companies get to grips with the demands of B Corp status. The group has been working to develop a more useful path to certification which makes the process more efficient, with new standards and supplementary certification requirements specifically designed for multinationals. The organisation has made it clear that, while it is important to bring more multinationals into the fold, it will not fundamentally change the rigour or principles of the B Corp movement.
The ball is well and truly rolling, with the likes of Unilever the first Fortune 500 company to commit to looking at how it might achieve B Corp status for more of its brands (of course, Ben & Jerry’s is already a B Corp).
The water and dairy-products business Danone has also gone public with its desire to one day be ‘B’ certified. In fact, four of Danone’s subsidiaries have already been certified with another seven brands “in progress” with CEO Emmanuel Faber publicly stating that becoming certified will solidify the company’s commitment to sustainability.
As more and more companies acknowledge a need to articulate their purpose, initiatives like B Corp will only grow in importance. Embedding a commitment to society, community and the local environmental into your legal framework remains the most surefire way of demonstrating to the world around you – as well as your own staff – that you’re committed to being a force for good in the world.
To learn more about UL’S OSHA Solutions please, click here.