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B Corporation, a New Way of Doing Business?

By Leslie Berliant

Jul 13, 2009

Sustainability seems to be the buzz word of 2009: sustainable homes, sustainable living, sustainable products, sustainable companies.

But when it comes to corporations, what does it mean to be sustainable?

Do companies have a responsibility to minimize environmental impacts and help solve the climate crisis? And how do you separate those companies that are truly sustainable from those that simply claim to be?

, a project of the 501(c) 3 non-profit B Labs, hopes to answer those questions.

While most companies are evaluated by the benchmarks of bottom-line profit and shareholder value, people have increasingly begun to look to business to help solve global problems while at the same time holding a general distrust of the business community.

Becoming a B Corp.-certified company adds additional levels of responsibility, says B Labs co-founder Bart Houlahan, who with his partners Jay Coen Gilbert and Andrew Kassov spent a year talking to people in the market place. Like his partners, Houlahan came from the business world, having helped run the $250 million footwear and apparel brand AND 1.

“As we spoke to people, it became clear that some infrastructure seemed to be missing for companies that wanted to be sustainable," Houlahan says.

"B Corp provides 3 things: standards to define a sustainable company, a legal framework that allows companies to scale and raise capital, and a brand that makes it easy to support and patronize good businesses.”

B Corporation is different than other certification processes, of which there are hundreds. For starters, sustainable practices have to be accepted into the DNA of the company.

“To become a B Corp, you have to change the legal framework of the company to include the interests of stakeholders and embed them in the business,” Houlahan says. “We actually make you change your articles of incorporation and expand the responsibilities of the company to include consideration of employees, community and environment.”

This is far beyond the typical responsibilities of a corporation to maximize profits.

Currently, there are more than 200 B Corporations, representing 31 industries and a billion-dollar marketplace, including Method, Seventh Generation, Shore Bank and Abacus Wealth Partners. That is a small percentage of the 43,000 companies that have taken the B Corporation 24-page survey.

Houlahan says that some of those companies have applied and been rejected and others have used it simply to benchmark their current standings in the various categories without applying. Others took the survey because they were asked to by potential investors, buyers or business partners. The survey data is confidential, but those companies that become B Corporations have their category scores posted online as part of their commitment to transparency.

Founding member King Arthur Flour, an employee-owned company in Vermont, had two reasons for becoming a B Corp. The first was to differentiate itself in the marketplace.

“The hope is that when consumers turn the bottom of the package over and see the B Corp logo, they will know what that is and that our company has met certain environmental and social metrics,” says Sarah McGinley-Smith, an employee-owner.

They also see it as a way to gauge how they are doing in terms of sustainability benchmarks, she says.

sesli sohbet

thank  you

Oh man it's great to see

Oh man it's great to see that sustainability is becoming a real force in the marketplace, and this just confirms it! Even if it is a lot of "marketing" when a company becomes a B-corp, it still results in a positive impact overall, go green business!
Jerry Harrison - Owner - .

I've very glad that I found

I've very glad that I found this article. I am making choices on a daily basis the support the environment via recycling, using less pesticides, less water, etc., and I also make it a point to purchase fresh and locally grown products whenever possible. I think that in order for real change to occur it's up to each of us to be aware that where we purchase and from whom we purchase makes a difference. I will be looking for this B Corporation Certification from now on and will urge my friends and family to do the same. The only way corporate America is going to change it's thinking is if we make them, and this is a great start!

Cindy Johannes - Favorite

There are no doubts now,

There are no doubts now, sustainability is the way of the future so we'd better start getting used with the idea. Whether it's about it, civil engineering or even consulting we always have ways to improve in a eco-friendly and responsible perspective.
Reggis,

oninework

The Center for Media Research has released a study by Vertical Response that shows just where many of these ‘Main Street’ players are going with their online dollars. The big winners: e-mail and social media. With only 3.8% of small business folks NOT planning on using e-mail marketing and with social media carrying the perception of being free (which they so rudely discover it is far from free) this should make some in the banner and search crowd a little wary.

New Business

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

Patricia

Nonsense

Given all the misrepresentations made here about a climate crisis that doesn't exist, I'm glad to be able to identify which corporations should be avoided.

BTW, we here in the Midwest invite Al Gore to visit so he can blow some of his hot global warming air on our record-setting cold temperatures.

Stupid guy or nice troll ?

I prefer thinking that you just want to launch a polemic :)
If not the I will pray for you very Hard :D

stupid

My god, are people still playing the denial game? Try reading some books and scholarly journals on climate change instead of regurgitating whatever you heard Rush babbling on the radio.

Hey "Nonsense"

How dies it feel to be a complete idiot?

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