What Is a B Corp?
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We’re told from the time we can walk to play by the rules.
Of course we bend those rules along the way but what about when the rules themselves are already a bit broken?
We doubt we need to rehash the past two years for you to know what we’re talking about. Not to go all doom and gloom here but humanity’s past mistakes are starting to come back and haunt us in a big way.
Good thing the world is full of rule breakers.
As a business owner you’re probably already a bit of a rule breaker. You left the comfort of a job to take the hard road and start a business of your own. Which means along with a rebellious streak you also have courage.
Good. Because what we’re about to talk about will require courage. We’re about to ask you to change up the standard “business-as-usual” approach of doing things and embrace a different way of how business is done.
Because we 100% believe we’ve discovered the corporate breakthrough this world needs in B Corp.
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// What is B Corp?
B Corp is a certification and global movement of businesses that make a pledge to commit to the triple bottom line of planet, people & profit.
It’s about using business as a force for good to accelerate a global culture shift in what capitalism looks like. It’s a movement that redefines what business success looks like while building a more inclusive and sustainable economy.
In order to obtain a B Corp Certification, a business must meet the highest standards of verified social and environmental performance, public transparency, and legal accountability.
In case you haven’t noticed, traditional corporate structures and capitalism aren’t exactly having the best moment. Nor is that expected to change unless a drastic shift takes place. Which begs the question, how do we protect ourselves from a system of capitalism while deriving its benefits?
The solution: B Corp and the B Economy.
Businesses have the opportunity to rewrite the rules by holding themselves to a higher standard. B Corp advocates for principles such as fair worker’s compensation, a livable wage, products and services that do minimal harm to the environment, transparency in governance, accountability for corruption and much more.
B Corp advocates for what business should do in the first place: solving problems, not causing them.
Why you should become a B Corp
As our country becomes increasingly polarized, we’re seeing people flock to partisan brands with a higher purpose in favor of their corporate counterparts — from brands taking action on top environmental issues to those holding themselves to a higher standard of social responsibility for workers.
This is even more apparent among Millennials and Generation Z.
Generation Z especially views purchasing as an extension of their identity and a huge part of that identity is a pride in ethical standards.
Gen Z has grown up in a bombardment of technology which has gifted them with the ability to look beyond marketing gimmicks. This generation is well educated on the backgrounds of brands, their values and the actions that back them.
70% of Gen Zers purchase the majority of their products from brands they consider ethical with 80% refusing to buy from companies involved in scandals. These kids collect receipts and are willing to put in the market research to unearth the history of a brand prior to making a purchase.
"They’re looking beyond tangible products and actually trying to understand what is it that makes the company tick. What’s its mission? What’s its purpose? And what is it actually trying to build for us as a society?”
Credibility
People want credible action, not just good marketing!
We’ve all seen instances of companies bragging that they’re “doing their part for humanity” only to find they put more money behind marketing that message rather than living it. And with over 213 million businesses worldwide, how will ensure yours stands out from those just paying lip service?
B Corp Certification signals to customers, clients, partners, investors and the community that your company puts action behind your words.
Strengthened business operations
B Corp businesses are strong businesses.
Let’s consider the facts:
Enough said.
A Protected Mission
Let’s take a quick look at a case study.
In 2017, Whole Foods was acquired by Amazon. Prior to the acquisition, Whole Foods was perceived as a high-quality, organic grocery store known for its unique health food options. While Amazon has helped make it more accessible to customers, it came at a price. Namely at the expense of its workers who report losses in wages, benefits and overall morale.
Here’s what John Mackey, Whole Foods CEO since 2010, has to say about the merger, “They wanted to take over the company, take over the board and force us into a sale…and boy oh boy oh boy did I wish we were a B Corp.
Attract Quality Talent, Partners, Tech & Expertise
B Corp has a distinct ability to attract high-quality and mission-aligned people.
A strong mission acts as a rallying cry. It unites everyone around a single goal despite differences in age, race, identity, upbringing or way they take their coffee. People want to feel part of something and if you can evoke that passion from people you’ll see rates in attraction, engagement and satisfaction increase.
Clear Benchmarking Goals
You can’t scale what you can’t measure.
B Corp Certification helps companies set benchmarks to measure everything from environmental impact and customer satisfaction to worker engagement and all-around company performance.
A huge part of the certification process includes tracking and reporting company data points. Luckily, B Corps tend to be highly collaborative companies that share resources, tools and best practices. Even if you don’t have a formal system for measurement right now, you will quickly learn what to track and how. These numbers then become valuable information to use in decision making and testify as evidence to company growth.
Who Can Become a B Corp
Any for-profit organization can become a B Corp.
Whether it’s a company of one or thousands, there is no size minimum or maximum required to become a B Corp. Nor is it exclusive to specific industries.
There are a few exceptions though.
A handful of industries contrast B Corp’s values by nature or have a strong history of controversy. Think the fossil fuel industry, big pharma, the prison industry and cannabis-related products. While being in one of these industries won’t technically keep a company from becoming a B Corp, it does mean they will have to jump through a few more hoops. Controversial industries will receive more scrutiny and require a higher level of transparency.
What about startups and new companies?
Companies are required to have a full year of operations under their belt before they can certify. So if you’re a new company or a startup, you’ll be going for Pending B Corp status instead.
While this is NOT B Corp Certification, it still allows use of the Pending B Corp logo and signals to potential partners, clients and customers that your company values social and environmental performance. It grants companies time to prepare for B Corp Certification and build the principals of B Corp into business operations from the get-go.
The Legal Stuff
Time to dive into the legalities of B Corp.
Since the 1970s, most for-profit companies have been governed by a notion called shareholder primacy meaning profit and the interest of shareholders is first and foremost when making business decisions — even if it comes at the expense of others or the environment.
We’ve all done it. We’ve been taught to calculate that cost of producing a good or service — production costs, shipping, cost of labor, etc. — but haven’t been taught to take into account less traditional variables such as CO2 emissions or to pay workers a living wage over minimum wage. Rather than incur that expense ourselves we shirk the cost of business to environments, communities, our own workers and even customers. It’s easy to see how this form of governance can become an all-consuming monster.
B Corp on the other hand follows stakeholder governance.
As a B Corp, you are legally obligated to consider your company’s impact on all stakeholders — workers, environment, community, customers, suppliers — not just company shareholders.
It’s not enough to just say your company is committed to social and environmental sustainability. You have to back it up legally.
What does this look like in practice?
It can mean foregoing business with an immediately profitable, but environmentally taxing overseas supplier for one with a longer-term payout but local and sustainable option. Or it could look as simple as choosing a recycled material for your business card over the fancy UV-glossed, plastic counterpart.
Another benefit to the legal structure of B Corp is that it puts more power in the hands of you — the business owner.
It allows you to protect your company’s mission, vision and values when making decisions or in the event of a potential sale or liquidation.
B Corp’s legal requirements are specific to company type, size and region. Luckily, B Lab made a nifty tool to spell out exactly what your obligation is. For most small businesses, this means little more than including a byline in your Articles of Incorporation.
To understand your company’s specific legal requirements, go here.
Why We Decided to Become a B Corp
Prior to our B Corp Certification, Citizen Yard was actually a digital marketing & branding studio. To make a really long story short, the decision came after an internal marketing overhaul.
Prior to the pandemic, our company’s whole function was to create online spaces for businesses. The 2020 pandemic happens and suddenly every company needs to be online — which meant we were busier than we had ever been. The uptick meant we could offer our marketing services pro bono to those struggling to make it through the global crisis. And we’re proud to say that every company we worked with survived.
Damn, did it feel good. Which left us wondering, can this be our company’s new norm?
We knew we wanted to work with like-minded business owners who carefully considered the impact of their business decisions and decided to take an “if you build it they will come” approach.
We began writing about evolving views of capitalism and consumer behavior. We became upfront about using and advocating for sustainable business practices. All the while we didn’t realize we were laying the groundwork for joining the B Corp movement.
It was while researching for an article one day that we stumbled upon B Corp. While we were aware of the certification, it always seemed like a cert exclusively for large companies. Yet the more we researched the B Corp movement, the more we saw small brands and even solopreneurs receiving their certification.
It didn’t take long before we were fully bought into the B Corp movement. Not long after that, we decided to not only go for our own B Corp Certification but to completely reposition our company’s offerings around furthering the movement.
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// The History of B Corp
B Corps are a relatively new business phenomenon. The first cohort of B Corp businesses only just came about in 2007.
The Who, Why & How Of It
In 2006, three friends — Andrew Kassoy, Jay Coen Gilbert, Bart Houlahan — left their corporate careers to dedicate their time to the creation of B Lab, the nonprofit company that oversees the B Corp Certification process. The goal: to make it easier for mission-driven companies to protect and refine their positive impact.
These three weren’t strangers. In the 1990s, Kassoy, Gilbert and Houlahan had been involved in the founding of 90’s virally successful street apparel company, AND1. At the height of their game, they had not only built a successful company but made it a priority to foster a company culture that prioritized more than just building profit.
AND1 was ahead of its time. They developed an engaging and employee centric work environment with childcare and yoga classes. They were heavily involved in the local community by donating at least 5% of their annual profits to charity. They developed an ethos and vowed to become a leader in what they called “compassionate business practices.” These compassionate business practices weren’t reserved for HQ employees but extended to their factories overseas, even performing audits twice a year ensuring overseas workers worked in fair conditions.
Then came competitive pressure from companies like Nike and Adidas, as well as pressure from investors — and everything changed.
To make a long story short, a new CEO took charge and the company was sold. Everything the trio had worked for in regards to quality pay for its workers, commitment to the community and enforcing the mission was disintegrated in the name of profits. There was nothing at the leadership or legal level that could protect the company’s values from the cold hard, black and white decision-making of modern capitalism.
When all was said and done, the three came together to discuss what had just happened. They agreed on two things:
- Business has the potential to be a tremendous force for good
- The governing powers that be as they are hamper that force
They concluded that businesses are powerful entities for change and government alone can’t be relied on for solving the world’s problems.
There had to be a way businesses could scale and raise capital, influence diplomacy and still maintain mission, shareholder primacy be damned.
They put their heads together and came up with three personal amendments to the current way economic markets function. They decided the following needed to happen:
- A set of standards that give consumers, investors and policy makers the information to differentiate between good companies and good marketing
- A legal framework that permits companies to adopt sustainability and social economic enterprise as core purposes and responsibilities of the business
- A collective voice that defines what it means to conduct good business
These three principals became the foundational blocks of B Corp and directly led to the formation of the movement, officially formed in 2006. After a tour of rubbing shoulders, kissing babies and pitching their idea, the first 82 B Corps were certified in May of 2007.
Since then, B Corp has become a global movement with internal team operations and leadership in every corner of the world. B Lab — the nonprofit organization behind B Corp — was recently recognized as one of Fast Company’s Most Innovative Companies.
Infamous B Corps
The number of companies becoming B Corps grows by the day — literally.
{By our count, we see ~7 companies achieving certification daily (though the line is much longer)}
Some of the world’s most recognizable companies have taken the pledge to devote their business models to social and environmental performance.
Let’s meet a few.
— The Poster Children
Two of the most prolific and largely recognized B Corps are Patagonia and Ben & Jerry’s.
Their activism and public discourse over the years have made them the poster children of the B Corp world. While not every certified company needs to be as confrontational as these two, their boldness has made them stand out and brought attention to the movement.
— The Old Guard
These are the OG’s of B Corp Certification. Certified in the first cohort of businesses, Seventh Generation and Uncommon Goods have embodied the movement’s essence for over a decade.
— Fashion
B Corp isn’t just for the outdoorsy or granola types. Its made its debut on runways as well. Sezane, Nisolo, Warby Parker, Eileen Fisher and Bondi Born are all Certified B Corps. Just last year, French brand Chloé became the first high fashion brand to achieve certification.
— B2B
Companies targeting other businesses can get in on the B Corp hype too. From accountants to marketers, B2B B Corps are the companies working behind the scenes to create business impact. Companies like Oliver Russell, Bullhorn and Conscious Brands.
— Small Brands & Solopreneurs
B Corp isn’t exclusive to big brands. Small brands and solopreneurs are recognizing the power of putting in the work to drive change at every level. Compass Studio, Creative Chi, Yala Jewelry and Pixel Parlor are all small or solo brands making a big difference.
The Future of B Corp
The future of B Corp is looking bright.
For being such a young movement B Corp has made monumental moves in a short span of time. And the pandemic has only stimulated that growth. B Lab has seen a sharp rise in companies interested in becoming B Corps as well as recognition of the B Corp logo. This growth is only expected to continue.
B Lab along with its band of businesses vows to continue until B Corp is no longer the exception but the norm.
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// How to Get Started as a B Corp
Now that you’ve been introduced to B Corps, let’s talk about how to get started on your own B Corp journey.
The B Impact Assessment
The B Impact Assessment (BIA) is an approx. 200-question evaluation that measures a company’s impact in five key areas: governance, workers, environment, community and customers.
GOVERNANCE: evaluates a company’s mission, impact engagement, ethics and transparency. Answers whether or not a company takes stakeholders into consideration in decision making. Governance also includes a company’s ability to protect its mission and established values in the event of acquisition or a transfer in ownership.
WORKERS: evaluates how a company treats its employees. Answers the level to which a company creates financial security, health & safety, career development, employee satisfaction and overall wellness.
ENVIRONMENT: evaluates a company’s impact on the environment, namely practices that pertain to climate, water, land, air and biodiversity. This includes a company’s direct environmental impact as well as its operations, supply chain and distribution channels.
COMMUNITY: evaluates the relationship a company has with the communities it serves, operates in, hires and sources from. This includes demographic communities and, as the world becomes more digitized, online communities as well.
CUSTOMERS: evaluates a company’s customer experience and stewardship related to the quality of its products, services, marketing, policies and data protection. Emphasis is further placed upon a company’s ability to listen to and learn from its customers.
Companies are required to complete the BIA with a score of 80 to achieve certification.
As of January 2022, there are over 4,000 Certified B Corps worldwide. These companies represent over 150 industries in more than 70 countries ranging from retail to web design. Which just goes to show that really anyone can join this movement.
Not quite ready to commit to B Corp Certification just yet? Not a problem. The B Impact Assessment is more than an assessment, it’s also a tool.
Over 100,000 businesses use the BIA not as an assessment, but rather as a free tool to measure their impact. In fact, that’s how we got started. Originally, the idea was just to use the BIA as a tool to measure our company’s mission, but as we kept going we got addicted to using it to better our business and saw it through to full certification.
Overview of the Certification Process
Becoming a Certified B Corp is a lengthy process with a number of complicated steps.
Which is why we make it easy for you with the B Corp Roadmap.
We created a Trello board breaking down each step to provide a visual overview of the process.
The certification process differs slightly dependent on company size, but for the most part follows the same steps. The process stages are as follows:
- Meet Basic B Corp Requirements
- Sign Up for the B Impact Assessment
- Complete the B Impact Assessment
- Submit the Evaluation
- Evaluation Queue
- Evaluation
- Verification Queue
- Verification
- Post Verification
- Celebrate & Share
Get your copy of the B Corp Roadmap for a detailed guide into each stage of the process.
Once you become a B Corp the real work begins. B Corp Certification lasts three years before a business must recertify. During this time, B Corps have access to the B Hive, the internal B Corp community platform reserved just for Certified B Corps. This is where Certified B Corps go to connect, collaborate, share knowledge and discounts too. Most B Corps aspire to continue improving their impact and the B Hive has the tools to help them do it.
BIA Quick Scan
Now that you’re more familiar with the process, let’s take our first actionable step into the impact industry.
You may be thinking, “200 is a lot of questions. How am I quick to tackle this monster of an assessment, much less hit the magic number of 80?”
We always recommend the same approach every time: start with a B Impact Assessment quick scan.
The goal of a BIA quick scan is to work through the B Impact Assessment as fast as you can and get acquainted with the BIA. It establishes a baseline.
Set a timer for 60 minutes and try to work through every question on the BIA. We’re not worried about accuracy just yet and chances are some of this material will be gibberish to you. That’s okay! Answer each question the best you can with a knee jerk reaction and simply get familiar with the material.
This quick scan will set the baseline to:
- Acquaint you with the B Impact Assessment
- Take away those first time nerves or procrastination
- Keep you motivated
- Begin measuring impact
- Identify opportunities for improvement
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// Wrap Up | Your B Corp Journey Next Steps
Ready to get started? Here’s your recap of the B Corp Certification process:
STEP 1: Sign up for the B Impact Assessment
STEP 2: Use our tools to help you in work impact & mission into your business
STEP 3: Complete the BIA Quick Scan
In the end, becoming a B Corp isn’t about achieving ethical perfection.
It’s about actively trying to do better with each and every business decision.
Just the consideration of taking your business down this path is a step toward something better and working collaboratively toward a brighter future.
Interested in learning more about B Corps?
These are some of the tools we used to bolster our own knowledge about B Corps.
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Key Takeaway
Becoming a B Corp brings purpose and mission to your business. Any for profit company can become a B Corp. Most companies who have pursued B Corp report it has directly improved their brand marketing and business practices tenfold.
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