The B Corp Movement is focused on building a better world through business. In today's hyper-capitalistic society, the concept of a corporation that also gives back to its community is often seen as out of place. As most companies are driven by making money, social enterprises that utilize business strategies to change the world for good are gaining in popularity. Businesses that identify as a 'B Corp' follow strict guidelines that help them align their values to match their operations.
What is a B Corp?
A B Corp is a type of company that uses business as a force for good. The idea was founded in the U.S. by a group of entrepreneurs who wanted to create a new kind of corporation with the mission to do well and do good. It's not just an idea — it's a legal designation, too.
A B Corp certification provides third-party verification that a company meets rigorous standards of social and environmental performance, accountability, and transparency set by the non-profit B Lab. Companies must apply for certification, but once they have it, they have access to resources like toolkits and assistance with making sure their business practices align with their values.
B Corp companies are held accountable for producing excellent products or services while also doing good in their communities and around the world. They also have an obligation to be transparent about what they do (and won't) do for people and the planet.
What's the Difference Netween a 'B Corp' and a Nonprofit?
A B corporation is a for-profit business that also meets strict social and environmental standards set by the nonprofit B Lab. The B Corp certification helps companies differentiate themselves from competitors and attract customers who care about such things as employee benefits, community involvement, and environmental responsibility.
Nonprofits, meanwhile, are typically not allowed to make a profit for their owners or shareholders, although donations can be accepted from both individuals and corporations. Nonprofits must file annual reports with the IRS showing how much money they receive from each type of donor. Nonprofits are not required to pay taxes on their earnings, and they don't need to pay taxes on gifts and donations made to them. This allows them to spend more of their money on their mission rather than on overhead costs.
B Corps, on the other hand, must pay taxes like any other company. But because they have a social mission at heart, they can use some of their profits to support causes that matter to them. B Corps also gives back by providing goods or services at cost or below market value or donating time and expertise to non-profit organizations.
What are the Requirements to be 'Certified B Corp'?
To be certified as a B Corp, you must:
Be a for-profit company that operates in line with the highest standards of social and environmental performance, accountability, and transparency. Have been operating for at least three years or have been incorporated for three years. Be able to communicate your mission, vision, and values clearly to stakeholders. Have a strong commitment to addressing issues such as pollution, deforestation, and climate change. Maintain high standards when it comes to environmental sustainability.
How do Companies Become B Corps?
Companies can become B Corps by joining a B Corp community. There are more than 4,000 B Corps in more than 70 countries around the world. Companies can choose to join a local or global B Corp community depending on their needs and preferences. To join a local B Corp community, companies must meet the eligibility requirements of that community and pay a fee that varies based on the size of the company. Some communities have an application process and require additional paperwork to be submitted with the application fee. Other communities do not have an application process or additional paperwork requirements beyond paying the membership fee.
Why are Companies Becoming B Corps?
Here are some of the reasons why companies are choosing this path:
Accountability: B Corps are required to submit an annual report on how they're doing on social and environmental performance, which an independent third party reviews. That means consumers can see how their purchases affect the world around them.
Environmental Benefits: The B Corporation label means companies have committed to environmental sustainability, treating workers well, and ensuring they're not contributing to social inequality. These are all things that are good for business as well as society.
Community Benefits: In addition to providing products and services that make the world a better place, B Corps are committed to giving back to the communities they serve. The combination of profit and purpose is attractive for companies that want to be socially responsible. Many companies use their profits or investments to make an impact in the communities where they operate by supporting local nonprofits or donating time and money toward community development initiatives.
Employee Benefits: B Corps aim to attract and retain the best talent by offering benefits such as paid parental leave and flexible working hours. They also positively impact employee wellbeing by encouraging staff engagement with charitable causes through volunteering programs or matching gift schemes.