What is a B Corporation?
Understanding B Corporations
For those unfamiliar with the term, a B Corporation, or Benefit Corporation, is a type of business that balances purpose and profit. They are legally required to consider the impact of their decisions not only on their shareholders, but also on their workers, customers, community, and the environment. This is a new kind of business that works towards reducing inequality, lowering levels of poverty, a healthier environment, stronger communities, and the creation of more high quality jobs with dignity and purpose.
How B Corporations Differ From Traditional Corporations
Unlike traditional corporations, B Corporations are obligated to consider the impact of their decisions on all stakeholders, not just shareholders. This means that a B Corporation must do what’s best for the company, its employees, the community, and the environment, even if it means making less profit. In a traditional corporation, the company’s primary goal is to make money for its shareholders, even if it means harming the environment or its employees.
The Certification Process
Becoming a B Corporation isn’t just about declaring your company as one. There is a certification process that needs to be followed. This process is overseen by the non-profit B Lab. To be certified as a B Corporation, a company must achieve a minimum verified score on the B Impact Assessment—a rigorous assessment of a company’s impact on its workers, customers, community, and environment—and make their B Impact Report transparent on bcorporation.net. Moreover, the company needs to amend its legal governing documents to require its board of directors to balance profit and purpose.
Why Companies Choose to Become B Corporations
Many companies choose to become B Corporations because they believe in doing business in a way that benefits everyone. These companies want to be part of a movement of people using business as a force for good. They believe that businesses have a responsibility to give back to the community and to help solve social and environmental problems.
Examples of B Corporations
There are over 3,500 certified B Corporations in more than 70 countries around the world, across 150 industries. Some well-known B Corporations include Patagonia, Ben & Jerry’s, and Eileen Fisher. These companies are leading the way in showing that businesses can be both profitable and beneficial to society.
The Impact of B Corporations
B Corporations are redefining what success in business means. It’s not just about making as much money as possible. It’s about making a positive impact on society and the environment. B Corporations are showing that businesses can be a force for good, and that they can make a difference in the world.
Challenges for B Corporations
While B Corporations are making a positive impact, they also face challenges. Balancing profit and purpose is not easy. It requires a commitment to transparency and accountability. It also requires a willingness to make tough decisions that may not always be popular with shareholders. But despite these challenges, more and more companies are choosing to become B Corporations, because they believe it’s the right thing to do.