There's an up and coming trend in the business world: Certified B Corporations (also called B Corps). B Corps are for-profit companies certified by B Lab -- a nonprofit organization that inspires and encourages businesses to do good -- that commit to being beneficial to stakeholders (employees, communities and the environment) along with hitting their financial targets.
Becoming a B Corp is parallel to a farm becoming certified organic or a coffee company becoming fair trade certified. It shows that the company is following a set of standards and taking steps to be more socially and environmentally responsible.
B Corps certified brands like Etsy prove that shareholder friendly and stakeholder-centric qualities can coexist within a company. Many companies have followed suit in becoming a B Corp because of its surprising competitive advantages.
It Makes Your Company Better
Becoming a B Corp means your company is assessed in five areas of impact: Workers, community, environment, long term and core. To become a B Corp, your company must get a B Score of at least 80 out of 200 on your overall assessment, or your B Impact Assessment (BIA). Your assessment in these areas not only shows how well you're currently performing, but where you can improve your B Corp strategy. It provides you with the opportunity to become a better, more ethical company overall.
"Becoming a B Corp shifted the focus away from being the best company in our community to being the best for our community," explains Timothy Lara, CEO of Maui's only B Corp, Hawaiian Paddle Sports. "We strongly believe this is our kuleana (responsibility), to give back and strengthen our local community, which is why we became a Certified B Corp."
It's A Great Marketing Tactic
You don't become a B Corp just for the sake of becoming a B Corp. You become certified to show your stakeholders that you're dedicated to improving your brand. You're letting the world know that improving your community and the environment plays an integral role in your company's mission.
B Corps in the business to consumer (B2C) market benefit from certification because of its positive branding effects. According to a study by Nielsen, 66% of global consumers will pay more to support companies committed to making a social and environmental impact. Just like coffee drinkers feel better about drinking fairly traded coffee, so will your customers feel better about supporting a B Corp brand.
Becoming a B Corp will also make your company more attractive to potential investors. Leading investors like Kleiner Perkins, Catterton Partners, New Enterprise Associates and American Express have all invested in B Corps. Because of the rigorous BIA B Corps have to pass, and the community of support they have, B Corps are generally more resilient in times of financial hardship, which makes them more trustworthy as a company and a less risky investment. The BIA also serves as a benchmark against other "profit with purpose" companies, allowing investors to identify and address areas of weaknesses.
Because younger people search for jobs that make them feel a greater sense of purpose, B Corps tend to attract and keep young talent--something investors take into account. Investors also take into account the fact that customers are more likely to purchase from a brand whose values align with their own, giving B Corps the upper hand. B Corps also have an advantage because they are less likely to experience "mission drift," which is when a company's operations drift away from its mission and towards its financial goals.
You're Part of a Community
Becoming a B Corp means you're joining a community of like-minded individuals who share your passion for creating a more sustainable economy and environment. B Corps are a part of the "profit with purpose" movement that's making waves in the business landscape and disrupting traditional industries. It places you among younger people who are more vocal about their personal values and more inclined to embody those values in everything they do.
B Corps also have exclusive access to B Lab's proprietary resources. This includes the B Hive, a social network designed to encourage B Corps across the globe collaborate with one another. Companies that have support systems like this are more likely to overcome challenges and find success.
B Corps (and their surprising competitive advantages) will continue to get noticed the more they impact on the traditional business landscape. By committing to making the world we live in a better place, they're redefining what it means to be a sustainable company--and consumers love them for it.