In today's world, ethical businesses are not just focused on making profits; they are also concerned about their impact on society and the environment. This shift in mindset has given rise to a type of company known as a "B" Corporation, or a "B Corp" for short. But what exactly is a B Corp?
A B Corporation is a business that meets certain social and environmental standards, as verified by the nonprofit organization B Lab. These standards are based on a company's commitment to creating a positive impact on society and the environment, in addition to generating profits. In other words, B Corps aim to use business as a force for good.
It's important to note, however, that there is a difference between a B Corp and a benefit corporation. While both types of companies are committed to social and environmental goals, the main distinction lies in their legal structure. A benefit corporation is a legal entity that is required to consider the interests of not only its shareholders, but also its stakeholders: employees, customers, and the community. Benefit corporations have specific reporting requirements to their shareholders around their impact that is often communicated on a yearly basis through an impact report. B Corp is a certification that any type of business can obtain, regardless of its legal structure. Companies are able to become both a Benefit Corporation and a B Corp. For example, HigherRing is a certified B Corp and a California Benefit Corporation.
Benefits of Becoming a B Corp
It’s not easy to become a certified B Corp — it requires that you look at all aspects of your business and align them with best practices for social impact as well as responsible corporate governance. So why would a company decide to go through the rigor of B Corp certification? As we at HigherRing see it, there are 3 main benefits.
First: It provides a clear and credible way to demonstrate a company's commitment to social and environmental responsibility. The B Corp certification process requires companies to meet rigorous standards of transparency, accountability, and performance. B Corps are committed to reducing their ecological footprint and adopting sustainable practices. This can range from implementing energy-efficient measures in their operations to sourcing materials from environmentally responsible suppliers.
By prioritizing sustainability, B Corps help to mitigate climate change, conserve natural resources, and protect ecosystems. Their actions demonstrate that it is possible for businesses to thrive while minimizing harm to the planet. This sets an example for other companies and encourages the adoption of sustainable practices on a larger scale.
Second: Being a B Corp will attract like-minded customers and investors who prioritize sustainability and social impact. With growing consumer demand for ethical products and services, being a B Corp can give businesses a competitive edge in the market. We’ve found that our most effortless contracting happens with clients who align with the B Corp mission. They see the value in our offerings and our pricing because they too have built their operation around the triple bottom line (people, planet, profit).
This trend is not exclusive to the B Corp space. The average consumer is leaning heavily into the concept of “voting with your dollar.” According to a 2017 study, 1 in 2 people are belief-driven buyers: 67% made a first-time purchase of a brand because of its position on an important issue and 65% say they will not purchase from a brand because it was silent about an issue it had an obligation to address. For those who are aware of B Corps, the logo represents a quick and easy signal that the company meets a baseline standard for ethical operations.
Third: Becoming a B Corp may help businesses attract and retain top talent. Many employees nowadays seek meaningful work and want to be part of an organization that aligns with their values. By becoming a B Corp, companies are able to attract individuals who are passionate about making a difference and creating a positive work environment.
B Corps foster a sense of purpose and pride among employees. Knowing that their company is actively working towards social and environmental goals gives employees a sense of fulfillment and motivation. This may lead to higher levels of engagement, productivity, and overall job satisfaction. At HigherRing, we frequently hear applicants insist that they no longer want to work with a company that isn’t addressing the challenges of our time.
Part of meeting B Lab’s rigorous standards also means that B Corps prioritize the well-being and development of their workforce, going beyond traditional profit-driven models. They often offer comprehensive employee benefits, wellness programs, and professional development opportunities.
Benefits of the B2B Community
One unique aspect of the B Corp movement is the emphasis on collaboration and partnership amongst the community. In this case, B2B doesn’t just mean “Business to Business” but rather B Corp to B Corp. When B Corps contract with one another, they create a network of businesses that share similar goals. This collaboration helps foster a supportive ecosystem and amplifies our shared values.
By contracting with other B Corps, businesses can ensure that their supply chains and business relationships align with their ethical standards. This promotes transparency, accountability, and responsible business practices throughout the entire value chain. It also keeps dollars circulating in the spaces where it can do the most good.
Ready to Become a B Corp?
We think it’s fair to say that B Corps are revolutionizing the corporate world by redefining the purpose of business. They’re leading the way in integrating social and environmental responsibility into the core of their operations. By prioritizing people and the planet alongside profits, B Corps are setting a new standard for success in the business world.
As more businesses recognize the importance of social and environmental responsibility, the influence of B Corps will continue to grow. They are a powerful example of how businesses can be a force for good, inspiring others to follow suit. In a world facing numerous challenges, B Corps offer a glimmer of hope and a blueprint for a more sustainable and inclusive future.