Originally published at: What does the ‘B’ stand for and five other things you need to know about the B Corp movement - B Lab Australia & New Zealand
You see it on the supermarket shelves, on the runway and behind the scenes helping you build a brand, a life, business, a home to be proud of. You see it on the streets being rebels with a cause, and between the sheets, so we can all sleep easier knowing we are taking necessary steps to put people, planet and communities first. But what does this ‘B’ really mean?
The B Corp logo is the mark of a business that has been independently certified to go beyond business as usual to proactively meet high standards of social and environmental performance, accountability, and transparency.
It is a badge imbued with meaning and purpose; one that gets earned through countless hours of deliberate, concerted action for a better world. And with over 6,400 B Corps globally, it’s more visible than ever before. But more than a visible mark, it’s a movement of businesses making their mark on the world.
In honour of B Corp Month this March, here are five things you can know for sure when you see the ‘B’ out in the world.
1. This company exists to benefit everyone, not just shareholders
Let’s start at the beginning, and by beginning we mean: what the ‘B’ stands for. The B in B Corp stands for ‘Benefit for all’, in that Certified B Corporations (or B Corps) are businesses that have been certified by B Lab (that’s us!) to benefit all stakeholders. If you want to get a little fancy, this is known as ‘stakeholder governance’ and essentially means that a company distinctly prioritises all of those who have an interest or a ‘stake’ in its performance and outcomes. That means people (workers, customers, suppliers, investors, regulators), the community more broadly, and the environment are all on an equal footing with profit.
Operating a business with more than profit is a fundamental part of being a B Corp. B Corps are for-profit businesses; they exist to make money. It’s just that they don’t only exist to make money. And unlike traditional businesses, they don’t want to make money at someone else’s, or the planet’s, expense.
B Corps measure success and impact on what’s called a quadruple bottom line or the ‘four P’s’— expanding on the increasingly well-known ‘triple bottom line’ of people, planet, and profit, to include a fourth: purpose.
Driven by the desire to create an inclusive, equitable, and regenerative economy that benefits all, a B Corp’s purpose is enshrined in its company constitution, and informs every aspect of their business, from operations to governance. It’s a little thing called fiduciary responsibility (to act in the interests of others), and B Corps all have it.
2. This company has to get verified and certified every three years
If there’s one thing the world does not need more of it’s empty promises and hollow commitments. Instead, we need more companies that are actually doing the good things they say they’re doing, and who are prepared to be transparent about it.
B Corps gain certification from B Lab (hi, it’s us again!), a non-profit who leads the movement for a new kind of economy by working hard to change the behaviour, culture, and structural underpinnings of capitalism. One way B Lab does this is by assessing and verifying that a company is a force for good using our free tool called the B Impact Assessment (BIA).
The BIA is a standardised way to assess a company’s impact that can be tailored to each company depending on its size, industry and location. For example, a small agriculture business in Mexico will not receive the same assessment questions as a multinational make-up brand based in Melbourne or a solo accounting practice in Madrid.
Image: Capital Brewing
Earning the B Corp badge is the antithesis of ‘set and forget’. You can’t certify and then throw purpose out the window. You have to recertify every three years, or after a Change of Control or Initial Public Offering. That’s because ‘impact’ is neither a destination to be reached nor a box to be ticked, but a commitment to continuous improvement. This philosophy is fundamental to the B Corp movement and is about doing better business on purpose, and being held accountable for all of it.
3. Bs come in every shape and size
They’re spread on your toast. Washing your hair. Keeping your coffee warm. Doing your taxes. Feeding your furry friends. Teaching you permaculture. Designing your business strategy. Negotiating your home loan. Offering you counselling. Keeping your skin hydrated. Defending you in court. Brewing your favourite drop. Dressing you up. Helping you wind down. Keeping cyberspace safe. Building your brand. Decorating your home. Transforming the economy.
Spanning over 89 countries and 161 industries, B Corps come in every shape and size.
Some are publicly traded, others aren’t. They have to have been in business for at least a year, and the majority (96%) are small- to medium-sized businesses with a handful of multinationals too, who have several additional hoops to jump through. There are even sole traders who have managed to become certified and there’s no minimum size requirement. There’s room for big and small under the B umbrella.
There are some industries that are currently ineligible for certification, such as fossil fuel companies and companies that manage or operate prisons. And you can find out more about the movement’s positions on controversial issues and industries.
While B Corps may be as diverse as eco-friendly toilet paper and a superannuation fund, what they all have in common is that they are companies who are not just talking about having a positive impact, but that are making sure their impact is tangible, measurable and transparent.
4. They actively practise radical transparency
If you want to conduct your business behind closed doors, do as you please and not be held accountable for your actions, no matter how destructive they may be — then becoming a B Corp is probably not for you.
It’s often said that one of the hallmarks of the B Corp movement is its commitment to radical transparency. Radical in the sense that unethical, unjust and exploitative behaviour has been allowed to proliferate in racist, patriarchal capitalist systems for decades. Radical in the sense that businesses have, for too long, operated in the cover of darkness with little accountability to people, planet and communities. And radical in the belief that a key way to transform the economy as we know it is to bring business practice out of the shadows and into the light. So, what are some of the ways that B Corps practise transparency?
All Certified B Corporations must share their B Impact Assessment overall scores and category scores on a public profile and directory on B Lab Global’s website. They must publish an annual report that outlines their social and environmental impact and make it available to the public, sharing information about things like supply chains, carbon footprints and various aspects of financial reporting such as executive compensation. Public companies (and their subsidiaries) also have to meet additional transparency requirements.
By emphasising openness, honesty, and accountability in all aspects of a company’s operations, B Corps are creating a more trust-driven, accountable and responsible business culture that is a far cry from the type of business as usual we’ve come to expect.
5. They are committed to being a force for good — no ifs, buts or maybes
With a total revenue of more than USD 150 billion (AUD 220 billion, NZD 240 billion), B Corps are living proof that doing good is good for business. The latest stats also show that:
- B Corps are 4.5 times more likely than ordinary businesses to use 100% renewable energy.
- B Corps are 7.3 times more likely to be carbon-neutral.
- B Corps are 4 times more likely to hire managers from local communities, and 2.4 times more likely to donate more than 1% of their revenue (not profit) to charities.
- Over 25% of B Corps are women-owned, with companies twice as likely to have majority women management.
Of course, there’s still plenty of work to be done, but it’s more than a step in the right direction towards a more equitable, regenerative economy.
From environmental sustainability to social justice and beyond, any time you see the B Corp logo, remember that this is a company designed to benefit all.
A company that cares about far more than just the bottom line. A company that voluntarily invites greater accountability, transparency and scrutiny, in order to lead the change that is needed.
A B Corp is a company that prioritises people, planet and communities, beyond what’s expected or has been done in the past. A company that has positive impact woven into the very fabric of its being. And a company that is committed to working alongside others to transform our economic system and work together to address some of the world’s most complex challenges.
B Corps are businesses that go beyond a simple mark to truly make their mark on the world.
March is B Corp Month, a campaign to present the world with the community of impactful businesses who go beyond the harmful status quo and take action to transform our economic system. Find out how B Corps are going beyond this month and every month: bcorpmonth.com