In the last five years, the number of B Corp certified companies has tripled worldwide, fueled by a new generation of consumers who are looking to purchase goods and services from social impact brands.
According to industry experts, Millennials and Gen Z consumers are becoming more loyal to companies that go beyond talking about social good, but also act on it. Despite its recent rise, the B Corp movement has been around for a while as nonprofit organization B Lab was founded in 2006 to transform capitalism. Its founders — which included Bart Houlahan, Andrew Kassoy, and Jay Coen Gilbert — started tackling that lofty goal by changing the focus of for-profit companies.
Here’s what consumers need to know about the B Lab and how companies can become B Corp certified.
What is B Lab’s mission?
B Lab was created with the idea that a different kind of economy was not only possible, but it was necessary. Its founders wanted companies to shift from the traditional shareholder-driven model to a stakeholder-driven model where they meet high standards related to social and environmental performance, accountability, and transparency.
B Lab became known for certifying B Corporations by creating the standards, policies, tools, and programs that “shift the behavior, culture, and structural underpinnings of capitalism,” according to its website.
What is a B Corp certification?
A B Corp certification is a designation that a business is meeting high standards of performance, accountability, and transparency on factors like employee benefits and charitable giving, to supply chain practices and input materials.
What companies are eligible for B Corp certification?
Any established for-profit company can pursue certification. There is no maximum or minimum size.
Can a startup certify as B Corp?
Startups and smaller companies can pursue Pending B Corp status, which is designed to give companies time to prepare for the rigorous certification process.
How does a company get certified?
According to B Lab, a business must do the following in order to achieve certification:
- Demonstrate high social and environmental performance by completing the B Impact Assessment and scoring an 80 or above.
- Make a legal commitment by changing their corporate governance structure to be accountable to all stakeholders, not just shareholders. They also have to earn benefit corporation status if it’s available in their area.
- Allowing information about their performance measured against B Lab’s standards to be publicly available on their B Corp profile on B Lab’s website.
How long does it take to get certified?
For small- to medium-sized businesses, it could take about six to eight months. Large multinationals, companies with many related entities, or those working in industries that are controversial should expect a longer process.
What’s considered a controversial industry by B Lab?
Gig economy business models, marketing of breastmilk substitutes, offshore financial service providers, prison industry and labor, casino industry companies, debt collection agencies, fossil fuels and energy companies, pharmaceuticals, among many others. A list of “controversial” industries is regularly updated and can be found here.
Did companies jump at the idea of shifting to a stakeholder-driven model?
Not exactly. In a recent interview with the Globe, B Lab’s former CEO Ben Anderson explained how some companies resisted against the governance change, even if they were meeting other performance standards that would certify them as a B Corp company.
“Fifteen years ago, this [idea] was very foreign. People thought we were crazy,” said Anderson. “Investors did not like this. [They were] used to investing in [their] Delaware C-Corp... [They] knew what it was, how it worked, and all the legal precedent.”
How has that changed?
Anderson said it took time to show investors that managing a business to stakeholders creates a more resilient company. “We are even finding that some banks are looking at it as reducing the risk and giving better loan [and interest] rates,” he said.
How did the pandemic impact the number of companies applying to be B Corp certified?
During the pandemic from 2020 to 2021, B Lab received more than 6,000 applications for certification globally — which was a 38 percent increase compared to the 2018 to 2019 time frame, according to Sarah Silverman, B Lab’s director of marketing and communications.
“In the face of global climate change, the ongoing racial justice reckoning, and the still-unfolding impacts of the COVID-19 pandemic, more businesses than ever are turning to B Lab’s tools for solutions,” Silverman said.
As of early October 2022, there are more than 5,700 B Corps worldwide, Of those, more than 2,000 are based in the US and Canada alone.
How many B Corp certified companies are based in New England?
There are 167 B Corps in New England. Of those, two are based in Rhode Island, 14 are in New Hampshire, 15 are in Maine, 21 are in Connecticut, 40 are in Vermont, and 69 are based in Massachusetts. Some of the most popular consumer-facing companies that are B Corp certified include Allagash Brewing Company, Bigelow Tea, and Ben and Jerry’s.
Which companies in Rhode Island are B Corp certified?
- Comet Skateboards, a Bristol-based skateboard manufacturer committed to the use and development of eco-effective processes and materials
- Signal Works, a mission-driven Providence-based architecture firm.
Here are all the companies in New England that are B Corp certified.