B Corporations show how making money and doing good can go hand in hand.
By Amy Gwiazdowski
To say the marketplace is evolving borders on cliché, but a scan of your newsfeed can confirm that statement. The traditional business landscape is morphing. Gone is the once commonplace employer-employee relationship. Enter a new paradigm with a focus on social good. A new breed of company is on a mission to find the place where doing business also means doing good for employees, the community, and the company.
Finding the intersection where making money and doing good are not at odds can seem daunting. But these purpose-driven companies are not going it alone. They are part of a movement and a community of like-minded businesses called B Corporations. They are out to prove that it’s possible to make money while doing good.
So, what is a B Corp? It is a company that has been certified by B Labs — a nonprofit certifying organization —that demonstrates a commitment to corporate social responsibility (CSR). The certification validates the work a company is doing to meet a broad set of values that include environmental and social concerns. This commitment to sustainability is also an opportunity to provide needed community services that can appeal to both consumers and employees.
Does being a B Corp increase a company’s trustworthiness, though? A 2015 Nielsen study shows that many consumers buy from companies that demonstrate a dedication to social good and that consumers are willing to pay more to support them. Consumers don’t always blindly accept that a company adheres to standards or that its efforts are genuine, though. This means that these companies have a lot to prove when it comes to sustainability, community engagement, and environmental goals. In these cases, companies can count on an impartial certification to help win over discerning consumers looking for more from the companies they interact with. B Corps’ commitment to social and environmental goals is monitored and reported on during their life cycles. These companies are putting words into action.
According to B Labs, there are more than 2,400 B Corps in over 50 countries and in over 130 industries. While that number may seem small, consider that these companies self-report and pay for certification. These companies are taking a clear step to declare themselves as standouts. This “unconventional identity … helps individuals clearly distinguish between traditional firms and those that are committed to a broader set of stakeholder values” (Kim, Karlesky, Myers, & Schifeling, 2016).
This intersection of values may be where B Corp certification pays off (Stammer, 2016). By publicly standing by the belief that company and community values can coexist alongside shareholder values, B Corps hope to attract consumers who are willing to support companies outside the norm.
Employee engagement is another driver for B Corps. In today’s shifting economy, millennials shy away from the typical business environment and want a career that imparts meaning and allows for greater flexibility. An employee-centric company looking to engage employees with its mission and bring that same commitment to the marketplace attracts new talent.
This community of like-minded companies is creating a path to social good. While B Corps may not yet prove to be more economically resilient or have access to better capital, these companies are making a difference. Showing a strong commitment to CSR benefits more than just the companies now. B Corps are doing all they can to showcase their value to others besides shareholders. They’re making investments in their communities, their environment, and their talent. This is a relatively new outgrowth, and there is still much to prove, but one thing is clear: The B Corp movement has already shaken up a staid business community for the better.