The business community has seen a shift in recent years. Many companies are using business as a tool for social and environmental change. Businesses leverage their work to build healthy, equitable, and regenerative communities. This trend is reflected in several recent movements and certifications like the B Corporation.

The basic definition of a B Corporation or certified B Corp is a for-profit company that uses its business as a force for social and environmental good. For example, an ice cream company that uses its flavors to create awareness of critical social issues. Or a toilet paper company that donates 50 percent of their profits towards clean water and toilets for everyone. Every B Corp company considers the impact of their business decisions on not just shareholder value but all stakeholders across the value chain.

Each certified B Corp has completed a multi-question, robust assessment of their social and environmental performance as an organization and supplied documentation to validate their answers on the assessment. The assessment is then reviewed for high levels of accountability and transparency by the oversight organization, B Lab. Once the organization passes the review, or sometimes during the process, companies also amend their governance documents.

First, an organization must complete the B Impact Assessment or BIA. The BIA is an entirely free online benchmarking and measurement framework for non-financial data metrics used by over 50,000 companies worldwide. It looks at five different areas of a company: governance, workers, community, environment, and customers. There is also a sixth company disclosure area that identifies any potentially sensitive industries, practices, fines, or sanctions of a company that are not explicitly called out in the rest of the assessment.

After completing the B Impact Assessment, companies undergo a multi-step verification process to review all the documentation provided and answers given. Each assessment must earn a minimum of 80 points for certification.

In addition, B Lab performs a background check of the organization. Background checks include reviewing public records, news sources, and search engines for company names, brands, executives/founders, and other relevant topics.

Once a business passes certification, B Lab creates a public page sharing the B Impact Report summary of a company’s scores on the B Impact Assessment by category. There is also an annual fee all certified B Corps must pay to B Lab to support the organization. It is based on a sliding scale by revenue.

There are several benefits to becoming a certified B Corporation. Here are the top five benefits that are most often touted.

Choosing to be a B Corp allows you to pursue broader management goals. Running a traditional for-profit business, your investors expect you to focus solely on shareholder value. That can make you a servant to your profitability. With a B Corp, your investors, employees, and customers know from the get-go that your goals are much larger than simply turning a profit. This gives you greater latitude to manage your business as you desire, focusing on producing the most meaningful results for your business’s mission.

Financial metrics are great to measure but only tell a short-term story about the profitability of an organization. Non-financial metrics tell a much richer account of a business’s overall health and grants you a much longer view of the broad range of risks facing an organization. Economists and business experts now see that the top five risks within any business are Environmental, Social, and Governance (ESG) concerns.

Certification can help you identify and mitigate these risks. Frameworks, like B Corp certification, allow a business owner to benchmark and measure a whole host of non-financial metrics that have been typically hard to measure in the past.

B Corps are attracting top talent, especially among employees who seek purpose in their careers. Certification helps promote and validate an employee-centric culture, which engages great candidates because of the company’s reputation as a great place to work. Instead of staffing your business with individuals looking for a paycheck, you can staff your business with employees who are engaged in what you’re doing. Companies with engaged workforces are more profitable and twice as likely to succeed as businesses with less-engaged workforces.

When you become a B Corp, you can’t just claim to be sustainable or socially conscious — you must prove it. The certification process requires you to demonstrate through rigorous documentation how you create tangible benefits for people and the environment. This means consumers and other businesses can trust that companies with B Corp status aren’t just claiming to benefit their community. They’re walking the walk.

Consumers are increasingly interested in buying products and services from companies that make societal and environmental commitments. A 2019 Deloitte survey revealed that more than 80 percent of consumers would be willing to pay more if a brand raised its prices to become more environmentally and socially responsible or pay higher wages to its employees. The demand by conscious consumers is already having an economic impact on the sales of consumer goods, as products with an element of sustainability have been.

When writing this article, there are 4,762 companies in 77 countries and 155 different industries, all operating with one unifying goal of using business as a force for good. Many companies are consumer brands that most folks use daily, like Ben & Jerry’s Ice Cream, Tom’s Toothpaste, Patagonia, Method Soap, and Athleta. Professional service firms like Sensiba, Wendel Rosen Law Firm, or Beneficial State Bank are also B Corps. There is more than likely a B Corp for anything you need. I highly recommend consulting the B Corp Directory anytime you want to purchase.

For a list of the currently certified companies and their B Impact Report, visit BCorporation.net and click the “Find a B Corp link” at the top of the page.

Contact our team of B Corp consultants to learn more about certification.

Updated on: August 28, 2023

A company’s ability to positively impact social and environmental change has become an increasingly relevant consideration for businesses. Environmental, social, and governance (ESG) factors cover many issues that touch on everything from company culture and employee compensation to climate impact and sourcing standards. Sustainability reporting allows businesses to provide insight into the true impact of a business’s efforts on stakeholders.

While traditionally absent from financial reporting, larger companies recognize ESG’s impact on investor relations, market behavior, and financial success. Almost all Fortune Global 500 companies use a recognized framework to report on sustainability. Nearly 80% of the world’s largest companies use Global Reporting Initiative (GRI) standards, which provide transparency to consumers, investors, and other stakeholders.

While public companies have been reporting on sustainability for decades, it has been historically less accessible to smaller businesses lacking the resources to invest in analysis and reporting initiatives. Luckily, B Lab has a free and widely accessible impact assessment that serves as a framework relevant to both large and small businesses.

While climate change was a catalyst for increased ESG reporting, social and governance factors are becoming increasingly relevant. ESG considerations can influence change faster than governments or nonprofits, and younger generations view their investment dollars as an extension of personal values. In 2018, US SIF Foundation reported that investors held $11.6 trillion in assets associated with ESG criteria, up from $8.1 trillion in 2016. A TD Ameritrade survey revealed that 19% of ESG investors consider human rights the most important factor in their decision-making.

Non-financial performance is often a leading indicator of a company’s long-term success. ESG metrics help businesses recognize when strategies need an overhaul. ESG assessments help identify what practices may be associated with future risk, even if currently working. For example, does the business outsource manufacturing to countries subject to changes in tariffs or inflating labor costs? Does management’s hiring tactics support employee retention? Traditional financial reporting fails to address many fundamentals.

Today’s workforce holds their employers to a much higher standard than decades past, with working conditions, employee morale, health initiatives, and overall culture of the utmost importance. A sustainability report addresses these issues and provides insight into a company’s relative compensation, retention rates, and diversity. This is not only important for attracting customers, it’s imperative for recruiting and maintaining talent.

According to the Harvard Business Review and a decade long study entitled “The Happiness Advantage,” employee happiness raises sales by 37%, productivity by 31% and accuracy on tasks by 19%. The conclusion? Employee happiness is good for financial success.

Harvard’s ESG Global Survey showed that more than a quarter of investors say ESG is central to their investment approach with an emphasis on “acceptance” and “compliance”. Additionally, the Business of Sustainability Index (BOSI) by PDI Technologies reported that more than two-thirds of Americans (68%) are willing to pay more for environmentally sustainable products as opposed to cheaper non-sustainable alternatives.

While sustainability reporting can be financially burdensome, B Lab has changed that paradigm. You don’t need to be a B Corp to use the B Lab assessment, which provides insight into tangible and relevant concepts typically absent from the financial performance conversation. These concepts can be used to benchmark and assess how a business can better align the values of the business with that of its stakeholders.

In addition to market differentiation and meeting consumer demand, consistently reporting on ESG helps businesses improve enterprise value — and it’s more accessible than ever. It can be done using a variety of frameworks or even on your own terms. Consumers care about the mission and purpose of a business, and ESG metrics help share that story with the world.

If you want more guidance on getting started with sustainability reporting, don’t hesitate to contact us.

A couple of decades ago, most business owners would argue that social responsibility had little to do with the mission of a business. Today, however, we are witnessing a movement of companies using their corporate success as a tool for social and environmental change. One big indicator of this movement is an increase in companies seeking B Corporation certification.

More and more businesses are proving that a successful business can be — and even should be — equal parts profit and purpose. In my experience running a B Corp, I’ve found that it’s possible to maintain healthy profit margins and still impact the health and sustainability of the community and the larger economy.

B Corporations are businesses verified by the independent nonprofit, B Lab, to uphold a strict level of corporate, social, and environmental responsibility.

Becoming a certified B Corp requires a rigorous assessment that measures the extent to which your company balances monetary success with doing good. The B Impact Assessment requires an in-depth analysis of your company’s business practices and your impact on employees, customers, the supply chain, the community, and the environment. The assessment consists of approximately 200 questions that vary based on your company’s size and industry.

You can use the B Impact Assessment as a free online evaluation tool to measure your company’s impact. Then, when you are ready for your company to become a B Corp, you can submit the assessment to B Lab for third-party verification, evaluation, and certification. Maintaining certification requires you to update your B Impact Assessment and reverify your scores every three years, in addition to being ready for an in-person spot audit at any given time.

If you think this sounds like a lot of work, you are undoubtedly correct. It can take months to complete and obtain B Corp certification, not to mention the extensive labor required to track, record, and collect a massive amount of data.

So, why put yourself and your business through this tedious task? Aside from positively impacting the community, I have found the B Corp values to be increasingly relevant when building a successful business that people trust and value.

Most businesses have a set of core values and operational practices that govern their organization. In most cases, these core values cover factors like employee happiness and customer satisfaction, and they often also mention the betterment of the community.

However, how often do you get to prove that you abide by these beliefs? Becoming a B Corp gives life to these claims, which are valuable to employees and consumers. It’s also immensely important when it comes to adding substance to your mission and practices.

The economy is always evolving. Markets change. Consumer demand shifts. New technologies are continually improving the way we do business. Consumers today are no longer fooled by marketing claims; they want cold, hard facts and proof that companies are transparent about their operations.

The B Corp assessment creates a baseline for current practices by requiring management to scrutinize how their organization impacts others. The evaluation highlights working practices, identifies operational inefficiencies, and creates a road map for constantly comparing and improving future strategies.

On the surface, all businesses exist to make a profit. However, consumer demand for increased transparency and regulations makes it clear that a company’s actions and operational choices directly impact marketability. The B Corp community, or the “B economy,” creates a network of like-minded businesses with which to work and grow. It gives management the power to spend budget dollars and build relationships with other companies that operate in a way that betters the world around them. This creates a supply chain of businesses that use their practices as a force for good.

Ultimately, the behaviors of B Corps focus on the success of everyone in the community, not just the owners and employees of the business. This community-centric trend is gaining popularity among younger generations looking to invest their time and money in companies that fight for causes they care about.

Likewise, many investors emphasize environmental, social, and governance (ESG) factors when building their investment portfolios. I expect that successive generations of workers, consumers, and investors will demand that the organizations they associate with be mission-focused rather than profit-focused.

Although rewarding, undergoing the B Corp certification process takes time, patience, and diligence. It’s important to know that you don’t have to become a certified B Corp to create a mission-based enterprise. The B Impact Assessment is free to use as a framework for assessing your overall impact and adjusting your practices as needed. For those looking to complete certification, having buy-in and support from your organization’s leadership team is exceedingly helpful when it comes time to identify shortcomings and adjust policies and culture.

Assembling a task force with a representative from every department (human resources, IT, marketing, finance, etc.) can help create a cohesive vision and maximize efficiency during the data-gathering and assessment phases. For extra support, you can hire a B Corp consultant to help guide you through the requirements, gather data, and navigate the audit process.

Ultimately, joining the B Corp community is a way to make a public promise to yourself and the world that your company exists to fight for a better future. If you have any questions or need help with the B Corporation Certification Process, contact us.

The term “sustainability” encompasses a broad range of non-financial  metrics that  affect a company’s financial condition and performance. Media attention on ESG or environmental, societal, and governance matters has increased public awareness and prompted concerns about how sustainability issues could impact value or increase a company’s risk of litigation. 

A sustainability report or certification communicates the company’s sustainability goals and how the company plans to meet them. They reflect the intangible value that has been traditionally missing from book values and financial reporting for enterprise valuations for buyers and investors and focuses on  three areas: 

Measuring a business’s health and success by one variable may make things easy, but it does not reflect an organization’s actual health or ability to continue to generate earnings in an inevitably changing market. The tides are turning from shareholder value to stakeholder value. Not just operating a business on the triple bottom line, but the quadruple bottom line of people, planet, purpose, and profit, where the latter is the result of coherent strategies and investment in the first three. 

The evidence of an evolving world and shift in investor focus is most visible in the financial markets and company valuations. The gap between a company’s value on its balance sheet and its market value reflected in its stock price grows larger each year. 

Sustainability is the biggest disrupter in business right now. It really is not if you will need to engage with these frameworks, but a matter of when

Sustainability reports explain the impact of an organization’s activities on the economy, environment, and society. During the novel coronavirus (COVID-19) pandemic, stakeholders continue to expect robust, transparent sustainability reporting, with a stronger emphasis on the social and economic impacts of the company’s current operations than on environmental matters.

Investors, lenders, and even the public at large may pressure companies to issue these supplemental reports. But the information they provide isn’t based on U.S. Generally Accepted Accounting Principles (GAAP). So, is it worth the time and effort? One way to make your company’s report more meaningful and reliable is to obtain an external audit of it.

A sustainability report generally focuses on a company’s values and commitment to operating sustainably. It provides a mechanism for communicating sustainability goals and how the company plans to meet them. The report also guides management when evaluating corporate actions and their impact on the economy, environment, and society.

During the COVID-19 crisis, stakeholders want to know how your company handles issues such as public health and safety, supply chain disruptions, strategic resilience, and human resources. For example:

Stakeholders want assurance that companies are engaged in responsible corporate governance in their COVID-19 responses. Sustainability reports can showcase good corporate citizenship during these challenging times.

There aren’t currently any mandatory attestation requirements for sustainability reporting. That means companies can produce reports without engaging an external auditor to review the document for its accuracy and integrity. However, without independent, external oversight, stakeholders may view sustainability reports with a significant degree of skepticism. That’s where audits come into play.

Many organizations have developed standardized sustainability frameworks, including the:

External auditors can verify whether sustainability reports meet the appropriate standards and, if not, adjust them accordingly. In addition, numerous attestation standards govern the audit of a sustainability report, including those from the American Institute of Certified Public Accountants, the International Standard on Assurance Engagements, and the International Organization for Standardization.

Many companies agree that a sustainability report is important to their communications with stakeholders. But there’s little consensus on the approach, topics, or non-GAAP metrics that should appear in sustainability reports. We understand the standards that apply to these supplemental reports and can help you report sustainability matters in a reliable, transparent manner. Contact us today to speak to one of our industry professionals.

Imagine you’re driving on the freeway. You’re maintaining the speed limit, abiding by all traffic laws, going about your typical morning commute. A flashy red sports car suddenly appears in your rearview mirror, tailgating inches from your bumper. After several seconds the car swerves to the other lane and immediately proceeds to bolt in front of your vehicle to cut you off before speeding away out of sight.

A primitive response to this situation would be anger, annoyance, and swift judgment. The abrupt behavior and type of vehicle may lead you to think to yourself, “Of course the egocentric, jerk doesn’t care about anyone else on the road.”

The act of stereotyping the driver off limited material information builds an instant emotional and psychological barrier that favors anger and judgment over curiosity and empathy. Perhaps the red sports car driver received the news that their mother is sick, maybe their wife is in labor, or maybe their child needs immediate attention. Knowing this information at the time of the incident would have likely led you to more patience, understanding, and acceptance of their behavior. Losing sight of what connects us as human beings makes it painfully easy to revert to harsh judgment rather than compassion, and this tendency is becoming increasingly consequential in our daily lives.

There is no denying that humans are genetically programmed to make snap judgments to trigger natural fight or flight instincts. Research from the University of York found that humans can form first impressions in a little as 33 to 100 milliseconds. While our predisposition to determine friend vs. foe remains critical in life-or-death scenarios, the tendency to instantly judge a person’s character based on a millisecond impression is an unfortunate side effect that humans must overcome to adequately address diversity and inclusion efforts. Whether that impression is formed by race, gender, political affiliation, or even hobby, the idea of creating “in” vs. “out” groups is something that psychologists have seen in children as young as 17 months old.

In the business world, unconscious biases can shape every facet of an organization. From hiring tendencies, promotion patterns, and even payment structures, unchecked biases can lead to unintentionally homogenous workforces that ultimately stifle innovation and originality. Teams with similar backgrounds and lifestyles inherently breed uniformity — a quality scantily preferred by businesses hoping to adapt and flourish in the long run. As Larry Dixon once said, “If two people were exactly alike, one of them would be unnecessary.”

Corporate diversity and inclusion efforts have become a hot ticket for combatting homogeny in the workplace. Businesses often pursue diversity in a clinical rather than personal way — focusing primarily on reaching racial and gender quotas to validate their progress opposed to embracing unique, independent thinkers. However, diversity efforts cannot solely focus on ticking off boxes and meeting quota goals. Rather, it must seek to provide an environment where unique points of view produce different questions, unlikely ideas, and productive problem-solving. This means setting aside initial biases and delving deeper into the reasons behind certain ideas and behaviors.

Inclusive discussions require respect, empathy, and a feeling of safety in vulnerable and potentially judgmental situations. To borrow an example from Tonie Snell, even if a company’s board is 20% women and 15% of their leadership is Latinx, those statistics are only substantial if every person feels comfortable enough to contribute their thoughts.

It takes a certain level of personal awareness to seek and understand others’ personal opinions and input successfully. It comes down to treating people like human beings rather than a running list of superficial attributes. How we ask for and respond to different opinions will determine how likely people will continue to be vulnerable and share their ideas.

In her TEDTalk, “Is it Enough to be Politically Correct,” Sally Kohn says that society’s need for political correctness has developed two common behaviors: filtered and insincere conversations or silence due to fear of offending others. Kohn says that rather than seeking political correctness, “what matters more is emotional correctness — the tone, the feeling, how we say what we say, the respect and compassion we show one another.” Approaching situations (particularly in cases of opposition or friction) with grace and empathy can tear down the emotional barriers that lead us to judge those that are initially perceived to be in our outgroup.

When it comes down to it, diversity is ever-evolving, and we must continuously strive to improve it. We must learn to question our initial judgments and lead conversations with open, inquisitive, and genuine intentions. No one is without fault, no one is without bias, and no one is above improvement. When we learn to overcome the “us vs. them” mentality, we begin to open the door to more meaningful relationships with our community.

To quote one of my personal heroes, Mr. Rogers, “As human beings, our job in life is to help people realize how rare and valuable each one of us really is, that each of us has something no one else has — or ever will have — something inside that is unique to all time. It’s our job to encourage each other to discover that uniqueness and to provide ways of developing its expression.”