These days, individuals not only care about the double bottom-line. More and more consumers are buying from companies that contribute to causes they care about. According to YourCause.com, 66 percent of global consumers will pay more for sustainable goods. Also, a recent report by Cone Communications revealed that 86 percent of consumers expect companies to act on social and environmental issues. Many companies answer this call by instituting corporate social responsibility (CSR) departments. However, some business owners are embracing a holistic approach to the triple bottom line by incorporating as B Corps.
What is a B Corp?
A Benefit Corporation (B Corp) is a for-profit company that is certified by the Nonprofit B Lab. Companies that certify as a B Corp are required to meet standards where the ultimate goal is to further a social or environmental cause. B Corps are known for their transparency and commitment to using their profits to not only run the company but also to solve some of society’s most trying problems.
What are the Benefits of Becoming a Certified Benefit Corporation?
While putting a company in a position to make lasting change in the global community is an excellent reason to start a B Corp, there are more benefits to taking on this certification. Take a look at these five advantages of certifying your company as a B Corp.
Catching Inefficiencies Sooner
B Corporations are held to a high standard when it comes to being transparent. For companies to become certified, they first have to go through a rigorous impact assessment and a site review. For a small business or startup, the evaluation and yearly interview with the Nonprofit B Lab causes owners to regularly look at how they are doing things and determine if there is a more sustainable way. It gets staff in the habit of getting rid of practices that produce waste or fail to align with the company’s mission.
Hiring and Retaining Innovative Talent
A running theme for new generations of professionals hitting the job market has been a desire to work for a company that accomplishes a social good. According to YourCause.com, 75 percent of millennials would take a pay cut to work for a responsible company. Someone applying to a B Corp is more likely to identify and relate to the company’s mission. The certification process also requires businesses to take on an employee-centric culture by encouraging succession plans, raises, a healthy culture, and a global code of conduct.
B Corps allow a company to proclaim who they are and what they are about. It immediately lets customers know that their money is going beyond profit to solve a social good. Outdoor apparel company, Patagonia, donates services and one percent of sales to many grassroots environmental groups. Greater Richmond Grid is a community-based magazine located in Richmond, Virginia. The magazine gives 50 percent of profits to charity and works with suppliers who have environmental certifications. There are many other companies on the B Corp list, but these examples reveal the impact they are making and how customers can give back by purchasing from them.
It Sets the Tone with Shareholders
Small businesses and startup owners are likely very well aware of the pressure that investors, shareholders, and large funders can bring to a company. There may be a push to go another direction, revise the mission, or change the company approach entirely. Becoming a B Corp lets shareholders and investors know that having a triple bottom line is essential to the company. Being sustainable, accountable, and employee-centric are the main priorities for the business, and every decision made will take these principles into account.
Attract More Investors
Business owners are not the only individuals who realize that customers are more civically driven when it comes to whom they do business with. Investors are also making this connection, and are seeking out B Corps for investment purposes. Large investors like American Express, Kleiner Perkins, and Catterton Partners have made a point to invest in B Corps. As the popularity of this certification grows, it is likely to attract more investors.
Business owners would likely still have to form as either a sole proprietorship, partnership, or corporation, but some states do recognize B Corps as an official corporate legal status. Moreover, there are drawbacks to consider before jumping into the certification process. However, overall, B Corps allow companies to continuously improve and declare their commitment to improving the world around them. If you want your company to embrace a triple bottom line approach, then obtaining B Corp certification is a smart move.
5 Benefits to Becoming a Certified B Corp, unreasonable.is/5-benefits-to-becoming-a-b-corp/
10 Stats Every CSR Professional Should Know (Infographic), solutions.yourcause.com/csr-stats-infographic/
Benefit Corporations: What Are the Advantages, Disadvantages, and Impact on Not-for-Profit Organizations?, www.cohnreznick.com/insights-and-events/insights/benefit-corporations-what-are-advantages-disadvantages-and-impact-not-profit-organizations
It Pays to Become a B Corporation, hbr.org/2016/12/it-pays-to-become-a-b-corporation
New Report Reveals 86% of US Consumers Expect Companies to Act on Social, Environmental Issues, www.sustainablebrands.com/news_and_views/marketing_comms/libby_maccarthy/new_report_reveals_86_americans_expect_companies_take
Patagonia, Inc., www.bcorporation.net/community/patagonia-inc
Performance Requirements, www.bcorporation.net/performance-requirements
Richmond Grid, www.bcorporation.net/community/richmond-grid
The Benefits of Being a B Corporation, www.nerdwallet.com/blog/small-business/benefits-corporation/
The Surprising Competitive Advantage of the B Corp, www.huffingtonpost.com/shane-paul-neil/the-surprising-competitiv_b_9476380.html