Here at DGW Branded, we’re always going on and on about the great things that B Corps are doing. From industry leaders like Patagonia creating renewable and sustainable products to smaller businesses such as GIVN that gives a bottle of clean water to a person in need. It’s no hyperbole to say that B Corps are changing the world and what we mean by ‘business’.
We’re pretty vocal about how crucial it is for businesses to put purpose over profit. Besides, when there are unprecedented levels of CO² in the atmosphere, and as “global temperatures continue to increase faster than previously thought,” who can blame us?
We truly believe that becoming B Corp certified is the best way to prove that a business genuinely cares about the planet and its people instead of giving mere empty words and false platitudes. While we have this at the heart of our business foundation, we don’t offer any tips on how to join the movement and become a B Corp. Until now.
In this article, we’re going to tell you everything you need to know about becoming a B Corp company. We’re going to run through the process and tell you all the advantages of being the latest member of the 4,000+ B Corporations looking to contribute towards a brighter tomorrow.
But don’t worry. We’re not going to sugar-coat anything and say it’s something every business should sign up for immediately. We’ll also tell you about why being a B Corp might not be the best option for every company. Before we look at whether or not your company should join the movement, let’s first remind ourselves about what a B Corp actually is.
We go into way more depth about all the ins and outs of being a B Corp in our dedicated article, B Corps, The Future of Business? In that article, we explain what separates a B Corp from a traditional business. We also go through the criteria that are required to become a B Corp, such as the environmental, worker, and community safeguards that a B Corp has to adhere to achieve its certificate. While we recommend reading the whole article, the underlining principle of a B Corp is one that takes care of every responsibility it has as a business before it takes a cent of profit.
Now you might be wondering, “how is this any different from a social enterprise?” And, “isn’t this exactly what a Benefit Corporation is?” Don’t worry, we’ve explained exactly what the differences are between a B Corp, a Benefit Corporation. Put simply a Benefit Corp adheres to the same principles as a B Corp – being responsible for the environment, caring for employees, and building trust and to grow in tangent with the local community.
How these two differ is that Benefit Corporations are self-regulating. They compile the test themselves, rather than B Corps, who have the B Labs review the effectiveness of their ethical standards every two years. If they pass, the B Corp gains certification and can proudly adorn the B Corp certification on their products, among other benefits.
We also have to separate B Corps from Social Enterprises. The two are highly aligned, and indeed some Social Enterprises are B Corps. To put it simply, a Social Enterprise is more community based whereas B Corps are for-profit organizations. We suggest reading our article, ‘What is a Social Enterprise’ to find out more.
Those hoping the process of becoming a B Corp is quick and easy may be in for a disappointment. There are many legal requirements and assessments to complete to achieve certification. Only one in three businesses that submit for certification manage to qualify and the process can be arduous; the review process can take up to 10 months to complete.
While this might put some organizations off, the stringency allows for consumers to fully trust the companies when they spot the certified logo while shopping. Because the B Corp certification really is the “gold standard” for ethical business, let’s see how a business can achieve this.
The first thing to consider is to fill out the B Impact Assessment (BIA). This assessment measures a company’s social and environmental impact to gather knowledge on what areas the business is meeting the B Corp criteria, and which need to be improved if the company is to comply with the regulations. The test is free for all companies, and it’s worth completing the assessment to see how a business ranks regardless of whether becoming a B Corp is a serious consideration or not.
B Labs also has a Legal Requirement Tool. The tool is a perfect resource for finding out how a business can integrate stakeholder interests while running a company. The tool is specific for each type of company, with location and if the business is publicly traded as parameters to guide a business on what they specifically need to do to qualify to be a B Corp in that region. Although there’s lots of legal mumbo-jumbo that’s essential reading to make sure that the business meets the criteria, B Lab’s make the step-by-step guide as straightforward as possible.
Once the assessment has been completed and all the legal requirements have been met, it’s time to submit the BIA to B Labs. The organization will examine whether the business meets eligibility requirements have been met. 80 points are what’s needed to pass. A submission fee of $150 is required to apply, although this is just in the USA. Fees in other countries may vary, please check here to see what fees are applicable in your location.
As we mentioned earlier, arguably the biggest reason from a business perspective is the trust and loyalty that’s attached to being a B Corp. As we wrote about in ‘How Shopping Became Sustainable’ a greater number of consumers are becoming ‘conscious shoppers,’ and being mindful about where and how their products are made. The prestigiousness of the B-Corp certificate cannot be underestimated when it comes to pulling customers!
Let’s not forget that if we turn our attention from profit to purpose, being a B Corp means you can proudly declare that your business is helping to reduce global inequality, lower levels of poverty, plant the seeds of a healthier world for our children, and create stronger communities in the areas we live.
It’s important to remember that the creation of more high-quality jobs with dignity and purpose is great not only for our employees, but research has shown that a happy employee is more likely to work extra hard and stay at that company for a longer.
While we do encourage every business to look into becoming a B Corp, that’s not to say it’s for everyone. The big sticking point for a lot of businesses is the cost. We mentioned earlier that there’s a $150 assessment fee but there are other prices to pay. You should check out this guide to see where your business fits, but the annual certification fee can be as high as $50,000.
Some companies also may prefer a more independent style of audit on how they measure their social and environmental performance. Benefit Corporations are popular as although they adhere to the same rules as a B Corp these are self-reported.
Being a B Corp is also a long-term commitment. Even if a business succeeds in passing the assessment and is awarded the certificate, that’s not the end of the journey. Remember: B Corps are assessed every two years to ensure that the business still adheres to the strict parameters B Labs sets. These parameters are constantly evolving too, to meet the latest expectations concerning the environment and employee welfare. Consequently, a business that falters from its original intentions may suffer greater losses than one that doesn’t seek B Corp Status in the first place.
Being a B Corp isn’t easy. The initial assessment is complex and there’s no guarantee that your company will even pass. Random audits are always something to bear in mind and the cost is also not doable for every organization. That being said, the status of a B Corp can be a highly advantageous marketing tool and lets consumers know that you’re taking your ‘going green’ mantra seriously. This publicity alone can pay off the additional costs of becoming certified.
“So, should I do it?” We hear you ask. We don’t have the answer for specific businesses but we hope that through reading our pros and cons you have a better understanding of the process involved and whether becoming a B Corp is beneficial to your business. The only thing for certain is whether your company is a traditional business, a B corp, or a Social Enterprise, the only thing that can’t be debated is putting all stakeholders’ interests into the heart of the company. The only way we all succeed is by being responsible for the planet, caring for and supporting workers, and enriching the lives of those in our community.
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