What It Means To Be a Certified B Corp

Most corporations have a reputation for being less than ethical and responsible in the way they operate. People have concerns about the environment, and the irreversible damage corporations may be causing to non-renewable resources. 

Unfortunately, corporations are allowed many unchecked freedoms that do more harm than good. Certified B Corporations are corporations that have made an active effort to take a stand for better principles. 

Most corporations don’t have to be held to account for the impact of their decisions regarding challenging problems like environmental or social standards. B corporations volunteer to be held to account, contributing to a global culture shift that builds stronger communities and contributes to a healthier environment. 

Regulations have minimal impact on world companies in terms of legal accountability for social and environmental ethics that reflect the attitudes and preferences of many conscious consumers, such as the use of sustainable materials or the overall positive impact of the company. 

B Corporations hold themselves and each other to task for setting and maintaining a standard that many people wish all corporations were required to meet. 

The Difference Between B Corps and Other Similar Corporations

There are many ways a corporation can pledge to make wiser choices that are more beneficial for their consumers and the planet. Some of these designations or claims hold more weight than others, and they can help B Corps build trust through public transparency and credibility.

Corporations on a Mission

Companies often release mission statements about who they are, what matters to them, and how they intend to operate. These mission statements are admirable. They’re also not enforceable. 

Corporations may state that they want to improve their environmental performance, reduce the trash released into our waterways, or contribute to creating more high-quality jobs in underserved communities. While these ideals are worthwhile and noble to pursue, no one can hold them to account for meeting those goals.

If a company reduces its waste by 3% and creates five jobs a year, they’re technically meeting their goals. There is no minimum score for success, nor are there legal requirements keeping their sustainable development goals in check. 

Although something will always be better than nothing, their mission can be misleading to people who cannot determine what steps the corporation is taking and the company's impact overall. 

This doesn’t mean that all mission-driven companies aren’t to be trusted. It implies that discerning consumers should keep an eye on the latest news that companies report. If they’re successful in adhering to their mission, they’re likely to publish their efforts in a full impact report and encourage participation among their consumers. They’ll happily back up their claims with meaningful proof. 

Benefit Corporations

A B Corp is not the same type of institution as nonprofits. Instead, you can see this designation as analogous to a Fair Trade certification or USDA Organic certification for agriculture.

Businesses have different legal structures. A benefit corporation is a new type of corporation, an alternative to “inc” or “LLC.” This designation is critical because it is a powerful way to definitively change the responsibilities and expectations of a corporation to uphold an inclusive economy as the leaders of this emerging economy. 

Corporations are obligated to maximize their profits for the benefit of their stakeholders constantly. This pressure to maximize profits often comes at a social or environmental cost.

Benefit Corporations have a license to pursue social good in the same way they’d pursue profits. It means that doing the right thing is built into their structure and often into legal governing documents. 

This new kind of business is held to account for its social impact and protected from the repercussions of stakeholders who may be dissatisfied with their bottom line. B Corps use profits to pursue a sustainable economy, lower levels of poverty in the global economy, fight inequity, or generally measure a company’s impact in terms of their contribution to some greater end.

As long as they’re able to prove that the decisions and moves that they make are effectively geared toward social good through a combination of third-party validation, transparency, and legal structure, they don’t have to swim in profits. 

Corporate Social Responsibility

Corporate social responsibility (CSR) programs are started and managed internally. Corporations build their own CSR goals and plans, and they’re the only people holding themselves accountable to achieve those goals. If they don’t, there aren’t many meaningful consequences. They don’t have to report to anyone. 

CSR programs may contain a wealth of admirable sentiments, but they don’t actually mean anything. Oftentimes, CSR programs are utilized to spin good press for a corporation. The goals are easy to discuss and may receive praise from the general public, but there’s no one around to make sure that a corporation follows through.

Since they aren’t a benefit corporation or a certified B Corp, they’re under no obligation to meet the goals they claim to have set for themselves through a B impact report, a B impact assessment, or any other external proof of efficacy. The goals aren’t a part of the corporation’s mission as they aren’t thoroughly interwoven with operations.

Certified B Corporations

A certified B Corporation is required to treat people and the planet with dignity. The government does not officially impart the designation of B corporation. Instead, B Corps forms by voluntarily submitting all relevant information to a third party responsible for evaluating their efforts and holding them accountable. 

The non-profit B Lab is responsible for creating a universal standard for socially and environmentally responsible practices within the global community of Certified B Corporations. B Lab is extremely thorough in the standards that they set. There’s little to no room for reinterpretation. 

B corporations are held to a remarkably high standard for their performance. The rigorous assessment of a company is required to demonstrate the actions they’re taking to remain environmentally and socially responsible. If they’re not doing their best to achieve their goals, they can jeopardize their status as a B corporation.

This is a step that isn’t required of businesses. Becoming a B corporation is something that corporations make a conscious decision to do because they’re willing to prove that their ideals are of the utmost importance. They’re choosing to be held accountable and measured against other corporations for their ability to maintain the highest standards.

For this reason, B corporations are the easiest to trust. There is no room for error or embellishment. Their transparency and legal accountability help affirm the aspirations of the B Corp community of leaders and their commitment to this positive power of business. 

They’re going to extreme lengths to prove that they’re doing more than just talking with their board of directors about how much better the world would be if corporations were held to higher standards. They’re ascertaining that they’re being held to the same standards they believe should be universal. 

Repeated Impact Assessments Assure That B Corporations Continue To Right by the World

Becoming certified as a B corporation is a rigorous process, and it’s just as rigorous to maintain that B corp status. Impact assessments determine a corporation’s candidacy for B corp status. 

Corporations are awarded up to 200 total points for their performance across five key business areas.

  1. Governance
  2. Workers
  3. Environment
  4. Customers
  5. Community

These key areas are, in essence, things that B corporations are required to care deeply about. They need to run themselves effectively, treat their workers exceptionally, minimize their impact on the environment, meet the needs of their customers, and positively impact their communities.

They’re also required to donate a portion of their proceeds to non-profit organizations that will use that money to carry the torch. B corporations are intended to make high standards and ethical practices contagious. They’re intended to make a widespread impact that reverberates throughout the world. 

In order to meet the bare minimum for B Corp certification, corporations have to have company scores of a minimum of 80 total points. This process is so thorough that less than 4,000 corporations currently maintain B corp status. In fact, many never meet their minimum requirements. 

Caldera + Lab Is a Certified B Corporation

Obtaining and maintaining B Corp status is notoriously hard work, but it’s work we’re willing to do. We care about people and the planet, and we’re willing to do whatever it takes to ensure our corporation is designed to do good. 

Every ingredient in our skincare products is either organically grown or sustainably harvested from the wild. We take care in choosing our packaging to ensure it’s as recyclable as possible. 

We want to leave a minimal footprint while delivering the best possible skincare to our customers. That’s what being a B corporation is all about. 

 

Sources:

Corporate Social Responsibility (CSR) Definition | Investopedia

What is a Benefit Corporation? | Benefit Corp

B Corporation Impact Assessment