B Corp — what and why?

You might have noticed a logo appearing a lot more lately. An elegantly simple black B on white background, surrounded by a circle and underlined:

It’s the B Corp logo:

This Christmas I went shopping in Covent Garden. The black B appeared in shop windows (All Birds and Finisterre). I bought an Innocent Smoothie in Boots. That logo again. It also appeared on the bottle of organic Christmas port my family drank this year.

I am primed to notice B Corp. When you decide to buy a particular make of car, you suddenly discover that the roads are full of them. Those cars were there before, but now you’re predisposed to notice them. In the same way, I now see B Corp everywhere. Despite my predisposition to be aware of B Corp, I don’t think imagining that it’s appearing on more and more brands recently. A quick rifle through my MSc course notes showed that there are plenty of well-known brands in the UK that carry the B Corp certification:

I vaguely knew that B Corp had something to do with responsible and sustainable businesses practices. I assumed that anything with B Corp on it had to good for the environment. But that’s as much as I knew. I wanted to discover the exact definition of a B Corp. I also wanted to know what impact B Corp is having in the real world.

What is B Corp?

B Corp is an organisation with one clear mission in its sights — to “make business a force for good”. Business is traditionally considered as a force for profit, rather than for good. Companies exit to make money for their owners or shareholders. Sure, many businesses also dedicate a (usually small) percentage of their profits to charities and to socially or environmentally beneficial works, but those acts of corporate benevolence are incidental to growing sales and profit. B Corp exists to turn that on its head.

B Corp aims to do nothing less than transform the global economy to benefit all people, communities, and the planet. This is a call for a radical shift in how businesses operate: rather than viewing impacts on people and planet as secondary, B Corporations commit to making these an equal priority alongside profit.

This isn’t a brand new concept, as it draws on the “3Ps” framework developed by John Elkington in 1994. The 3Ps approach to business places Planet and People on an equal footing with Profit. What is new about B Corp is that it makes sustainable businesses much more prominent. It hasn’t always been easy for people to find ethically sound companies; B Corp’s logo makes them easily identifiable to consumers. B Corp fulfils another important function, too. Greenwashing is the bane of ethically-minded consumers. It’s hard to know whether a company’s claims to be responsible are trustworthy. B Corp provides an objective assessment of companies against universal sustainability objectives.

For-profit companies can apply to be certified by B Corp. B Corporation status requires a score of at least 80 (out of 200) against 5 areas of impact: Governance, Community, Workers, Environment and Customers. Each certified company’s impact assessment is available on the B Corp website. UK-based companies must also include wording in their articles of association’ — written rules about running the company agreed by the shareholders or guarantors, directors and the company secretary. This ensures that businesses take the interests of shareholders, suppliers, society and the environment into account.

What are the pros and cons of B Corp?

An issue that has stymied the sustainability movement is that ‘sustainable business’ is so ill-defined. B Corp helps to remedy that by laying out unambiguous and measurable goals for sustainable business. At the same time, B Corp’s certification system makes it much easier for people to identify businesses that take sustainability (both social and environmental) seriously.

B Corp is proving that there need be no trade-off between commercial success and business ethics. According to one analysis, businesses within the purpose-driven B Corp movement are growing 28 times faster than the national economic growth of 0.5%. PWC agrees that B Corps are growing at significantly higher rate than the average across all businesses, and points out that B Corp certification can improve the saleability of an organisation too: There may be less due diligence required in a B Corp sale versus other types of companies.

My main criticism of B Corp is that the requirement for a company to score 80/200 means that companies can have a very low score in one or more of the five areas measured, including environmental impact. When investigating the best innovations of 2021, I came across Bombas Socks. It’s a B Corp and deservedly so — its mission is to help those experiencing homelessness. So far, the company has donated 50 million items. Amazing! Even so, its environment credentials seem poor: it’s B Corp score for the environment is just 3.9, compared to 45.4 for community. Unusually, the brand’s own website has no sustainability information. Product details information contains no mention of any use of organic or recycled fabrics. So, if you were to see a B Corp logo and assume the product must be environmentally responsible, you could be wrong.

Plus, the assessments of individual companies — like this one — reveal that there’s a strong emphasis from B Corp on an organisation’s processes: Do they have a policy statement documenting their commitment to the environment? Have they conducted life cycle analysis? There’s less arguably emphasis on the social and environmental results the company achieves. Of course you’d expect that a company that has good policies and targets in place would also be generating positive impacts but that’s not guaranteed.

In conclusion …

The B Corp organisation is a very positive thing.

Arguably most important is that B Corp is driving a reappraisal of what business is for. So long as businesses see social and environmental impacts as unimportant, progress towards sustainability will remain minimal. B Corp provides a powerful call for companies to define themselves not solely as entities that make money but as organisations that contribute much more widely. KPMG Survey of Sustainability Reporting 2020 demonstrates how much this is needed: 40% of major companies still don’t report on sustainability as part of their annual reports — a number that’s unchanged since 2017.

The B Corp system isn’t perfect: I’d like to see B Corp have a minimum standard in each of its 5 impact areas. That way, no company could achieve certification despite having poor environmental standards, as per Bombas. However, there’s no doubt that B Corp is a force for good, causing business to reimagine itself as a custodian of our planet and communities.