An introduction to B Corps
It’s no surprise that Michigan’s 865,352 small businesses have a profound impact on local, national and international economies — as well as the lives of their customers, employees and community members.
By implementing sustainability practices, developing an inclusive and forward-thinking workplace culture and engaging in philanthropy, small businesses are using their influence to make a positive impact on their communities.
The recent B Corp movement proves doing good is more than just the “right thing to do” — it’s a valuable business decision.
The term B Corp, short for Benefit Corporation, is a relatively new business classification that allows you to factor in public good along with the bottom line when making business decisions for your company. While a company with the B Corp classification is still a “for-profit” company, its performance isn’t judged solely on profit, but also on its impact on the world. A B Corp certification can be likened to a Fair Trade or LEED certification and is granted through a rigorous evaluation process by the nonprofit B Lab.
B Lab defines a B Corp as a business that has met the “rigorous standards of social and environmental performance, accountability and transparency” with the common goal of redefining success in business. According to the B Corp website, “B Corps meet the highest standards of verified social and environmental performance, public transparency and legal accountability, and aspire to use the power of markets to solve social and environmental problems.”
There currently are more than 1,600 certified B Corps from 42 countries and over 120 industries. West Michigan is home to 11 certified B Corps, the highest concentration of B Corps in the entire state. However, the B Corp certification doesn’t come easily. In order for a business to become certified, it first must complete the B Impact Assessment and earn a reviewed minimum score of 80/200. This assessment covers the company’s entire operation and measures the positive impact of the company in areas of governance, workers, community and the environment, as well as the product or service the company provides. The B Corp assessment is a useful benchmarking tool that businesses can use to measure and improve their impact.
While any business can apply for B Corp certification, only a handful of states recognize B Corps as a legal entity classification of for-profit businesses. Legislation has been introduced in Michigan that would recognize B Corp as an official business classification. Approving this legislation ensures that B Corps have the ability to act on their social or environmental mission without retribution from shareholders. The B Corp certification is a voluntary certification that can be dropped at any time. A Benefit Corporation status is a permanent change to the corporation’s structure.
Why go through the work to become a certified B Corp in Michigan? The B Corp certification represents a new type of conscious capitalism that accounts for the business’ higher purpose, accountability and transparency resulting in no trade-off between return on investment and social impact. In a recent study, 90 percent of consumers said that they want companies to tell them the ways they're supporting causes. This translates to more than 278 million people who want to know what a company is doing to benefit a cause. Completing a B Corp certification can help you connect with a growing number of consumers who care about where their money is going and what it's supporting. It also can attract the next generation of workforce talent. Fifty-five percent of millennials said a company’s involvement in various causes affected whether they took a job, according to a study sponsored by The Case Foundation.