B Corp: The New Standard For Business
B Corp: The New Standard For Business
For Jay Coen Gilbert, it felt like someone took a wrecking ball to his dream.
American entrepreneur Gilbert and two college friends launched AND 1 in 1993. By the time Gilbert decided to sell the basketball apparel business in 2005 so he could move on to new projects, AND 1 was worth $250 million. More importantly to Gilbert, the company was built on a firm foundation of social responsibility. It had an ethical supply chain and used business principles to give back to the community, donating five per cent of annual profits to youth organizations.
But the only thing the new owner was interested in supporting was his own pocketbook. He moved production to cheaper, low-wage factories in China.
The experience led Gilbert to wonder how he could help other entrepreneurs build socially responsible businesses, and preserve their legacy when the business goes public, or the reins are passed on. And how could he help consumers and investors find and support such businesses?
Speaking with investors, consumers, and other social entrepreneurs, Gilbert discovered the biggest problem was so-called pretenders and wannabes. Because good corporate citizenship is rapidly becoming a smart marketing tool, a growing number of businesses were marketing themselves as socially responsible without actually cleaning up their acts. This frustrated businesses that were taking real steps to improve their social and eco footprints — and consumers tired of phony corporate social or environmental campaigns that were little more than marketing ploys.
Gilbert regrouped with his college friends and together they founded B Lab in 2006. It’s a social enterprise with a system for certifying companies that provide value to society beyond the mere product or service they sell. That social value could be the ethical sourcing of raw materials, environmental sustainability, community building, or all of these things. B Lab evaluates companies and organizations for these qualities, and those that make the grade are certified as “B Corps.”
Whether it’s a home-based mom-and-pop craft business, or a large multinational corporation, B Corp certification helps build better businesses, and helps caring consumers make ethical choices. This is an important edge in a marketplace where numerous studies show more consumers want to give their dollars to businesses that give back to society.
Today, more than 1,400 businesses around the world are certified as “B Corps,”including ice cream icon Ben and Jerry’s and crowdsourcing web company Kickstarter. We’re proud to say our social enterprise ME to WE just become the 150th B Corp in Canada, joining other Canadian social enterprises such as Grosche International in Cambridge, On. Grosche, like ME to WE, uses the profits from its products — in this case coffee and tea accessories — to fund beneficial projects around the world like providing access to clean water.
A B Corp certification isn’t just a rubber stamp — there’s an intensive vetting process. In the case of ME to WE, out team had to answer a series of probing questionnaires and produce extensive documentation to prove that the enterprise’s profit was indeed producing a measureable social impact.
Through B Lab, Gilbert and friends also help socially conscious entrepreneurs protect their company’s core values amidst changes in company leadership, and against pressure from shareholders and investors, who might want to put profit ahead of principles.
Much like cities, companies usually have bylaws that govern how the business will run. Under Gilbert’s direction, B Lab created a set of model bylaws that entrepreneurs use to make sure their businesses always remain socially and environmentally responsible.
For many years now, businesses have proudly displayed banners declaring their International Standards Organization (ISO) certification. Proof their products or services meet internationally-recognized standards for quality, safety and reliability.
The B Corp is the ISO standard for the 21st century. We see a day fast coming when no entrepreneur would dream of launching a business without a B Corp certificate to hang in the lobby.
As Gilbert says, “we’re at a tipping point in the evolution of capitalism.”
By Craig and Marc Kielburger