The Power of B Corp: what are the benefits?
29 maart 2023
The concept of B Corps is rapidly gaining momentum as more and more businesses recognize the benefits of certifying as such.
However, there are still many companies that are hesitant to undergo the certification process, unsure of the tangible benefits it may offer to their stakeholders.
In this blog, we aim to shed light on the power of B Corps, their impact on society and the environment, and why businesses should seriously consider becoming B Corps to drive positive change and make a meaningful difference in the world.
What are B Corps?
B Corps are for-profit companies that are legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment.
The B Corp movement aims to use the power of business to solve social and environmental problems and create a more inclusive economy. They are certified by a non-profit organization called B Lab, which assesses the company’s performance using a standardized assessment tool called the B Impact Assessment.
How can they have an impact?
In general, there are two ways in which a company can have an impact.
Firstly, through their operational impact – the operational performance of the company on its stakeholders as it is managed and operated on a day-to-day basis.
Secondly, through a business model impact – the way a company is designed to create specific positive social and/or environmental impact.
An example of a company with a clear business model is Fairphone. Fairphone produces smartphones focused on four key areas of positive impact: long-lasting design, fair materials, good working conditions, and reuse and recycling. Compared to competitors in the electronics marketplace, their efforts in these areas truly differentiate the company and its products.
What are the benefits of becoming a B Corp?
Financial benefits
Besides allowing companies to scale their business while holding on to their social mission, becoming a B Corp can have various financial benefits for companies, such as:
Increased customer loyalty
Patagonia, one of the most well-known B Corps around, was able to attract a loyal customer base, who are willing to pay a premium for products that align with their values.
In addition, B Corps have the advantage of being able to access new markets, as more and more consumers are looking for products and services that conform with their beliefs.
Attracting investors
B Corps can attract socially and environmentally conscious investors who are drawn to the company’s mission and commitment to making a positive impact. This can lead to increased investment and growth opportunities for B Corps, as well as help to build a supportive community of stakeholders committed to their success.
Improved brand image
B Corps are perceived as more responsible businesses. This can result in increased brand awareness, which in turn can lead to higher revenues. It can also improve reputation and brand loyalty, as consumers and stakeholders recognize the company’s values and efforts.
Governance benefits
Governance is an important aspect of a company’s overall commitment to social and environmental responsibility. The B Impact Assessment (BIA) supports business’ governance structure by improving in:
Leadership & decision-making
BIA evaluates companies’ commitment to ethical and responsible leadership and decision-making, as well as the structure and processes to ensure accountability.
B Corps are obliged to have good governance policies. Including code of ethics or anti-corruption practices. These encourage consistent behavior and decision-making across the company.
Transparency & communication
BIA assesses the transparency and communication with stakeholders, and its ability to respond to and manage social and environmental issues. Companies are encouraged to be proactive in addressing potential issues, improving reputation and relationships with their stakeholders.
Warby Parker, a B Corp, released an “Impact Report” that held the company accountable to its stakeholders.
Alignment with standards
The governance criteria are designed to align with internationally recognized standards for corporate social responsibility and sustainability.
This helps ensure credibility and accountability for companies claiming to prioritize social and environmental impact and creates a benchmark for measuring performance in these areas.
Environmental benefits
Certified B Corps meet high standards of environmental performance, including measuring and reducing the environmental footprint and implementing sustainable business practices. The number of points in the BIA increases for monitoring and recording emissions, setting specific and science-based reduction targets and for achieving reduction targets during reporting periods and carbon neutrality.
Becoming a B Corp improves the environmental performance in terms of:
Footprint mapping & reduction
Besides monitoring, B Corps are obliged to reduce their impact on the environment. That includes impacts on air, climate, land, and biodiversity.
Before companies can reduce, they have to map their environmental footprint. The BIA helps companies to make first steps into effectively reducing their environmental impact.
Goal setting
After mapping (and reducing) the footprint, the BIA encourages businesses to set environmental goals and reduction targets for the future.
MUD Jeans, a B Corp and the world’s first circular denim brand, has made a public commitment to reach net zero emissions. The first milestone: MUD Jeans became climate positive in 2020 (this includes offsetting of emission).
Social benefits
B Lab holds companies accountable to meet certain standards of social performance, accountability, and transparency. This requires meeting labor standards, like fair wages, and having a positive impact on the community through social and humanitarian issues. Besides improving the conditions in the supply chains, these high standards have various benefits for:
Employees
The B Corp assessment uncovers opportunities to improve employee engagement and satisfaction, as well as workplace diversity and inclusion.
These opportunities enable everyone in the company to feel valued and have a sense of belonging. According to research by Glint (2020), employees who feel a sense of belonging are six times as likely to perform better. Great news for all B Corps.
Brand reputation
Many B Corps are adopting new employment opportunities through new policies or practices.
For example, ‘open hiring practices’ (e.g. The Body Shop) eliminates common barriers to employment, such as background checks and previous experience. These types of policies positively impact local communities. They provide jobs to people who might otherwise have difficulty finding employment.
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