At the B Corporation Champions Retreat a few weeks ago in Burlington, I was surrounded by a plethora of fellow B Corps from around the world. The energy in the room was palpable. Healthy debates were happening throughout the conference on how our varied businesses were working to be a force for good in our society and the planet. It was a refreshing shift from business as usual. More important, the frustrations we all feel on a national level, especially in the wake of the mid-term elections, did not dampen the optimism in the room. It was heartening to see a central focus on redefining economic success. Rarely am I in the room with so many likeminded businesses where these thought-provoking conversations are seen as the norm.
With the leadership vacuum in Washington, it’s more important than ever that businesses embrace new frameworks that consciously prioritize workers, communities and the environment as well as profits. At the edge of the ecological cliff, and with a floundering social safety net, We the People have to stop the current economic engine from continuing to dismantle our sense of connectedness and community.
B Corps bring a beacon of hope. They measure what matters and seek outcomes that address the greater good. Becoming a B Corp means committing to meet rigorous standards of social and environmental performance, accountability, and transparency. The commitment calls on businesses to evolve capitalism from a form that maximizes shareholder value to one that maximizes shared value. As B-Lab founder Jay Coen Gilbert puts it, “we can’t change the outcomes unless we change the rules of the game.” B Corps are fighting for a corporate framework that spawns good companies in addition to good products.
It’s Not Easy Being B
B Corp’s challenging company assessment tool asks companies to review and improve on four fronts. In the area of governance, we are asked to look carefully at our mission. Does it include factors that affect “We the People“ positively? Are we transparent about what we do and how it impacts society? And how do we accomplish what we do? Does our structure address all stakeholders or just our short-term financial results?
The second area of review looks at how we are configured as a team of workers. Is compensation fair? Do we provide adequate training to allow workers to grow and develop new skills? Do we permit workers to have skin in the game through ownership opportunities? What is the overall work environment like? Does it provide a healthy work/life balance?
The next two areas that B Corps are asked to review are, community and environment and societal impact. These questions cover job creation, wages, diversity, charitable giving, local involvement and purchasing, energy usage, water waste, emissions, supply chain, and more. A new area in development will ask companies about the intent behind their existence: how the business defines “success.” In essence, what are the rules of the game that we impose upon ourselves, above and beyond what the law requires?
Clean Yield has undergone the B Corp assessment a couple of times, and we have found the process enlightening. We are asked to stop and assess how we are doing and find ways to strengthen our commitment to “what matters.” In a B Corp world we believe that by pushing ourselves to meet higher standards of transparency, accountability, and performance, we can show through practice that there is a better way to do business. It is in this scenario that “We the People” all win. We are also keenly aware that we have no business pressing the corporations we invest in to make changes if we ourselves are not committed to self-improvement.
Next Stop: World Domination
B Corp counts about 1,100 benefit corps now in existence. In addition there has been a large effort in 27 states to pass legislation to permit companies to operate legally with a “blended bottom line” that allows companies to make decisions that consider more than just their financial bottom line. A key victory occurred in 2013 when Delaware became the 19th state to enact benefit corporation legislation.* B Corp proudly noted the state’s significance, since it is home to most venture-backed businesses, 50% of all publicly-traded companies, and 64% of the Fortune 500. “[I]t is the most important state for businesses that seek access to venture capital, private equity, and public capital markets. The path is now clear to scale business as a force for good.” The B Corp movement includes at least two publicly-traded companies: Natura, the Brazilian cosmetics company, and Rally Software. Plum Organics, New Chapter Vitamins, and Ben & Jerry’s are three B Corps operating under the umbrella of public companies (Campbell’s, Procter & Gamble and Unilever, respectively).
*Vermont also offers B Corp certification, and Clean Yield is a registered Vermont Benefit Corporation.
Completing the assessment also drives home the fact that, as advocates for corporate change, we have far greater impact on the world using our leverage as investors than we do as a seven-person company that happens to purchase a relatively small amount of responsibly produced goods and services. As an example of this leverage, we can make great jobs for seven people, but when we conduct a successful dialogue with a corporation about its employee policies, we might improve the job experience of hundreds or even thousands of people. And when we make small, local, high-impact investments, we help create more jobs and provide job security for existing workers. We’re hoping that as the B Corp assessment and scoring tools evolve, more indicators will emerge to measure and give credit to these fundamental activities of our business.
Here at Clean Yield, we do very well when it comes to employees and our service. We find it challenging, however, to improve our environmental footprint. For example, our rented office is in a small, historic building in Norwich that is not LEED certified, but we’ve done what we can to live as greenly as possible in that space, from selecting responsible materials to furnish the office to trying to figure out how to lower our already-low electricity usage. This sort of thing preceded our B Corp certification, but the exercise of our annual self-assessment serves always as a useful reminder to look for ways to improve.
Coming in 2015: the Clean Yield compost heap.