Did you know that 1 in 3 businesses that submit to become a Certified B Corporation will certify for it?
B Lab, the global network for the B Corp movement, admits that it can be challenging to receive this certification. But it is worth it for businesses ready to walk the talk and pivot to become the best business for the world.
What’s a B Corporation?
A Certified B Corporation is a business that focuses on a triple bottom line: people, profit, and planet. It is a hybrid between a standard corporation and a nonprofit organization. That means the business earns a profit.
In addition, a Certified B Corp is also held accountable to higher social and environmental standards. Being held accountable for these higher standards allows the business to do two things. The business is able to prioritize its triple bottom line. It also elevates the entity to B Corp status.
However, think carefully before pivoting to this Certification. It is critical that the members, or owners, of your business formation prepare to make the shift. If your business is incorporated as a corporation, for example, the board of directors and investors must discuss plans to obtain B Corp Certification. This pivot presents significant changes for the business. All individuals must understand why these changes are useful for the company. Members or owners may vote to make their decision.
Certified B Corporation Requirements
Becoming a Certified B Corporation means completing a certification process. Let’s review what happens during this process. We’ll also look at long-term benefits businesses receive with a B Corp Certification.
1. Complete the B Impact Assessment
You may think you are ready to “B the Change,” but first you must take and pass the B Impact Assessment (BIA).
The B Impact Assessment is a free tool. It allows a company to measure its impact on its workers, community, environment, and customers.
BIA starts with an assessment. This includes questions about what it takes to build a better business. Remember that a better business is one that is better for its workers, community, and the environment.
You can get a quick snapshot of how your business is doing and its impact by taking the 30-minute test. However, if you wish to further pursue Certification you must complete the full impact report. This takes two to three hours to complete. It consists of 200 questions. These are determined by your company size, sector, and market. A verified total score of 80 across all impact areas is required to pass the BIA.
Once you have taken the full impact report, review your results holistically afterwards. See how your answers compare to other businesses. Then, create a customized improvement plan. Work on ways you can improve your score to be part of the B Corp movement. You may download improvement tools and case studies available on the BIA website for additional resources.
2. Fill Out the Disclosure Questionnaire
In order to complete the BIA, the business must answer questions about any material negative impacts. Essentially, the Disclosure Questionnaire allows for a public compliant process. This includes background checks and disclosure of any sensitive business practices.
3. Meet the Legal Requirement
The legal requirement for a Certified B Corporation gives legal protection to directors and officers to consider the interests of all stakeholders when making business decisions. It also creates rights for shareholders to hold directors and officers accountable to consider these interests.
There is a grace period from B Lab for companies completing the B Corp legal requirement. Changes may be necessary depending on entity formation and location. For example, some businesses may need to reincorporate. They may also decide to adopt a benefit corporation status. A B Corp Agreement must be signed by the business. This commits to meeting the legal requirement.
4. Take the Verification Process
A multi-step verification process must be taken by the business. This allows them to find out if they met the 80-point score necessary for Certification. In addition, the B Corp Agreement should outline transparency requirements. Businesses will agree to meet these requirements as a Certified B Corp.
Once you complete the BIA and Disclosure Questionnaire, submit both for review with B Lab.
5. Schedule an Assessment Review
After submitting the BIA and Disclosure Questionnaire, a B Lab Standards Analyst will reach out to you. This is to confirm this submission and details about your business.
An assessment may then be scheduled to review the BIA together. Typically, these calls take between 60 to 90 minutes. This ensures thorough review and accuracy for the company and how it plans to commit to the public benefit. A successful review will allow your business to move forward. Pay the annual certification fees and sign the B Corp Declaration of Interdependence before becoming a Certified B Corp.
However, please note that B Lab is experiencing high volumes of Certification interest. The review process for Certified B Corporations may now take anywhere from six to 10 months to complete. Check in with B Lab regularly for any updates and changes.
Benefits of Being a Certified B Corporation
There is an almost endless list of benefits that come with B Corp Certification. A few years ago, we interviewed the founders of Certified B Corporations. These businesses either started their companies as Certified B Corps or pivoted to that Certification.
What benefits do they receive as a Certified B Corporation? Find out!
Using Business as a Force for Good
“We became a Certified B Corp company within our first year of business. The B Corp designation validates our commitment to higher standards and complete transparency of our practices and beliefs. Using business as a force for good is something we’ve done since the beginning.” — Pooneh Ramezani DDS and Paris Sabo MD, Founders, Dr. Brite
Authentic Brand Experience
“Businesses that wear their values on their sleeves are becoming more and more common. Consumers are looking for an authentic brand experience. The customers you get will be more loyal, talk about you more, and feel better about spending their money where they believe it counts. I do think values-based business models are in their very early stages. B Corps are going to be a major economic trend in the very near future.” — Kevin Brown, Principal, Smart Set
Building Strong Relationships
“B Corps allowed me to tap into myself. Embracing the B Corp methodology allowed me to see that business could be value-driven and still be successful. We are constantly aware of our relationships with our people, community, and clients. How do we strengthen these relationships? How can we make a greater impact on our people and community thus strengthening relationships with our clients?” — Cole Palea, Owner, NOVO Painting and Property Services
Creating Diverse Teams
“We hire a lot of queer and gender queer people because we want to be a safe space. We know that awesome people come in all forms and we are a better company for having a more diverse team.” — Sash Sunday, Founder, OlyKraut
“NEEV exists to empower more women. Each day we are in business means there is an artisan earning a living, a customer who enjoys fine ethical and sustainable goods, someone who gets a chance to better their lives with our charitable giving. Being the change is one step taken to a more equitable world and to lead a fulfilling life.” — Ruksana Azhu Valappil, PhD, Founder, NEEV
Committing to Sustainable Practices
“Our B Corp only buys from fishermen following sustainable practices. We reward them by helping for lobstermen coops and committing in advance to large quantity lobster buys at fair prices. We also assist in bait purchasing. Our B Corp gives back to programs that benefit the health of both the oceans and the communities that depend on them.” — Ben Conniff, Co-Founder, Luke’s Lobster
The B Corp Movement is the Future!
“Our collective future is determined by actions we take today. Businesses making the pledge of interdependence to be a force for good in the world is more important than it has ever been. Solving critical local, regional, national and global challenges will require deeper commitments from everyone. Becoming a member of the B Corp movement is a wonderful and tangible way to turn those commitments to the greater good into action.” — Laura Whipple, CEO, Scout Books
Is your state a B Corp state? Let’s find out and share more with you about B Corporations. Reach out to MyCorporation at mycorporation.com or give us a call at 877-692-6772.