B-corp certification: Using measurement to separate the contenders from the pretenders
In a world motivated by outcomes, dashboards and metrics, there’s no doubt that we recognize the value of measurement. So, as corporations continue to motivate customers and employees by espousing social responsibility, it is important to know whether a corporation is truly living up to its claims or if it is just hype. Studies show that corporate social responsibility is the second most significant factor in determining employee engagement and more than 9 out of 10 consumers are interested in the social responsibility footprint of a company prior to making a purchase. So how do consumers know what’s real and what’s not?
The only quantifiable way of measuring a corporation’s social impact is through a B corporation certification. B-corp certification is a process by which a company voluntarily undergoes a rigorous assessment of its operations and financials to assess its social and environmental performance, accountability and transparency. B lab, a third-party nonprofit organization, certified the first company in 2007. Since that time, the B-corp “movement” has recognized more than 1200 businesses in 38 countries around the world. All of these businesses have something in common—the desire to redefine success in business.
B corp certification is often confused with Benefit Corporation election, a legal status that is granted to companies who meet specific criteria in one of the 27 states that offer the election. Various rights are granted to benefit corporations depending on the state. Generally the benefit corporation election offers protection to executives and investors in order to make corporate decisions not based solely on its bottom line but also those that are in the best interest of society. B-corp certification is not required for benefit corporation election, or vice versa.
While a rigorous and intense process, B-corp certification provides “a corporate badge of honor” for those who excel in the proscribed parameters. The certification process provides companies with a way to benchmark performance amongst 15,000 others who have used the assessment tool. Additionally, as a relatively “new” movement, the B-corp certified community is a tight-knit one with companies big and small, well-known and obscure. The evolving B-corp community provides opportunities for partnership and knowledge transfer between certified companies. There is also a growing pool of funding from investors seeking out the innovative and sustainable companies certified as B-corporations.
And because B-corps can demonstrate their corporate social responsibility through an independent assessment, the B-corp certification is becoming identifiable and sought after by customers seeking to spend money with companies who can demonstrate their CSR and employees wanting to work in a company that demonstrates it can walk the walk.
With the likes of well- known companies, Patagonia, Ben & Jerry’s and Method as B-corp certified businesses, perhaps the most beneficial reason for the B-corp certification is the ability to separate the pretenders from the companies truly making a difference in their communities and across the world.