Businesses who want to broadcast their social and environmental commitments and the way those commitments inform their approach to governance are increasingly opting to become B Corporations. The “B” stands for “benefit.” Former L’Oreal Executive Nicholas Krafft said the movement toward greater corporate accountability is not only necessary for the sake of people and the planet but represents savvy business practice. “Excellence in financial and business success go hand in hand,” Krafft said. “That’s why many B Corporations are leading in their industries.”
The B Corp movement started in 2007, and there are now more than 3,700 certified B Corporations in 74 countries who share one unifying goal — to balance profit and purpose by meeting the highest standards of verified social and environmental performance, public transparency, and legal accountability. A B Corporation is a different kind of business. It is one that creates benefits that extend beyond just shareholders to communities and the environment at large.
In order to receive B Corporation certification, companies must meet a minimum verified score on the B Impact Assessment, which quantifies a company’s impact on its workers, customers, community, and environment. These scores are publicly available at bcorporation.net. Transparency is a critical part of the B Corporation process, says Krafft, adding that the public wants data around a company’s sustainable practices — from the use of recycled materials, to choosing manufacturers that meet fair labor standards.
A B Corporation’s legal governing documents are also publicly available, and their boards are held accountable for balancing profit and purpose. B Corporation certification is administered by the nonprofit B Lab. Increasingly, says Nicholas Krafft, customers want to know a company is standing behind its commitments, and demanding accountability. In exchange, Krafft says, these companies inspire real brand loyalty.
As information about the impacts of climate change and pollution have come to light, there’s been increasing public pressure for companies to embrace social and environmental commitments in meaningful ways. B Corporations not only serve to lead by example, says Krafft, but they also help to ensure company’s profitability. He notes that top investors like Larry Fink, chairman and CEO of Blackrock, have publicly declared that corporate success depends in part on embracing sustainability and making “a positive contribution to society.”
Meanwhile, Matthew Weatherley-White, Managing Director and Owner of The Caprock Group, has called these “intangible assets” of environmental and social company commitments an “increasingly important part of business valuation.” Weatherly-White adds: “B Lab quietly offers investors a pair of braided firsts: the first toolbox to help management focus on the kind of patient, steady value creation that defines ‘the right way to do business;’ and the first window into the DNA of a sustainable business for analysts and diligence professionals who know nothing about sustainable business.”
A number of corporations have become corporate leaders in the quest for both profit and purpose. Below, Nicholas Krafft outlines five examples of B Corporations that are setting the bar for their industries: Patagonia, TOMS, Burton, Leesa, and Ben & Jerry’s.
In 2011, leading outdoor apparel company Patagonia was the first company in California to become a certified B Corporation. Patagonia has a B Impact score of 151.4 out of 200, making it one of the top-performing B Corps, and has been honored multiple times as a “Best for the World” honoree.
Through 1% for the Planet, Patagonia has donated over $200 million to environmental causes since 2002. Patagonia founder Yvon Chouinard told Fast Company: “We’ve made a commitment to be fossil-fuel-free by 2025. We’re invested in companies that are working on growing synthetic fibers, stuff made from plants rather than petroleum. We’re not just cleaning up our act in our own buildings and stuff; we’re going around to our suppliers and convincing them to use cleaner energy. Then we’re continuing to work on saving large areas of the planet that capture a lot of carbon.”
In solidifying their standing as a company that cares about the environment, Patagonia also secured its place in consumers’ hearts. By 2017, the company was reporting over $1 billion in sales.
TOMS is a footwear and apparel company that gained early recognition for its social commitment, but has since cemented its place as a sustainability leader as well. The company uses earth-friendly materials like plant-based dyes and biodegradable eyeglass frames, reduces waste and energy use, has committed to 100% sustainable cotton by 2025, sources 100% of its packaging from sustainably managed forests, and is continually measuring and improving its carbon footprint.
Jim Alling, CEO at TOMS said: “At TOMS we have always believed that striving to do right by the people and places we touch will not only lead to a positive social impact, but will also lead to positive business results. We are proud to be associated with the other companies that have made the commitment to operate as B Corps and we hope that many others will join us.”
Snowboard company Burton joined the ranks of B Corps in 2019, the first snowboarding company to do so. Among their many environmental initiatives, they lobby for climate policy through the Protect Our Winters initiative and they reduce waste in landfills through their Pass Along program. In 2020, Burton launched a line called One World featuring snowboarding fashion made from rPET, or recycled plastic bottles, along with a film and other content highlighting snowboarders’ environmental commitments.
Co-CEO of Burton Donna Carpenter said: “Burton has always stood for more than snowboarding… Now more than ever, companies need to step up and speak up on issues that impact the world we all share. So we’re all very proud to join the B Corp community, which shares our commitment to balancing purpose with profit.”
Mattress company Leesa was re-certified as a B Corporation in 2018 with a score of 111 out of 200, which represented an 81% increase in the environment category and a boost in other measures. The company has been committed to sustainability from its outset, and early on launched a One-Ten program where they donate one mattress for every 10 they sell. In addition, they plant one tree for every mattress sold through their One-Earth program.
The company has now donated more than 32,000 mattresses and has committed to planting 1,000,000 trees by 2025. “At Leesa, we are proud to be a company with heart and soul and will continue to strive toward making the world a little bit better than we found it,” they write following their re-certification.
Leesa’s model has attracted the attention of investors. In 2017, the startup raised $23 million from natural retailer Seventh Generation. Seventh Generation CEO John Replogle said: “To grow in the next stage, the company will have to use sleep science and design to drive for better sleep. That’s table stakes. But it helps that their core mission and brand resonate with consumers who shop beyond price.”
Ben & Jerry’s
Ice cream giant Ben & Jerry’s has been as committed to caring for the planet since its inception in 1988. The company was the first-ever wholly-owned subsidiary to gain B Corp Certification.
The ice cream company has positioned itself as a leading voice on environmental issues, turning to a startup called CoClear to measure their “life cycle analysis” and take meaningful steps to reduce their impact. Through the life cycle analysis, they learned that each pint of ice cream was equivalent to 2 pounds of carbon dioxide emissions. They are constantly innovating to make that footprint smaller, including by reducing transport time and adding new farm technologies that reduce methane from cows.
“If we’re going to engage the public about reducing their own carbon footprint, then we need to understand what our own footprint is and come up with strategies for reductions,” says Andrea Asch, Ben & Jerry’s Manager of Natural Resources.
Customers have responded with loyalty. Ice cream sales are booming during the global pandemic and Ben & Jerry’s leads the pack, reporting over 681 million in sales in 2019.
Laila Azzahra is a professional writer and blogger that loves to write about technology, business, entertainment, science, and health.