Good corporate citizenship is no longer a choice—it’s an expectation. Employees expect their employer’s values to reflect their own. Customers expect businesses to be good stewards of the environment and to value the safety and well-being of employees. Becoming a B Corp helps organizations check all those boxes.
B Corps are for-profit businesses that undergo a voluntary certification process outlined by B Lab, a nonprofit that sets standards for corporate accountability, transparency, and social and environmental performance. B Lab’s goal is to “redefine success in business.” With 1,000 plus b corp business operating in more than 30 countries, the movement has global reach and recognition. Ryan Honeyman, an author with expertise in maximizing corporate sustainability efforts, writes in his book, The B Corp Handbook, that certification enables businesses to become more environmentally sustainable and to build stronger communities—while simultaneously reaping financial advantages. We’ll take a look at a few reasons to become a B Corp in this post.
Reason 1: B Corps Earn Trust, Loyalty from Their Customers
Nielsen has found that 66 percent of executives believe that businesses are more committed to corporate social responsibility today than three years ago—but just 39 percent of consumers believe the same. The reason? Many consumers think business leaders care more about getting good PR than actually being good corporate citizens.
Undergoing voluntary B Corp certification enables businesses to “walk the walk.” And that goes a long way in earning trust and brand loyalty from customers. More than 50 percent of millennials describe themselves as “extremely loyal” or “very loyal” to their favorite brands. Also, about half of millennials seek out socially conscious brands and rank “authenticity” as a deciding factor in brand loyalty. So B Corp status can help businesses win both trust and loyalty.
Reason 2: Impact Investors Are Looking for Worthy Causes
By early 2017, worldwide impact investments totaled at least $114 billion, according to the Global Impact Investing Network 2017 Annual Survey. Impact investments aim to achieve social and environmental impacts while simultaneously returning a profit on the investment. And, considering that impact investments totaled just $46 billion in 2013, B Corps could be well-positioned to generate capital from the growing number of investors who share their goals to effect environmental and social change.
Reason 3: Customers Are Willing to Pay a Premium for B Corp Businesses
Customers have become more and more willing to open their wallets to support environmentally sustainable business practices in recent years. Nielsen has found that 66 percent of global consumers said they were willing to pay more for sustainable products and practices. Fifty-eight percent of respondents cited a company’s commitment to environmentally friendly practices as a key influencer, and 56 percent cited commitment to social value. Becoming a B Corp could be an efficient way to communicate both of those commitments to consumers.
Reason 4: Enjoy Synergy with the B Corp Community
Sometimes the impacts of business practices on the environment and the local community are easy to see in person—but they’re harder to quantify in numbers. B Corp Benchmarks are designed to address that challenge. B Corps submit benchmark data on overall impact scores and key performance indicators each year. B Corps can then use aggregated comparable data sets to help improve the environmental and social impact of their own action plans. Mary Cabot, the founder and CEO of footwear company Dansko, told the Harvard Business Review that the process is a cost-effective way for her company to gauge its environmental footprint. “It helped us do things we couldn’t do ourselves, like creating benchmarking models and a template for our employee manual,” she said.
Reason 5: Achieve Operational Savings by Rooting Out Waste
Energy Star estimates that small businesses spend more than $60 billion each year on energy. And making targeted investments in energy efficiency could help cut small business utility costs by 10-30 percent without sacrificing things like service, style, or comfort. Imagine what your business could do with 30 percent savings on your utility bill. And of course, the ability to reduce your business’s carbon footprint by reducing energy usage can’t be overrated.
Reason 6: Become a B Corp to Boost Employee Recruitment
A study by the PR and marketing firm Cone Communications found that 56 percent of all U.S. workers, and 62 percent of millennials, would take a pay cut to work for a socially responsible company. Simply put: potential employees seek out employers that reflect their values. And some colleges are forging ahead with loan forgiveness programs for graduates who accept jobs at B Corps. The Yale School of Management is just one example. Taken together, B Corp certification can be a great employee recruitment tool.
Reason 7: B Corp Certification Galvanizes Company Values, Strategic Vision
Discussions about corporate goals and strategic vision can make employees’ eyes glaze over. So how can organizations communicate their vision in a way that gets their employees excited? Kickstarter CEO Yancey Strickler said the company pursued B Corp certification to “bind the company and future leaders of the company to act with a set of values.” Strickler added, “If it’s just based on assessment, there’s always the opportunity to betray those values or, when you’re in a tough spot, to make a decision to compromise. We’re in a very different position now.” B corp certification allowed Kickstarter to double-down on its values and strategic vision for the long haul.
Reason 8: Lead on Environmental, Social Issues
Gone are the days when polarizing environmental issues, social issues, and cultural issues weren’t discussed in the workplace, author Mary Frances-Winters writes in her book We Can’t Talk About That At Work! Employers have to address these issues, because employees are talking about them, and they’re impacting engagement, productivity, and sense of safety and well-being. And, as we discussed earlier, companies’ public stances on these issues affect consumers’ perceptions of brands and purchasing decisions. When you become a B Corp, your business immediately becomes a leader on the social and environmental challenges that are on the minds of employees and customers alike.
Reason 9: B Corp Certification Inspires Happier, More Productive Employees
Because millennials seek employers that share their personal values, B Corp certification has been found to boost engagement by enabling employees to apply themselves to work that they truly believe in. And researchers at UCLA have found that employees at certified eco-friendly businesses were, on average, 16 percent more productive. Authors Ben Cohen and Mal Warwick explore this link between engagement and productivity in their book, Values-Driven Business: “Employees work more productively and pay more attention to a company’s profitability when they’re working for something they believe in, are treated with respect, are well paid, and receive a share of the profits. They also tend to feel better if the owner or top managers aren’t making out like bandits by comparison.”
Reason 10: B Corps Improve Our Communities
At the end of the day, the successes of businesses and local communities are often intertwined. By advancing businesses practices that strengthen our communities—from sustainability to employee wellness to diversity and inclusiveness—you can ensure long-term success for both your business and your community. That might be the greatest benefit of becoming a B Corp.
The Final Word on Becoming a B Corp
Corporate social responsibility isn’t a new topic, but the conversation has changed. Many consumers are willing to pay more to support good corporate citizens. Employees are willing to accept less pay to work for companies with values that reflect their own. Impact investors are looking for ways to make money while supporting positive environmental and social changes. And this is all good news. Businesses that become B Corps are rewarded with loyalty and trust from customers and employees, new avenues to raise capital, clearer strategic objectives and goals, and the ability to truly make a difference in communities.