5 B Corps That Are Changing the Way We Do Business

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Posted by Maren Fox - 16 March, 2018

The days of businesses operating in a bubble that insulates them from the day’s social and political issues are long gone. More than 70 percent of consumers seek out businesses with values that mirror their own. Influential investors demand that public companies do more to contribute to society. And as of 2015, one of every five dollars under professional management in the U.S.—amounting to $8.72 trillion—adheres to sustainable, responsible, and impact investing (SRI) principles. Executives used to worry that taking a stand on polarizing political or social issues would be bad for business—today, they can’t afford not to.

The rise in corporate social responsibility (CSR) in recent years coincides with a rise in companies reincorporating as benefit corporations that also hold B Corp certification. Benefit corporations are certified at the state level, and B Corps are for-profit companies certified by B Lab that include CSR objectives in their founding documents. In other words, their sole purposes aren’t just to return value to shareholders or grow their market share—they also seek to have a positive social and environmental impact. Unlike benefit corporations, which are unregulated and don’t require any specific benchmarks or reporting, B Corp certification sets benchmarks for transparency and accountability with rigorous reporting requirements. With more than 2,000 certified B Corps around the world, the benefits of becoming a B Corp are obvious. Here are five B Corp examples to inspire you and your organization.

Kickstarter: Defining the “Collective Result”

In 2015, Kickstarter reincorporated as a public benefits company (PBC) and earned B Corp certification. Lots of people questioned how a crowdsourcing platform could compete in the uber-competitive and fast-moving tech space while balancing profits and social responsibility. It didn’t take long for answers to emerge. By 2016, Kickstarter saw a 33 percent increase in visitors to its jobs page—reinforcing the idea that B Corp certification bolsters employee recruitment. In 2017, Kickstarter released its first annual benefit statement, which is a requirement of holding B Corp certification. Fast Company reported that Kickstarter paid a higher-than-average tax rate (25 percent), employed men and women equally, and paid executives less than five times the average employee (versus the 95-times industry average). At the same time, Kickstarter retained its position as the top crowdfunding platform, supporting the creation of 300,000 jobs and generating a $5.3 billion overall economic impact in 2016, according to a University of Pennsylvania study.

A portion of that success can be attributed to what The Arbinger Institute refers to as an organization’s “collective result” in The Outward Mindset. Clarifying a shared goal, or collective result, that is much bigger than everyone involved enables teams and individuals to improve their contributions. “With this understanding, people don’t require someone to align their roles relative to others; they can do this themselves,” The Arbinger Institute writes. “Every individual can decide to be this kind of contributor.”

Patagonia: Leading the Charge on Political Activism

Following President Donald Trump’s decision to reduce Utah’s Bears Ears National Monument by 85 percent and Grand Staircase-Escalante National Monument by half in late 2017, Patagonia filed a lawsuit against the President. In an editorial, Patagonia CEO Rose Marcario wrote, “Protecting public lands is a core tenet of our mission and vitally important to our industry, and we feel we need to do everything in our power to protect this special place.” Marcario also explained that Patagonia became a California benefit corporation in 2012, and that the organization’s “articles of incorporation require that we confront urgent environmental threats by investing our resources as a growing business into environmental nonprofits.” Patagonia also changed its homepage to a black backdrop with bold words, reading, “The President Stole Your Land” in “the largest elimination of protected land in American history.”

Additionally, Patagonia has been certified as a B Corp since 2011, which has positioned the company to act quickly and decisively—making Patagonia a leader on the issue. In We Can’t Talk about That at Work, author Mary-Frances Winters writes that “organizational readiness” is required before bold, decisive action can be taken on a polarizing issue. “Readiness requires a level of knowledge about differences that goes beyond your worldview. It means that you have done some study on the issues, you have listened to different perspectives, even those contrary to your own, to give you a more balanced view.” In Patagonia’s case, clearly defining organizational values throughout the B Corp process laid the groundwork for the bold, decisive action that came later.

New Belgium Brewing Co.: Social Responsibility and Market Share

New Belgium Brewing Co. proves that focusing on corporate social responsibility doesn’t have to come at the expense of profits or market share. The company earned B Corp certification in 2013 and gave ownership of the company to its workers shortly thereafter. New Belgium says that by “investing in the happiness of our coworkers, the best of the best join our team and they give their hearts.” The result? New Belgium ranks No. 4 on the list of the top craft brewing companies in the country and enjoys a 93 percent employee retention rate. Additionally, the company has spearheaded some of the industry’s leading water and energy conservation practices and has played a critical role in watershed management in its native Colorado.

How does New Belgium Brewing Co. balance financial success with CSR? It doesn’t have to. In A Great Place to Work For All, author Michael C. Bush explains that when organizations gain the trust of employees, stock market returns average two to three times higher, cumulative returns are nearly three times higher than industry benchmarks, turnover rates are 50 percent lower, and innovation flourishes. “So, high-trust workplaces outpace business rivals,” concludes Bush. Focusing on employees and the environment builds trust—which translates to better business performance.

Plum Organics: Using B Corp Status to Galvanize Values Amid Change

Plum Organics gained fame for introducing baby food pouches to the market—and for its CSR initiatives. Certified as a B Corp since 2008, the company reincorporated as a Delaware benefit corporation in August 2013 with the dual goals of generating profits and creating a “brighter future for our little ones” through positive social and environmental impact.

Given that Plum Organics was acquired by the Campbell Soup just a few months earlier, the timing of the reincorporation raised some eyebrows. Plum Organics’ chairman and co-founder Neil Grimmer said the moved helped communicate to employees, consumers, and its corporate parent company that its values wouldn’t change—despite massive changes elsewhere. "It helped to shore up that understanding," Grimmer told The Washington Post. He added that Campbell understands that CSR is not “about trading off profitability. When you authentically do good in the world, that engages consumers who then vote with their dollars." Plum Organics demonstrates that, amid change, B Corp status can be a steadying force for loyal employees and consumers alike.

Cabot Creamery: Taking Century-Old Values to the Next Level

Cabot Creamery has been a farmer-owned dairy cooperative since 1919. Richard Stammer, the cooperative’s executive senior vice president of special products, wrote in the Harvard Business Review that he was skeptical of pursuing B Corp certification in 2012 because the cooperative has “self-monitored” its sustainability practices for generations.

Stammer relented and was surprised to find that certification not only answered questions for retail partners about sustainability practices, but also “delivered value beyond our expectations.” It encouraged the nearly 100-year-old cooperative to engage in “whole-systems thinking” in regard to social and environmental practices, “which led Cabot to develop even more robust customer and consumer programs, cut operating costs, and strengthen our brand reputation as a sustainability-minded company.” What does the story of Cabot Creamery demonstrate? That B Corp certification can help improve the impact of corporate values—even when those values are a century old.

The Final Word on Changing the Way We Do Business


More and more, employees, consumers, and investors are expecting businesses to have positive social and environmental impacts. Returning value to shareholders and growing market shares are no longer the sole determinants of success—they’re just part of a larger equation. Kickstarter, Patagonia, New Belgium Brewing Co., Plum Organics, and Cabot Creamery are just a few examples of how B Corps are changing the way we do business. By using shared goals to improve productivity, leading on environmental issues, valuing employees and creating inclusive workplaces, and reaffirming commitments to long-held beliefs, these companies have improved themselves—and the communities they serve.

 

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Topics: B Corp, Your Organization


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