If you’ve scrolled to the bottom of the webpages of equity-minded companies, you’ve likely come across a note on B Corp certification.
The name “B Corp” refers to a designation companies receive for prioritizing the impact of their company across all fronts. Companies receive a B Corp certification after meeting specific performance, accountability and transparency standards. Becoming one means prioritizing public good, employee benefits, charitable giving, supply chain practices, materials and more to create an equitable and regenerative economy. Companies get certified by the nonprofit B Lab, which has locations in Berwyn, Pennsylvania and New York City, New York.
Associate Jordan Lee of Maryland’s Bethesda Green, an accelerator and incubator program which also helps companies with certification, noted how B Corp credentials involve more than just upping your sustainability efforts.
“B Corporations are also unique because they measure their company’s entire social and environmental impact,” Lee told Technical.ly. “B Corp certification is holistic, not exclusively focused on a single social or environmental issue.”
Thus, certification is a little more complicated than just declaring your intentions. To become a B Corp, companies need to:
- Achieve a B Impact assessment score of 80 or above, and pass the risk review
- Change or alter their corporate governance structures so that they are held accountable by the company’s stakeholders
- In Maryland, Virginia and DC, companies also need to become benefit corporations — which basically means they have the duel purpose of promoting the public good and turning a profit
- Ensure transparency by allowing their performance info to be publicly available on the B Lab website, through their B Corp profile
Getting a B Corp certification can take anywhere from three to 12 months from start to finish, and companies must pay annual certification fees following approval. These fees can range from $1,000 to $50,000 depending on the company’s size.
To help with the process, Bethesda Green and the Best for DMV Campaign offer 101 workshops, while the former entity provides a B Corp consulting program. Being a B Corp, Lee said, means committing to a focus on continuous improvement, which (hopefully) increases resiliency. She also mentioned a few additional benefits for the individual company, including joining the global network of 5,000 B Corps.
“Beyond improving a company’s impact on people and the planet, B Corps certification has tangible benefits for the company itself,” Lee said. “B Corps build trust with consumers, communities, and suppliers; attract and retain employees; and draw mission-aligned investors.”
In addition, she said that companies can:
- Promote their business with the B Corp certification
- Receive additional legal protection from corporation status
- Receive other stockholder rights by ensuring accountability, thus attracting impact investors
- Attract talent
- Attract additional private investment
Still, Lee cautioned that becoming a B Corp is a commitment, as it involves documentation of business model, operations, structure and various work processes — and might include site visits. Plus, companies must undergo a verification process every three years to maintain B Corp status.
“Companies that want to become B Corp-certified need to be fully committed to improving their impact on the environment, workers and community,” Lee added.
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