Entrepreneurs / Environment

Breaking down Kickstarter’s new B Corp status

Knowing what's behind Kickstarter's recently announced B Corp ranking is harder than it should be.

In a blog announcement earlier this month, Kickstarter announced that it had become a B Corp.

First of all, what’s a B Corp? Our sister site, Technical.ly Philly explored the national concept of “benefit corporations” earlier this year.

Here’s the quick-and-dirty from the B Corp website:

B Corps are certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency.

B Lab is a Wayne, Pa., nonprofit that certifies companies as meeting its B Corp requirements. There are 20 B Corps in Brooklyn right now.

In its post about the announcement, Kickstarter wrote:

Our mission is to help bring creative projects to life. We exist so that other people’s ideas can exist. We’ve remained independent and founder-led so that we can pursue this mission fully.

We’re also a company that cares deeply about how we go about pursuing this mission. We try to act with integrity, by prioritizing responsible governance, corporate transparency, and a respectful and inclusive work environment.

But if you want to understand what it means for any given company to have a B Labs certification relative to others, you’re going to get a little lost. Here’s Kickstarter’s 2014 scorecard. All B Corps are scored out of 200.

  • Kickstarter scored 84, four points above the minimum of 80.

What those points mean, however, are hard to sort out.

The scores are broken out into four big categories, with 18 sub-topics beneath those. B Lab publishes a median score for each category and topic, but it doesn’t indicate what the maximum potential score in each category is. It took us a phone call and two rounds of emails to find out what the max scores are for the four big topics.

In an email from B Lab, Dan Osusky, a standards associate, supplied us with the max values for Kickstarter’s four top-level scores.

Categories Kickstarter score (Max score)
Environment      10 (20)
Workers      32 (50)
Community      17 (55)
Governance      10 (15)

scored a 10 in Environment, and the median there was 9. So, it beat the median, but the median score is against all companies assessed by B Labs, and the weights of each of the top four categories are different. In other words, the max score for another company might not be 20. It could be 15. Or 25. So it’s a median that aggregates scores of companies measured by different yard sticks.

The numbers above add up to 69, as well (not 84, the company’s actual score). It’s not the only place where numbers don’t add up: the topics in Environment add up to 20 but Kickstarter scored a 10; in Workers, the scores add up to 20 but Kickstarter scored 32. There is probably some balancing algorithm in play here, but B Lab doesn’t explain that.

“We don’t just expand the denominator for every different impact business model because that would be equivalent to telling a company like Kickstarter that they should also be organic certified; it just doesn’t apply,” Osusky wrote, adding, “The scoring is structured so as to give credit to companies for what they are doing, as there are many paths to positive impact.

B Corp

(Courtesy of B Lab)

“Because of this, it is also challenging to assess a company’s performance compared solely to the total number of points available,” he said.

It also isn’t possible to figure out who Kickstarter should be assessed against among fellow benefit corporations, because B Lab’s scorecard doesn’t indicate what industry they were categorized under (we looked into that, too. TL;DR: it’s confusing).

In the end, once you dig into these numbers, all you can really understand about a given company is that B Lab thinks it meets the standards of a benefit corporation. If you want to assess that for yourself, you really can’t.

For what it’s worth, here are a few B Corps we’ve covered, along with their total scores and how long they’ve been certified as B Corps:

  • EcoLogic Solutions: 105 points, since 2011.
  • Etsy: 105 points, since 2012.
  • Farmigo: 99 points, since 2012.
  • Kinvolved: 86 points, since 2013.
  • Susty Party: 98 points, since 2008 (though cofounder Emily Doubilet tells us it was a whole different company back then).

Here’s how a company becomes a certified B Corp. In 2011, New York state passed legislation making “benefit corporations” official legal entities here. That means companies that amend their charters to officially become designated as such no longer have exclusive fiduciary responsibility to shareholders. A spokesperson for Kickstarter clarified that the company is a B Corp certified by B Lab, but not a benefit corporation in the eyes of New York state government.

Companies: B Lab / Farmigo / Susty Party / EcoLogic Solutions / Etsy / Kickstarter / Kinvolved
Series: Brooklyn

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