The Why
There is an emerging business model shaping the next economy. You may hear it called purpose-driven, conscious capitalism, conscious brands, stakeholder balance, triple bottom line, or for-benefit business. Whichever name you like, one of the many factors contributing to its shaping the next economy is the largest transfer of wealth in human history taking place from Baby Boomers to Millennials. And Millennials are going to spend that wealth (along with their time and talent) on businesses embedding positive impact.
Many companies are pursuing this business model and seeing real and lasting results. Others are riding its coattails by “greenwashing;” marketing themselves as if they generate positive impact while operating in ways that do not. So how do you make the investment, generate the best impact, and make sure your stakeholders know it’s authentic?
One of the most effective ways is to become a Certified B Corp (B Corp). It sets your business apart and lets consumers know you are truly a conscious brand generating positive impact. While you don’t have to be a B Corp to be a driver in conscious capitalism, there are some advantages:
- Certification standards inherently reduce financial risk and improve long-term profitability
- Greater survival rates during economic downturns
- Stand out among competitors who may greenwash
- Join a network of like-minded businesses
- Build your business’s foundation for success in the next economy
The What
Certified B Corps function as a network of companies driving the next economy forward by generating positive impact. They are for-profit businesses certified by the nonprofit organization B Lab for taking measures with customers, employees, governance, the community, and the environment to generate positive impact. Certified B Corps can be LLCs, LLPs, S Corps, C Corps, or any other form of business to qualify. However, companies in states with benefit corporation legislation must file as a benefit corporation within a certain time period of becoming certified (look up your state here).
The How
Start with the B Impact Assessment (BIA), which assesses your business in five categories: workers, community, environment, governance, and customers. Your business must score at least an 80 out of 200 possible points to become certified.
While this may sound easy, many companies do not earn 80 points on their first attempt. The BIA is designed to ensure high standards and maintain the certification’s credibility. Be prepared to take your first pass at the BIA as an initial assessment to understand where you might improve. For instance, even just documenting informal, undocumented positive practices could help increase your score.
Once you complete the BIA with a score of 80 or higher, B Lab will make documentation requests and may perform an audit of your company. For those that don’t score 80 right away, B Lab offers a simple planning tool for setting and making progress toward improvement goals.
A few tips to help you succeed on the BIA:
WRITE IT DOWN.
Many businesses committed to positive social or environmental impact have informal, undocumented practices that support their commitment. The more you have in writing, the better prepared you’ll be. (For instance, a mission or purpose statement, certain employee benefits, hiring practices that support improved DEI, etc.)
Establish a team.
The BIA is a rigorous policy, practice, and operations tool that can be used for the continuous improvement of your organization. There will be information to gather, unwritten practices to be captured in writing, and questions about the business to be answered. Establishing a team internally and/or hiring a Certified B Corp consultant will help you move through the process smoother and faster.
Prepare for a process, not a test.
Your first pass at the B Impact Assessment will likely provide your baseline; a starting point to build on. Stay in the process and the reward of becoming a Certified B Corp will be immense and long-lasting. Value will span facets of your business from revenue and profit to talent and employee engagement; from customer loyalty to a healthier stakeholder system to operate in.
Ready to explore becoming a Certified B Corp?
New Commodity can help your team complete the BIA, gather information, and get all the “unofficial” positive practices you’re already following into writing. Contact us for more information or to schedule a consultation.
If the B Corp path isn’t right for your business today, there are other ways to embed positive impact into your operating model. Join the New Commodity community for more on building your business’s foundation for the next economy.
