The B Corp: an ethical way of doing business
By BEL JACOBS
Capitalism is broken, driving global inequity and environmental destruction to fatal limits. But hope is not lost. Springing up n the gap between altruism and profit, a new type of company is using the power of business to solve problems, not make them worse. Enter the B Corp, an organisation that hits the very highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.
Awarded by American non-profit B Lab, it’s a notoriously difficult certification to achieve. From the supply chain and input materials to charitable giving and employee benefits, every inch of a company’s social and environmental performance is assessed, scored, assessed again. But, contrary to popular perceptions, none of this comes at the expense of being a thriving, profitable business. Take a look at some of today’s B Corps and you see industry leaders, pioneers in both innovation and ethical practice.
Take a look at fashion B Corps and you see pioneers in both innovation and ethical practice. Picture: Patagonia.
Examples? Ben & Jerry’s, Patagonia, Kickstarter, Eileen Fisher, Mud Jeans, JoJo Maman Bébé and Abel & Cole. As North America CEO for sustainability strategy and communication first Futerra Freya Williams told the Times. “Sustainability and social purpose are so often perceived as the enemies of profit, though these companies show it’s actually driving their growth, not damaging it,” “You can’t just introduce sustainability and expect it to pay off. But when you make it your North Star, that’s when the business case comes together.”
Certified B Corporations and benefit corporations are “part of a much broader global movement of people using business as a force for good …,” says Jay Coen Gilbert, Co-Founder of B Lab. “We are at the early stages of a Capitalist Reformation. The doctrine of shareholder primacy is a form of oppression … The new system serves a 21st century model of leadership whose purpose is to create value for all stakeholders, not just shareholders.“ Elvis & Kresse make luxury accessories from reclaimed materials such as decommissioned firehose and leather offcuts; Outland Denim offers ethical employment and training to women rescued from human trafficking and exploitation to make. For February B Corp month, I spoke to founders Kresse Wesling and James Barton on the joys of being a B Corp.
Is the B Corp the future for business?
Wesling: One of the biggest reasons why the capitalist system has been harmful is that the shareholder is king; businesses are legally obliged to do everything they can, within the law, to generate profit for shareholders. There have never been enough robust international laws to prevent some businesses from behaving like complete psychopaths. To be a B Corp, you have to promise continual improvement and, when you first re-certify you have to change your constitution to state that shareholders are not more important than the planet and its people. If this were law for all businesses, we wouldn't have the exploitation and environmental degradation we have now. This is huge. As a B Corp, you can't profit at the expense of future generations.
Barton: In the short-term, yes, as it not only guides businesses in the right direction, but also serves the customer. The B Corp certification is recognised and trusted around the globe, and this kind of recognition and trust is essential to ensuring a conscious purchase is an enjoyable experience. But in the long term, businesses that are not harming people and the planet should not need a stamp of approval. It should go without saying that the things we buy have not caused harm.
Describe the transition.
Outland Denim offers ethical employment and training to women rescued from human trafficking and exploitation to make. Picture: Outland.
Wesling: Elvis & Kresse was established to solve environmental problems and has always had an ethical DNA. However, the B Corp certification looks beyond business model, supply chain and environmental commitments to governance and structure, and it makes sure your values are entrenched. We’ve learned a lot about making our existing values binding for any future shareholders or owners.
Barton: [The transition] involved identifying areas of strength as well as opportunities and areas that could prove a weakness as we scale up. We invested heavily in the talent and time we felt the process required. Our Impact and Advocacy team continuously investigated our supply chain from the cotton farm right through to the courier, to make sure the success of Outland Denim and our seamstresses does not come at the expense of other people or the planet.
How has being a B Corp changed the culture of your business?
Wesling: There’s a surge in environmental and social awareness and consumers are constantly looking for brands with purpose. It’s a great time to be purposeful but [there are] companies are adopting the language without the actions [and] this is dangerous. Trying to solve environmental and social problems are big commitments, not marketing spin. The robust B Corp certification helps solve this problem, separating doers from talkers. It hasn’t changed our own culture much but it’s helped our small team feel they are an important part of something much bigger.
Barton: Becoming a B Corp - and the first denim brand to become a B Corp in Australia - was an incredibly proud moment and something we really celebrated. We have always been confident in our policies and practices, but it was great to receive validation from the B Corporation assessment, as it is such a rigorous and detailed analysis. The Certification is a sign that our approach is more than greenwashing. The requirement to reapply for certification every two years provides the opportunity to continuously improve. The certification also offers a level of accountability not offered by other certification bodies - in that B Corporations are legally required to consider the impact of their decisions on the workers, customers, suppliers, community, and the environment.
Describe the B Corps community.
Wesling: It’s a lovely community of supportive businesses all on the same journey. We may never be perfect, but we are striving to be, and we love to celebrate and cheer each other on.
Elvis & Kresse make luxury accessories from reclaimed materials such as decommissioned firehose and leather offcuts. Picture: Elvis & Kresse.
Barton: In becoming a B Corporation, we have been welcomed into a community of like-minded brands we admire and support, both personally and as an organisation. There’s a strong sense of collaboration over competition. And, unlike some other certifications or accolades which may place focus on one particular area of sustainability, B Corp places equal weight on social impact and environmental impact, from the raw materials phase all the way through to the company's HQ.
What advice would you give other brands considering becoming a B Corps?
Wesling: Go and meet some current B Corps. Talk to them about their journey and why it is important to them and their teams. Find out why it is hard - and should be hard - but ultimately unbelievably rewarding.
Barton: Pursue the certification; it’s a great, global community to be a part of [but] don’t just see it as another logo or certification for your website footer. It’s a chance to learn as a business and a team about your strengths, weaknesses, and opportunities to do even more good in the world.