SEATTLE, Washington — Traditional companies are legally obligated to make decisions that solely maximize shareholder profit. An incorporated entity designed to benefit the public interest alongside shareholder profit is called a Benefit Corporation. Now, a new structure is gaining a foothold and it could improve thousands of lives. The B Corp certification ensures all stakeholders are given first priority in company decisions.
Entrepreneur Magazine says the rise of B Corp certification is rooted in a vision to objectively impact global society for the better. The major difference between a B Corp-certified business and Benefit Corporation is that the former is independently certified, while the latter is legally incorporated. Benefit corporations have the certification goals built “into the DNA of the corporation,” as Conscious Company Magazine describes it.
B Lab is the nonprofit which develops the metrics of certification, the tools to analyze them in the business, and provides the B Corp certifications. While Benefit Corporations do not have to undergo third-party certification, they still hold themselves to the same transparency standards.
Similar to the concept of Corporate Social Responsibility, B Corps use accountability standards to require organizations to consider the impacts of their actions. They must consider how their actions will affect employees, customers and communities all along the supply chain. Additionally, they must also consider the environment at all stages of production. For example, the company would pay more for waste disposal services in order to conserve the environment.
In addition to a thriving North American scene, B Corps have spread throughout the world. In developing regions, B Corps can make a difference in a direct way. These regions are facing large levels of population growth over the next century, and communities in Asia, Africa and Latin America are home to numerous B Corps.
As of March 2016, Asia accounted for 60 percent of the world’s population. Asia also has 69 percent of the world’s impoverished and 44 percent of the world’s carbon dioxide emissions. These factors make Asia a prime location for the growth of corporate consciousness. B Corp Asia states that there are currently 25 B Corps in Asia, in Taiwan, Mongolia, China, South Korea, Singapore and India.
One of the prime directives of B Corp certification is to encourage environmental sustainability. In India, Servals Automation is a manufacturer of green energy products for cooking and lighting in rural areas, such as stoves that run on vegetable oil. In Hong Kong, Insight Robotics is a risk management and data analysis firm investing in people and the planet by using robotics. For example, its Wildfire Detection Robot works to protect 1,300,000 hectares of forested land from destruction. In South Korea, General Bio creates environmentally-friendly cosmetic and cleaning products.
The other directive of B Corp certification is to protect and promote society-wide growth. Since 1986, the Taiwanese accountancy firm Jia-Wei has worked to combat the nation’s “culture of overworking.” In Singapore, disabled people make up 80 percent of Genashtim’s workforce. Additionally, the company believes in eLearning as a means of connecting people while reducing consumption of natural resources and emissions. Finally, the New Media Group in Mongolia was the first certified B Corp in the region. It supports international organizations working to help people around the world.
Africa is another prime location for a growing B Corp movement. U.N. projections indicate that the continent will be the location of more than half of global population growth up to 2050. After that point, Africa will be the only location experiencing continuous population growth.
There are already some B Corps on the continent. The first certified African B Corp is Juhudi Kilimo, a microfinance institution in Kenya. As of 2013, the organization has helped more than 11,000 clients and wields an investment portfolio of around $2 million. The company sees the certification as highlighting inclusive business models to provide a market-based solution to the challenges Africans face.
In Latin America, there are 1,079 B Corporations, or “Empresas B” in 34 countries and across 60 industries. Sistema B is the organization that certifies B Corps in the region, working closely with B Lab to adapt the certification metric to each country. In Brazil, Natura Cosmeticos S.A. is the largest cosmetics company in Latin America. It separates itself from competitors by using Brazilian floral biodiversity and sustainable practices. Additionally, it attempts to limit emissions from its transportation network by moving products by sea instead of air.
According to Good Magazine, Sistema B co-founder Juan Pablo Larenas expects the use of B Corp certification to improve access to capital and to promote economic inclusion.
B Corp certification brings people together to change how business works. Internally, the certification attracts employees who want their company to put stakeholders above profits. Externally, stakeholders in supply chains and communities benefit from the synthesis of public interest and private gain.
– Lucas Woodling