A Better Business Model: B Corporations

Our current economic and financial systems sanction obscene excesses at the expense of society. It’s easy and therapeutic to rant. It’s more helpful, but more challenging, to propose viable alternatives. In my last three blogs, I reviewed Hazel Henderson’s, Michael Moore’s, and David Korten’s thoughtful proposals on how to repair our economic and financial systems. We also need more responsible business models, like Benefit Corporations (B Corps).B Corps are a new kind of company which uses the power of business to solve social and environmental problems.

In a little over 3 years, there are already over 370 Certified B Corporations from over 54 industries, representing $1.8 billion in collective revenues.

As described in B Corp’s press materials, “Certified B Corporations meet higher standards of social and environmental performance, transparency, and accountability. Unlike traditional corporations, Certified B Corporations are legally required to consider the impact of their decisions on their employees, suppliers, community, consumers, and environment.” B Corps reconnect company success with social progress. B Corps and society share the added value.

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This principle of shared value involves creating economic value in a way that also creates value for society by addressing its needs and challenges. In the January / February 2011 Harvard Business Review, Michael E. Porter and Mark R. Kramer advocate this notion in their article, “The Big Idea: Creating Shared Value.” As they say, “The purpose of the corporation must be redefined as creating shared value, not just profit per se. This will drive the next wave of innovation and productivity growth in the global economy. It will also reshape capitalism and its relationship to society. Perhaps most important of all, learning how to create shared value is our best chance to legitimize business again.”

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That’s why I am proud to be Certified B Corporation^TM. Although the idea of being a B Corp appealed to me when I first heard about it a couple of years ago, I did not realize until late last year that I could qualify as a Sole Proprietor in Canada. I can, and I did. There are already 18 Canadian B Corps and there is a tailored subset of Assessment questions for sole proprietors with zero employees. The adjacent report shows how my shared value contributions in the five assessment areas contribute to my Composite B Score of 151.8, which B Lab tells me is a good score. Helpfully, the report shows areas where I am strongest and areas in which I could improve. In the interest for full transparency, I will soon update my web site to include the detail behind my assessment.

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Long term, B Lab’s intent behind growing the B Corp Community is to lead to a legally recognized new corporate form, with tax incentives, procurement preferences, and a social stock exchange for sustainable businesses. It is exciting to be a member of the growing community of B Corporations who are changing the corporate landscape by being “the change we seek^TM.”

Bob