The Guide to B Corporations

How can companies prove to consumers that they truly intend to use "business as a force for good?"

They can join the Benefit Corporation movement by incorporating as a Benefit Corp and pursuing B Corp Certification. However, what's the difference? Here's a summary of B Corps and how to find them.

What is Public Benefit Corporation?

This is a legal structure. For-profit companies that want to prioritize social and environmental missions, along with profits, incorporate as Benefit Corps. Companies are legally-binded to benefit employees, communities, shareholders, and the planet - regardless of any leadership or external pressures the company may face.

Benefit Corps pay taxes as regular for-profits. In addition to value generation, three other major standards are emphasized:

  • Purpose: Companies seek to have a positive impact on social and/or environmental missions.
  • Accountability: Companies are legally accountable to consider the impact of their decisions on the triple bottom line: people, planet, and profits.
  • Transparency: Companies communicate social and/or environmental performance, business practices, and operational decisions, publicly.
Source: Benefit Corporation

Source: Benefit Corporation

Benefit Corp legislation is at the state level. It was first passed in Maryland in 2010. Almost seven years later, it is effective in 31 states. Today, there are more than 3,500 Benefit Corps in the U.S.

Are Benefit Corps the same as Certified B Corps?

No. Any type of for-profit business can pursue B Corp Certification, which verifies that they meet a certain threshold of rigorous standards of the categories above (social and environmental purpose, transparency, and accountability). In other words, Certified B Corps are the cream of the crop. 

Patagonia was the first B Corp to earn B Certification in California. Photo: Patagonia

Patagonia was the first B Corp to earn B Certification in California. Photo: Patagonia

This certification is led by B Lab, a Pennsylvania-based non-profit. B Lab administers B Impact Assessments biannually to assess and certify the B Corps. It examines impact on social and environmental missions, as well as performance on accountability and transparency. They key here is that this assessment evaluates companies as a whole - rather than simply assessing one product or one program.  

The results are summarized in B Impact Reports, which are like scorecards. They're compared to other companies and even provide recommendations to improve practices. Here's an example. This B Impact Report is for method, an innovative San Francisco-based company of conscious home and personal care products.

The certification is not free. It can costs $500-$50,000 per year, depending on company revenues. Ideally, Certified B Corps are also registered as Benefit Corps. If they are not, they must incorporate as Benefit Corps within a certain time period.

How can I find them?

Registered Benefit Corps can be found in the Benefit Corporation database. Certified B Corps can be found in B Lab's Directory. If you want to work at B Corps, B Lab has you covered. This job board lists available positions at B Corps across the U.S.

Want more?

There's tons of resources out there about the B Corp movement. B Lab's B Corp Handbook is a great start. 

Anairis Hinojosa