B Lab provides refuge for sustainable enterprises
In a world where seemingly every company is touting its green credentials, how can consumers and investors determine which claims are legitimate and which ones are merely greenwashed?
B Lab believes it has the answer. A nonprofit organization, B Lab provides an infrastructure for building and maintaining a sustainable and socially responsible enterprise. The organization has already garnered attention from publications such the as The New York Times and Inc.
“We came to the conclusion that there needs to be a new legally recognized type of corporation that addresses the social and environmental challenges currently in front of us, using the power of business,” said Bart Houlahan, one of the cofounders of B Lab and former president of AND 1 Basketball.
The goal of the B Corporation designation is to define standards, to set accountability and to provide a collective voice for socially responsible companies and organizations. (The B stands for benefit.)
To become a B Corporation, companies must meet two main criteria. First, the organization must meet a set of transparent and comprehensive performance standards. B Lab utilizes a survey that measures a corporation’s impact on employees, community, environment, consumers and governance and assigns a rating. A company must rate no lower than 80 out of 200 points on the survey to meet the requirement (the average score is 90).
Second, corporations agree to be held accountable to a higher level of legal responsibility for their stakeholders, so that they are not exclusively focused on shareholders. In doing so, a company’s actions are protected from liability so that it can maintain its environmental and social mission. For instance, a shareholder would not be able to file a suit against a B Corporation because it used more expensive environmental processes in manufacturing. Likewise, it gives shareholders the power to hold a business accountable and ensure that its mission survives changes such as new management or new ownership.
Once certified, a B Corporation can use B Lab intellectual property to speak with one voice, unifying the charitable, environmental, free-trade and employee-focus markets.
So far, B Lab has certified about 130 emerging companies. Newly minted B Corporations include Reece Computer Systems, an information technology provider, and Kusikuy Clothing Company, an eco-ethical clothing maker.
“We enjoy every day coming in and seeing who has added their name to the list of 3,300 companies (who have completed surveys), because you would be surprised to see the size of companies and breadth of industry who have used that survey as a guideline, as a template, as a roadmap.”
To take the B Corporation survey, visit http://www.bcorporation.net.
