You may have heard about B Corporations or seen their logo but are still unsure what they are. In short, B Corps are “certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency.” Companies undergo an assessment and, if they meet a certain threshold, are given the B Corp stamp to let their customers know that their business is a force for good.
Here are six reasons all founders should seriously consider becoming a Certified B Corporation.
You’ll make more money
Make no mistake, B Corps are pro-business and pro-market. They’re also pro-environment, pro-good governance and pro-workers. These things are not mutually exclusive. In fact, Accenture, Goldman Sachs, Harvard Business Review, and others, have all concluded that building a sustainable business is good for business. Conscious Capitalism founder Raj Sisodia found that highly conscious companies outperformed the S&P 500 by a 14-to-1 ratio over a 15-year period. A recent Nielsen report concluded: “Commitment to social and environmental responsibility is surpassing some of the more traditional influences for many consumers. Brands that fail to take this into account will likely fall behind.” Being more environmentally and socially conscious can also cut costs—for example, reduced energy use initiatives save money and can pay for themselves over time, providing better pay and benefits and creating a supportive work environment can help reduce employee turnover and save money on recruitment and training costs. Need more proof? Check out the Honest Company, Patagonia, Kickstarter, and many other Certified B Corporations that are doing very well by doing good.
You’ll build a better business
The B Lab assessment is intended to get you to think and to nudge you to implement practices that are good for your business. Greater diversity, transparency and open communication channels between employees and leadership are all things the assessment scores your business on. These practices are proven to increase team effectiveness and efficiency.
You’ll be part of the family
The most successful startups forge partnerships with other established businesses. As you search through LinkedIn looking for the right person to ping and the right angle to introduce yourself, chances are there’s somebody from a Certified B Corporation that can help you along. Once you get the B stamp, you’re part of the family – a special club whose members have shared interests and goals. Becoming part of the B Corps network will open doors for business development, mentors, advisors, and even investors.
You’ll appeal to a fast growing consumer segment
If you’re like many entrepreneurs, your slide deck includes a hockey stick in which the key to your business model is appealing to millennials. If that’s true than you really can’t ignore the fact that young people are increasingly factoring a company’s social impact into consideration when making their purchases. A 2014 report from the Boston Consulting Group said that one of the best ways for companies to connect with millennial consumers is by “convincing millennials that they are ‘doing good’ when they purchase its brands. Companies need to demonstrate through their values, heritage, and meaningful actions that they help those in need, are socially responsible, are good environmental stewards, protect personal data, or are transparent and sincere.” They say that millennials have greater brand loyalty towards “good” brands and are more likely to serve as evangelists. As millennials’ buying power nears $1 trillion, you really can’t afford not to have an authentically good business.
You’ll attract and retain talent
People are looking for purpose in all aspects of their lives. By developing a culture where everyone’s striving to achieve an impactful outcome, you’ll give your employees a reason to be excited to come to work each morning. Study after study shows that providing an opportunity to make a difference in the workplace often outranks pay as a motivating factor for young job seekers.
You’ll be cool
Let’s face it, shaking things up is fun. And what’s more disruptive than bucking centuries-old economic theories that espouse maximizing short-term profit as a business’s only objective? The success of B Corporations has already begun to turn this old way of thinking on its head.
You’re a founder. You’re already a little crazy and you like disruption. So take it to the next level and 10 years from now when becoming a B Corp is much more commonplace you can say to your friends, “We were a B Corp before it was cool!”
If your interest is piqued and you’re ready to take the next step to becoming a Certified B Corporation, check out the B Corp Handbook to learn more and visit their website to start the assessment and get the ball rolling.
We at DoneGood would also like to hear from you and to help get your social mission in front of conscious consumers. Let us know what you’re up to, and let’s work together to be the generation that defines business, not only as an engine to maximize profit, but also as a force for good.