B is for B Corps

Kristen Taylor ( Bio  /   Posts )  |  Monday, December 07, 2009 UTC

Last week, Lucy Bernholtz, president of philanthropic consulting firm Blueprint Research & Design, spoke with Marketplace (download the audio from the link) on “Philanthropy’s Big Buzzwords of 2009.”

Between impact investing and mergers, Bernholtz talked about B Corps, the designation for businesses holding a social good certification (think LEED for social enterprise) from a group called B Lab.

B Corps screenshot

Of the 240 businesses are certified in the U.S. as B Corps, nine in Philadelphia have an additional reason to pay a tenth of 1% of their net sale to hold the certification. Last Thursday, Philadelphia’s City Council unanimously approved a bill to give a sustainable business tax credit to certified sustainable businesses in the city. The first financial incentive for sustainable businesses in law in the U.S., the new bill allows twenty-five companies in Philadelphia to receive the tax break.

Co-founder of B Corporation, Jay Coen Gilbert describes amending a company’s articles of incorporation to include B Corps “changing the DNA of a company.”

Individually, each certified company is a B Corp—together, they are B Corps.

As the “corps” entry in the online dictionary Wordnik (watch Wordnik Founder Erin McKean’s 2006 PopTech talk) aggregates definitions, synonyms, images, tweets, tags, and etymologies about different meanings and content around the term, we hope that sustainable businesses for social good will continue to find new reasons to become, as the American Heritage Dictionary defines “corps”: “a body of persons acting together or associated under common direction.”

Tags:

Rate this post:

  • Meh.
  • Love it!
  • Community Rating: 7
Click and drag above to vote.

Comments

Name: Dave Rapaport

B Corps recognize that corporate social responsibility must be imbedded as a part of the fundamental purpose of business, not simply an ancillary concern. The old notion that the purpose of business is business and that CSR conflicts with financial objectives (at worst) or can only be justified by a business case (at best) cannot create the change required to solve the many crisis facing us, and ignores the fact that the origin of these problems is inherent in the very idea that business can somehow be detached from the impacts it has on society. An important aspect of B Corp certification is that businesses must change their by-laws to expand the responsibilities of the corporation to include the interests of employees, consumers, the community, and the environment.

Name: Kristen Taylor

Thanks, Dave. Thinking about B Corp certification as expanding the responsibility is a great way to understand the step more fully—

Name: Jay Coen Gilbert

If we want a New Economy, we’ll need a new kind of corporation.

B Lab, the nonprofit that certifies and supports B Corps, is working in several states (VT, PA, CO, NC) to create a new legal entity called a For Benefit Corporation. This would legitimize and accelerate development of a New Economy by giving legal recognition to companies meeting higher standards of corporate purpose, accountability, and transparency.

Legal recognition serves as a platform for policymakers to follow the lead of Philadelphia in providing a variety of tailored tax, procurement, and investment incentives for private sector businesses addressing public benefit objectives.

Incentives will help, but this New Economy will also require growth capital.

That’s why B Lab is also working with a group of institutional investors like JPMorganChase, Prudential, and the Rockefeller Foundation to use the standards used to certify B Corps to help them drive investment dollars to higher impact investments. B Lab’s Global Impact Investing Rating System (GIIRS) will be used by these large investors to measure and communicate the social and environmental impact of their private equity and debt investment portfolios. Think S&P ratings for social and environmental impact.

As Prudential’s Preston Pinkett said, ’There is an opportunity for this (GIIRS) to be a game changer. If it is, it will change the way people think about how to make investment decisions, and that would be monumental."

Add your comment

No HTML or JavaScript, please.

Keep in mind, your comment may take up to 15 minutes to appear if approved.


(Not shared or displayed)