Over 3,600 B Corp-certified companies spread across 150 different sectors in more than 70 countries, total revenue of over €16 billion, and more than 54,000 employees: These figures prove that B Corps are not merely a passing trend, but now a well-established type of corporation.
This is hardly surprising given that the rationale behind the very topical B Corp phenomenon is consistent with the emerging vision of the Sustainable Development Goals (SDGs) set out in the UN’s 2030 Agenda: the inescapable interdependence between development, economic growth, social inclusion and environmental protection.
With the 2030 Agenda, even the financial world, the ugly face of the economy, has realized that a vision exclusively focused on the market or profit is no longer adequate to ensure global stability. The latter is a much more complex phenomenon since it is affected by both human and environmental changes.
In recent years, the consequences of a short-sighted approach to these delicate balances have become abundantly clear: natural disasters, droughts, migration and conflicts are just a few examples.
This awareness has led to a need to develop a new economy, reformed capitalism that is no longer the prerogative of shareholders, but generates value for all stakeholders, and which, far from solely focusing on financial results, also and above all addresses human and environmental considerations.
In this new scenario, businesses have a key role to play as economic drivers, a role that Kofi Annan, serving as secretary-general of the United Nations, recognized back in 1999 when he called on business leaders gathered in Davos “to embrace, support and enact a set of core values in the areas of human rights, labour standards, and environmental practices.”
His words almost prophetically prefigured the speech given by Pope Francis in Davos this year, presenting the revolutionary theory of integral ecology.
B Corps should be placed precisely in this context and in this vision of a new economic model of sustainable development.
But what exactly are they? Let’s take a look together.
What does B Corp mean?
B Corp is the abbreviation used to refer to Certified B Corporations. According to a definition by Nativa, companies that decide to obtain this certification want to “spread a more evolved and regenerative business paradigm”. What does that mean?
It means that these companies are not solely pursuing profit, but are committed to ensuring that their actions have a positive impact on society and the environment. The letter “B” stands for “Benefit”, i.e. companies’ willingness to contribute to the common good of society. The goal is to generate more output value than the input resources and value consumed to run a business, surpassing the old “extractive” model and offering younger generations a better and healthier alternative to the current approach.
B Corp certification is issued by B Lab, a non-profit organization founded in 2006 in Pennsylvania with the goal of accelerating the paradigm shift already underway in the business world. The transformative mission of these companies that believe in servant leadership is to change the world by putting their business at the service of humanity’s great challenges in order to redress inequality, climate change and social unrest and to find solutions to the current aporias of traditional capitalism.
By obtaining B Corp certification, a company demonstrates its commitment to social and environmental issues, proclaiming itself an agent of change and champion of a new, fairer and more sustainable economic system.
The process for obtaining certification is based on the strictest social and environmental standards in the world. Social and environmental measures and indicators are treated with the same importance as economic KPI monitoring.
It is first necessary to fill in the BIA (B Impact Assessment) that B Lab provides free of charge on its website. This is a company performance self-assessment questionnaire divided into five main areas: environment, workers, community, governance and market.
If the outcome is a final rating of at least 80 out of 200 points, the company can start the validation process, i.e. undergo an audit conducted by the third party B Lab. This is an additional check carried out on the data and the production of objective evidence which allows the company to obtain official recognition as a B Corp-certified company and, consequently, to use the prestigious logo on its products and services, rightfully entering the global B-community.
Having clarified what constitutes a B Corp, we must also shed some light on the distinction between B Corps and benefit corporations, which are often confused.
What is the difference between a B Corp and a benefit corporation?
Like B Corps, benefit corporations strive to look beyond profit in order to have a positive impact on society and the planet. The main difference between the two is that B Corp is a certification issued by a non-profit body, whereas benefit corporation is a legal form.
Consequently, while any private company in the world can aspire to evolve into a B Corp-certified company, becoming a benefit corporation is only possible in countries that have a law that regulates and recognizes this business legal form, such as Italy.
Italy was the first country in Europe to introduce this legal form governed by Act No. 208 of 28 December 2015 (the 2016 Stability Act) Art. 1, Paragraphs 376–384, which came into force on 1 January 2016. Italy is also the country where the number of benefit corporations is growing at an unprecedented speed compared to other nations.
Moreover, while B Corps’ performance is verified and certified by B Lab using the criteria above, benefit corporations are required to self-certify their performance based on a universally recognized metric, and then to prepare and publish a report that outlines their overall impact. In both cases, transparency is one of the key principles underlying these new sustainable businesses.
There are also differences concerning the audits that these companies must undergo: every three years in the case of B Corps, which are required to renew their certification at this interval, and on an ongoing basis in the case of benefit corporations, but only with regard to transparency criteria.
Finally, B Lab offers services and support to all certified B Corps, including use of the “Certified B Corp” logo on their products and services, which are not available to benefit corporations, and charges various fees that amount to an annual rate of between €500 and €50,000 in the case of B Corps, depending on the company’s revenue, as opposed to notary fees for amending the articles of association, which is the sole charge for benefit corporations.
Why should a company become a benefit corporation?
Embracing the benefit corporation philosophy means becoming part of a bigger picture, giving your business a higher and nobler purpose than mere profit in order to start generating value, well-being and shared benefits for the world.
Way2Global, represented by its Founder & CEO Laura Gori, has always believed that “doing business means having an idea and transforming it into value for others”, and that the entrepreneurial vocation is both a burden and an honor, which should be pursued with a heartfelt, rather than money-oriented, approach. Because a true entrepreneur’s mission is to unleash and nurture talents, to help people evolve into their best selves, and to contribute to the well-being of the community and the local area.
The decision to become a benefit corporation stems from a generous and altruistic vision of solidarity, openness, sharing and the common good, which starts with a commitment: “Start by giving”.
Now more than ever, at a time when the Covid emergency demands that we make a collective effort to restore, rebuild and relaunch, embracing the benefit corporation model is a way for companies to pool resources, knowledge and initiatives and become leading actors in the process of social renaissance.
The pay-off is unparalleled satisfaction, along with the pride of feeling like a vanguard of transformative social innovation and an agent of change. Toward a healthier and fairer business model, which also contributes to accelerating processes, development and economic growth.
In closing, we would like to answer a question that many may be asking themselves:
Can a company be a benefit corporation and a B Corp at the same time?
Certainly. It is up to the company to decide whether to embrace both models or just one.
Companies take many different paths: some obtain B Corp certification and then, within two to three years, are obliged to change their legal status to that of a benefit corporation in order to maintain their certification. Others become benefit corporations by amending their articles of association, but do not plan to apply for B Corp certification. Finally, there are companies – like us at Way2Global – that start out as benefit corporations and then decide to become B Corp-certified to fully embrace this revolutionary vision of business, which we believe is the only regenerative development option available to us today.
To find out more, visit the page on our “Made in B Italy” project.