What happens to your favorite, socially responsible ice cream maker when a multinational corporation sets its sights on acquiring it? That is exactly what happened in the case of Ben & Jerry’s, and they had no legal options but to sell to the highest bidder — even if that company’s values didn’t align with their social mission.
So, how do socially responsible businesses hold themselves responsible to their stakeholders when corporate structures put shareholders and financial profit first? Enter Benefit Corporations and Certified B Corporations.
By providing legal structures that increase transparency, accountability, and performance, Benefit Corporations and B Corps are changing the way we do business.
Certified B Corporation vs. Benefit Corporation
There are two ways for companies to participate in the B Corp movement: Certified B Corporations are 3rd party certified by non profit B Lab and Benefit Corporation is a legal status administered by the state. “B Corp” generally refers to either of these types of organizations.
Certified B Corporations are companies that have chosen to seek third-party certification that their business operations are accountable to their employees, the community, and the environment. Any business can take the free assessment offered by the nonprofit B Lab, if they pass rigorous social and environmental standards, can become a Certified B Corporation.
Benefit Corporations on the other hand, integrate their commitment to the social good into their legal structure. Becoming a Benefit Corporation requires a change to the corporate charter that dictates the corporation’s operating agreement. Thirteen states have laws allowing businesses to register as a Benefit Corporation, with Maryland being the first. Learn about where the legislation stands here.
Why B Corps Matter
By becoming a Certified B Corporation and/or a Benefit Corporation, businesses show that they are committed to more than just financial growth and profitability. This classification helps businesses incorporate employees and community into their decision making processes and gives them a road map to becoming even more sustainable.
In 2010, Maryland became the first US state to pass legislation allowing Benefit Corporations and expanded this to allow for Benefit LLCs in 2011. At that time, Clean Currents was the first Benefit LLC to register in Maryland. Today there are 688 Certified B Corporations and counting, including national companies like Patagonia, Seventh Generation, and Klean Kanteen.
B Corps make a tangible positive impact in society. For example, 95% of Certified B Corporations actively recycle at least one output material, compared to only 45% of all businesses. 87 % of Certified B Corporations cover at least some of health insurance premiums for individuals compared to only 26% of other business.
For us, being a Certified B Corporation and a Benefit LLC is a symbol of our commitment to our employees, customers, and community. It shows that we don’t just talk the talk, but truly walk the walk. That’s why we’re sharing the B Corp love this month with stories on inspirational businesses, fun contests, and information about how to join the movement.