The B Corp designation is awarded to socially minded businesses that meet high standards of transparency and accountability. B Lab, the nonprofit that awards the certification, is working to build on the model’s success so that more companies adopt a mission-focused mindset.
For years, interest in the concept of the “Certified B Corp,” a corporation that reinvests its profits in work related to the social good, has gained popularity thanks in part to success stories like Kickstarter’s. Roughly 2,800 firms have the B Corp certification, some of them household names like Ben & Jerry’s and Patagonia.
Jay Coen Gilbert, the cofounder of B Lab, the nonprofit organization that manages the certification, says the future economy depends on the model being adopted more widely by more big corporate names.
“We can’t create an economy that works for everyone if the biggest companies in the economy are moving in a different direction,” he told Business Insider back in April. “That doesn’t work. One indicator of progress is this continued meaningful engagement of large publicly traded companies like Danone, Unilever, The Gap, and others, into this space.”
There’s also room for smaller organizations to earn the designation, which requires a higher level of transparency and accountability than a traditional corporation is held to. “Think Moody’s or S&P ratings, but for the impact of a business on society, not just on its shareholders,” B Lab cofounder Andrew Kassoy told Yahoo Finance.
The challenge for companies interested in pursuing the model is measuring up to B Corp standards. The application process, which is available online for free, helps companies assess their impact on their “workers, community, environment, and customers” and what steps they can take to improve. (In its case studies, the site highlights companies that didn’t do well in the assessment as much as those that did.)
But for the right organization, certification can provide a major leg up. A great example is MPOWERD, a company that creates portable solar lights, which has found ways to make its model even more appealing to its consumers—people in large countries and those in smaller ones without access to electricity.
Seungah Jeong, president and CEO of the company, told Financial Advisor that B Corp status helped encourage an approach that made the offering more affordable in emerging countries. “We have a tiered margin structure,” Jeong said. “Every domestic market retail sale allows us to reduce our prices to what’s affordable in a local emerging market.”
Coen Gilbert said one of B Lab’s major goals is to bring this sort of mindset shift to larger companies.
“We have to change the operating environment of those companies, and the way to do that is to change their orientation to being purpose-driven,” he told Business Insider.