To B or not to B: B Lab Expands its B Corp List and Service Partner Program

bcorp.JPGThe folks at B Lab have been busy since we last featured the independent certification group here. There’s the new website, the new video shot by Tri-film, the quarterly newsletter, and several new certified B Corporations. Currently 124 companies across 31 industries have attained the B Corporation certification, meaning they have passed B Lab’s triple bottom line certification process, and they have changed their governing documents to include stakeholders’ interests.
Companies that make the grade benefit from the growing community of B Corporations and the resources of B Lab, including discounts from B Lab service partners and the right to use the B Corporation certification logo in their branding and marketing. Millions of green consumers benefit from the assurance they are doing business with companies that are really doing good, and not just companies that are doing really good green washing.

B Lab has also expanded their service partner program with the recent additions of CRM Advantage, Idealist Consulting, and Ellen Weinreb Recruiting and Consulting. Service partners offer discounts to certified B Corporations. These new service partners join Good Media and
B Lab is busy developing Version 2.0 of the B Ratings System targeted for completion by year-end 2009, which will also contain several industry-specific addendums. Version 1.0 was released in October 2007.

Becoming a B Corporation

‚ÄòB’ stands for “Beneficial” meaning B Corporations must create benefit for all stakeholders, not just shareholders. The B Lab certification process is rigorous. Applicants complete lengthy surveys to ensure they meet comprehensive and transparent social and environmental standards. They control for accuracy by requiring certified companies to submit documentation for approximately 20% of their answers to the B Survey; and 10% of B Corporations are audited every year.
Version 1.0 of the survey tool utilizes open source performance standards and impact metrics from numerous sources, including the Global Reporting Initiative, Wiser Business (a project of Natural Capital Institute), and the Social Venture Network. A nine person Standards Advisory Council oversees the certification ratings and auditing requirements.
The Legal Framework
The most significant step in the process requires companies to change their governing documents to institutionalize all stakeholders’ interests — employees, consumers, the community, and the environment. B Lab guides applicants through the legal process of amending their governing documents. Through these changes, corporate directors are no longer legally required to solely maximize shareholder value, shareholders gain additional rights to hold directors and officers accountable, and at the same time, officers and directors are provided legal permission and protection to consider all stakeholders.
The California State Assembly recently passed a constituency statute (CA AB 2944) that empowers corporate directors and executives to consider all stakeholders’ interests in the decision making process. But not all states have reached this point. In fact, in 20 states, corporate statues still don’t explicitly allow institutionalizing stakeholder interests into the corporation’s governing documents (depending on the type of corporation). For companies in these states, B Lab recommends reincorporating in a state that addresses constituency rights.
A Good Start
The marketplace for responsible and transparent businesses is growing rapidly. According to Andrew Kassoy, one of the B Lab founders, in a recent interview in eCo Times, there are approximately 60 million ‚Äògreen consumers’ in the US today (roughly 20% of the population).
B Lab believes providing rigorous certification standards and legal guidance will allow this marketplace to grow more quickly. Their process addresses the entire DNA of a company and not just individual products or activities. Companies looking to show their triple bottom line cred, should look at becoming a B.
PS. Don’t miss B Lab and Triple Pundit at the upcoming Social Capital Markets 2008 Conference in San Francisco in September.

Jim Witkin is a writer and researcher based in Silicon Valley focused on business, technology and the environment. His work has been featured in the New York Times and Guardian newspapers on topics that include: sustainable business practices, clean tech, the environment and next generation transportation technologies. He holds an MBA in Sustainable Management from the Presidio Graduate School. Contact him at

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