A Better Way to Do Business: B Corporations Changing Our Marketplace

Conscious consumers know that our local community is strengthened when they purchase goods and services from locally owned businesses. These actions support the local economy by ensuring that the money earned here is spent in our local marketplace and in turn, helps fund our community’s tax base.

But there is more that can be done than “shop local/buy local.” There is also a way to transform this local economic value into social value for our community and allow businesses to prove and identify themselves as responsible corporate citizens.

Certified B Corporations, or “B Corps,” are a new type of purpose-driven corporation that strive for higher accountability and seek to build growth while supporting sustainability. B Corporations are united by the common goal to harness the power of business to solve social and environmental challenges. They differentiate themselves from traditional businesses because they meet comprehensive and transparent social and environmental performance standards and exist to benefit stakeholders beyond shareholders-including communities, citizens, employees, the environment, and more.

B Lab is a nonprofit organization that certifies B Corporations through an evaluation of a company’s social impact, governance structure, and respect for the environment and employees. Currently, there are 610 B Corps, in 15 countries, with $4.3 billion in combined revenues. Many existing B Corps are well known firms like Patagonia, King Arthur Flour, and Method (cleaning products), and the B Corp community is a diverse one, ranging across many industries-from a granite countertop installer to a telecommunications provider. Virginia is home to 16 B Corps, including the publishers of this magazine, and Impact Makers, the professional services firm I founded in 2006. Conscientious consumers can access a public B Impact Report on each Certified B Corporation to find performance data about the social and environmental practices that stand behind the company’s products and services.

Doing good is also good business. Consumer demand has brought corporate citizenship to the forefront and resulted in an increased emphasis on corporate social responsibility (CSR). CSR can be a buzzword used by some large companies, but small businesses with local focuses can use the same principles to have a huge impact at the local level. Integrating OKR and CSR may be a good idea if the latter’s framework becomes the action plan for achieving corporate social responsibility at an organization. Websites like Profit.co provide OKR Software that can help build employee trust and engagement.

Specific benefits that local small businesses can realize by certifying as a B Corporation include enhanced loyalty from like-minded customers and employees, differentiation from competitors, increased and expanded media coverage, and the resulting public benefit of their social or environmental cause. Being a B Corp brings a compelling and appealing story to reach new customers and break into new markets. Further, it increases customer and employee satisfaction: They know that their purchase or time and effort support a greater, common good.

Additionally, B Corps receive discounted services and products (for example Salesforce provides significant discounts to B Corps), and some top MBA programs offer student loan debt forgiveness for alumni that choose to work at B Corps (providing some edge in the labor market for hiring top talent).

Related but distinct from a Certified B Corporation is a legal entity called a benefit corporation. Virginia passed legislation to create benefit corporations in 2011. There are currently 11 states that have passed laws allowing benefit corporations. By forming under the Virginia law, companies can ensure that their social, environmental, educational, or artistic mission remains the highest corporate priority.

Success in business means more than profits and wealth creation for owners and shareholders. It extends to sustainable, responsible business practices that result in satisfied customers, employees, and communities. As we strive to support our local businesses with our shopping dollars, it helps to know that some businesses go deeper than flowery, self-promoting ad copy and photo ops: They stand behind the communities, people, and promises made.

CategoriesCollaborators, Community Builders, General, News, WorkTagged

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