It’s Time For Plan B

September 09, 2016 | Sara Schivazappa
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The desire for a label of ethics is growing and so are the benefit corporations

Not all entrepreneurs need to be socially conscious to make a difference but many entrepreneurs are rising with a desire to give back and operate for a deeper benefit. And guess what? The numbers repay them.

In the United States, they call it the B factor, the benefit factor, the element which determines if a profit company can be certified as an enterprise that has high social or environmental impact. So far, there are over 1400 companies in the US that have obtained the status of Certified B Corp; a certification created in 2007 by the non-profit organization called B Lab with the desire to engage the business world in a broader project, that of making business a force for change.

Too often, certified B Corps are confused with Benefit Corporations, those US enterprises with which they share the abbreviation B Corp. They differ in a few important elements, the main one being that Benefit Corporations don’t need to reach a particular score, nor have their performance verified or audited by B Lab, or anyone else.

Certified B Corps are not legally acknowledged as social businesses. Surprisingly, they are actually fully for-profit companies, which have decided to undergo a very serious selection to verify and maintain their level of environmental and social sustainability.

“The B label is the equivalent of Fair Trade for coffee” says B Lab co-founder, Jay Coen Gilbert, “our certification, however, assesses the sustainability of a whole company, not just a single product.”

Gilbert was an entrepreneur himself and before founding B Lab, he co-founded AND1, a basketball footwear company that sold for 250 million dollars. B Lab was born through an initiative of Gilbert and two others entrepreneurs, Andrew Kassoy and Gilbert’s partner at AND1, Bart Houlahan.

The idea behind B Lab comes right from their experience, says Kassoy:

“We realized that there was a growing number of companies wanting to create value for all their stakeholders, not solely their shareholders. These are companies that are not only in competition among each other to be the best in the world, but they want to be the best for the world.”

Among the most famous companies which wanted to legitimize their engagement and positive impact, we see Etsy, the e-commerce site for artisanal products, the outdoor clothing and gear brand Patagonia and the ice cream brand Ben & Jerry’s (the first multinational-controlled company to become a B Corp). As Gilbert puts it, “creating a community of companies certified with the B label means giving the consumer the possibility to understand the difference between virtuous brands and those [who are] good at marketing.” The evaluation process for the B label includes a careful background check and access to a company’s most sensitive documents. 10% of certified B Corps are then randomly selected to be examined ‘on field’ to confirm the veracity of the information they provided.

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The status also needs to be reassessed and renovated every two years in order to guarantee that the ethic criteria keeps being respected, even through changes a company might undergo. In addition to this, participating in the selection process requires a fee that varies according to the dimension and sales volume of the company. But what are the reasons that move a for-profit company towards such a rigorous evaluation process? A process that includes paying a fee, sharing confidential information and no tax reduction?

The big reason why entrepreneurs are moving in this direction is that this kind of label allows them to keep their head up because what they say they stand for, is actually coherent with what they actually do. This labeling allows enlightened entrepreneurs to keep their head up in a market where consumers are more and more aware and critical towards business and consumer choices.
According to a Net Impact survey from last year, 65% of the new market force (mainly students) are willing to create a positive impact through the choices they make, and they want to see brands standing for something that matters to the world. Even when looking for a job, millennials are looking for a job that can have positive effects on society.

Operating within sustainability is therefore key to offering a new, broader meaning to business, a renewed role to people, and to reinforce the much-needed idea that we can all do our part. The next step is to develop public policies for sustainable business, like legal recognition of B Corps and a tax deduction system for companies that follow high social and environmental behavior.

This way, the chessboard of economy will change, and so will the world. All through a great plan B.

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Sara Schivazappa

After humanistic degrees in foreign languages and literatures as well as anthropology, Sara attained a Masters in Communication Analysis and Management. She first joined the United Nations, working in the press offices in Kosovo, Ghana and New York, and then entered the world of marketing and research at Unilever, followed by a move to Innate Motion in 2008.

Sara is a bright and empathetic researcher, appreciated for her ability to understand people in depth and create interesting perspectives. She conducts international research all around the world, applying her human understanding and writing about it using her communication background. These cultural studies are in fact sparks to write articles on societal and cultural issues for the Innate Motion website and online editorial agents.

Sara is an environmentalist and also works for the Italian National Authority for Animal Protection (ENPA) by enabling communication activities aimed at raising awareness around respect for animals.