What are B Corporations? With Examples

Published on
Mar 17, 2021
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Here's how nearly 4,000 companies use business as a force for good

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So, you want to learn more about B Corps. You’ve come to the right place.Did you know that, according to a survey by B Corp Fors Marsh Group, approximately 24% of people in the United States have seen the B Corp logo before, and 26% have seen or heard the phrase, “People using business as a force for good”?Clearly, the B Corp movement has gained a lot of traction since its beginning 15 years ago. But many don’t realize just how much goes into getting — and maintaining — a B Corp status. Joining the B Corp ranks takes sizable resource investment, effort, and commitment (which might explain why Flock Freight® is the first and only B Corp in freight shipping).B Corps undergo rigorous vetting to prove they meet the highest standards of environmental and social responsibility. The result? A verified community of leaders that share a few simple values: Be the change you seek in the world, do no harm, and benefit all.[Want to see examples of B Corp values in action? Check out our special report on five B Corps with sustainable supply chains.]If you’ve got questions about this global movement of businesses — ranging from who the most prominent B Corps are to learning how to find B Corps on your own — look no further. Here’s everything you need to know about Certified B Corporations. [sc name="anchtag" id="certified" ]

What are Certified B Corporations?

Patagonia. Bombas. Klean Kanteen. Athleta. Allbirds. Seventh Generation. Ben & Jerry’s.What do all these companies have in common?You guessed it — they’re all Certified B Corporations.Certified B Corps are for-profit businesses united by one vision: to use business as a force for good.This vision might sound utopic, but it’s actually both practical and measurable. B Corps are verified to balance profit and purpose — rather than blindly pursue their bottom lines — and consider how their actions impact their workers, customers, suppliers, community, and the environment. Ultimately, B Corps must work to build a more inclusive and sustainable economy for all.Not everyone can be a B Corp, though. Thanks to a rigorous framework of assessment and verification, companies can only certify if they meet the highest standards of social and environmental performance. Having the vision isn’t enough to earn a B Corp status — companies must demonstrate beyond doubt that they use business as a force for good.At the end of the day, B Corps represent a global paradigm shift away from reckless business practices and towards new standards of transparency, sustainability, and accountability. And, if those examples of high-profile B Corps we mentioned above aren’t indication enough, that momentum is growing. [sc name="anchtag" id="around" ]

How long have B Corps been around?

B Lab, the nonprofit organization behind the B Corporation certification, opened for business in 2006. B Lab believes that nonprofits and governments alone cannot solve society’s most challenging problems. Therefore, its founding mission was to create a framework that would enable for-profit companies to protect and improve their positive impacts over time. In 2007, B Lab inducted 82 mission-driven companies into the first class of B Corps and launched the global movement we see today.The B Corp network now consists of almost 4,000 companies across the world, and that number continues to grow as more businesses earn their B Corp badges.Why become a B Corp? To those who recognize it, the B Corp logo signifies a business that is committed (and verified) to balance profit and purpose — a value that is becoming increasingly important to consumers and businesses alike.That small logo carries a lot of weight. For that reason, the certification process to become a “better business” isn’t for the faint of heart.

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How does a business earn a B Corp certification?

Before giving a business its B Corporation certification, the nonprofit B Lab measures the company’s entire social and environmental impact on its employees, its local community, and the world at large.Enter: the B Impact Assessment (BIA).The BIA is a rigorous evaluation of how a company’s business model and day-to-day operations positively affect all stakeholders according to key impact areas. These areas include:

  1. Governance: Whether the business governs with transparency, leads change within its industry, and ensures ongoing dedication to its mission, regardless of ownership.
  2. Workers: How the business creates high-quality jobs with dignity and purpose, takes care of its workers via employee benefits, training, fair pay, continued education, a safe environment, and more.
  3. Customers: Whether the business creates value for customers through ethical and positive marketing, product and service quality assurance, data privacy and security, and more.
  4. Community: How the business supports its suppliers, distributors, local economy, local community, and serves underrepresented populations
  5. Environment: How the business contributes to sustainability efforts, such as energy efficiency and waste reduction.

Business size, sector, and industry determine the number and type of questions on the BIA, but companies must typically answer around 200 questions total (including a Disclosure Questionnaire for organizations with sensitive practices). Phew!If businesses pass the BIA with a minimum score of 80, the hardest part is over — and the review process begins.Companies will then work with B Lab staff to review the results of their BIAs, validate their responses with necessary documentation, and complete any required background checks. The wait time between submitting the assessment and launching the review process varies depending on application volume and the amount of additional verification needed, but it can take up to six months.If all checks out, companies are just a few steps away from completing the process. Businesses will then need to:

  • Meet the B Corp legal framework (which we will discuss in the next section).
  • Sign the B Corp Declaration of Interdependence: a statement encompassing the B Corp value system and shared vision for the future.
  • Sign a B Corp Agreement stating the terms and conditions of earning (and keeping) B Corp certification.
  • And, finally, pay a certification fee based on annual revenue and region.

At last! B Corp certification! [sc name="anchtag" id="maintain" ]

How does a business maintain its B Corp status?

Obviously, achieving B Corporation status is a triumphant moment in a business’s history; the last thing the company wants to do is lose it.B Lab ensures that companies continue to meet impact standards, even as they grow or change, by requiring B Corps to recertify every three years. In order to maintain their status, companies must retake the B Impact Assessment, provide verification for their answers, and pass with at least 80 out of 200 points.Luckily, the B Impact Assessment functions as both the benchmark to becoming a B Corp as well as a self-evaluation tool to keep companies on the right track. (B Corps like Patagonia and Ben & Jerry’s use the BIA to improve their businesses.)But that’s not all. In order for many companies to keep their B Corp certifications, they must back up their commitments through legal adjustments to their company structures.The most common ways to do so are:

  • Updating their Articles of Association with B Corp legislature.
  • Reincorporating as a benefit company or benefit corporation.
  • Amending governing documents to include specific mission-aligned language.
  • Making other structural changes.

Why are these legal assurances necessary?Consider, for example, if a company undergoes a leadership change or funding series that introduces new shareholders with differing ideas for the business’ future.As a benefit corporation, businesses are legally responsible for considering how their decisions impact all stakeholders (like workers, the community, and the environment), not just shareholders. This legal accountability empowers decision-makers to pursue positive stakeholder impact alongside profit as companies scale their sizes and scopes. (Basically, it provides muscle.)Within two years of certifying as a B Corp, businesses must adopt benefit corporation structure or equivalent within their legal articles or risk losing their B Corp statuses.You might be thinking, “Wait a minute — B Corp, benefit corporation? What’s the difference?!”We’ll explain more below. [sc name="anchtag" id="benefit" ]

What’s the difference between a B Corp and a benefit corporation?

Believe it or not, B Corps and benefit corporations aren’t interchangeable. While they’re similar in their objectives — to use business as a vehicle to create positive social and environmental impact — one is a third-party certification, and the other is a legal structure.As we’ve outlined above, B Corps receive their certifications from a third-party nonprofit, B Lab, which assesses their overall impacts according to a comprehensive framework.On the other hand, a benefit corporation is a type of legal business structure, like a traditional corporation or LLC.Benefit corporations are only available in the 30 U.S. states (including California) that have passed benefit corporation legislation.B Corps can be benefit corporations, and benefit corporations can be B Corps, but, ultimately, they’re not one and the same. For more differences between the two, check out the chart below.

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How can I see which companies are B Corp certified?

Public transparency is one of the most important facets of the B Corp community (for good reason).The B Corp Directory makes it easy for consumers to find companies with a mission that aligns with their values. There, you can find all Certified B Corps, learn about their scores on the B Impact Assessment, as well as see how they rank on a variety of impact categories, compared to other businesses. [sc name="anchtag" id="support" ]

How can I support B Corps?

B Corporations are a new generation of organizations that just do business differently. When you support a B Corp, you’re supporting a company that:

  • Drives a global movement of people using business for good.
  • Uses the power of business to tackle society’s pressing challenges.
  • Creates a more inclusive, sustainable economy for all.
  • Is 250 times more likely to be carbon neutral than a regular company.
  • Places people before profit.

Take Flock Freight, for example. We earned our status as the first Certified B Corporation in freight shipping by building solutions that create a more sustainable future for all, and through our commitment to our people. When shippers partner with us, they know that they're partnering with the first company to offer a freight mode that reduces greenhouse emissions up to 40%. We are leading the freight industry towards a carbon neutral future with these types of sustainable solutions, and all the while, offering our team the highest level of support, benefits, and purpose.The bottom line is, it’s easy to support B Corps. If you’re an individual, look for the B Corp logo next time you’re shopping online or in store. If you’re a business owner, consider partnering with Certified B Corps (like Flock Freight) over traditional companies. Or even better — take the B Impact Assessment to see how your company can improve its business practices.Who knows? You may just end up a B Corp yourself.