B Corps: Unleashing an army of ethical businesses

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Jay Coen Gilbert is one of the co-founders of B Lab, the nonprofit behind the world’s most powerful movement for good business. A global organisation that has unleashed an army of ethical businesses focused on shaping a better world. By Oliver Haenlein.

B Corps are, as Jay Coen Gilbert describes them, the drum majors of a new paradigm of business; lead climbers on a line of changemakers heading up the mountain.

Certified B Corps are businesses that have met rigorous standards of social and environmental performance, accountability, and transparency set by Coen Gilbert’s B Lab non-profit organisation. Alongside B Lab co- founders Bart Houlahan and Andrew Kassoy, Coen Gilbert had a dream of unleashing business as a powerful force for good, and now his work is helping to create a cultural shift towards a more inclusive economy that works for the planet and everyone on it in the long run.

Jay headshot hi resThe organisation is doing this by serving a global movement of businesses leading the way in attempting to solve the planet’s most pressing problems. It runs a certification programme which assesses businesses’ impact and purpose beyond profit. If companies meet a number of strict requirements they are certified as B Corps, and join a growing coalition of companies using their collective voice to force change. They also improve their visibility to the marketplace, attracting backing from those who support companies doing business in better ways.

Coen Gilbert, who had previously co-founded and sold the multimillion dollar footwear company AND1, tells Salt what the key insight was when establishing B Lab: “Government and non-profits around the world are necessary but insufficient to solve our most challenging problems. They can’t do it alone and we need business to play a leadership role. As the most powerful manmade force on the planet, business has got an awful lot of latent potential to be used as a force for good.”

SUCCESS

The uptake has been impressive. B Lab was established in 2006, and now there are over 1,400 certified B Corps across 120 industries, in over 40 countries.

However, the real impact, says Coen Gilbert, is not the growing number of certified Corps themselves, but the race to the top they have created, since the B Lab assessment standards are available as a free, public tool.

“There are already around 30,000 businesses around the world that are using the performance standards that we use for certification as a free management tool to help them measure and manage their impact with as much rigour as they do their profits.

10374521_10152464804572546_3052693620783377555_n 2“Certification is like a North Star, but we recognise that the movement is much bigger than the B Corps, and part of their job is to build bridges for others to follow.”

So why are we seeing this burgeoning movement of businesses driven by impact and purpose? Coen Gilbert says the millennial generation is heralding major shifts.

MILLENNIALS

A large section of the workforce is now made up of millenials, and CEOs are beginning to understand that they are seeking motivation beyond money, representing a shift away from a work-life balance, towards work-life integration.

What’s more, he explains: “Millennials over the next two decades are going to inherit US$30 trillion; it’s going to be the largest single wealth transfer in the history of humanity. They’re going to want to invest their money with that same desire for integration, where they want to make money, but they want to do it in a way that makes a difference.

“B corps recognises that and says, if you’re looking for that sort of experience or investment, this is the place where you’ll find it. B Corps is growing so rapidly because we’ve recognised a marketplace need out there that nobody was meeting and we’ve created a platform on which these companies can stand and people can say, ‘those are the kind of companies I want to work for; those are the companies I want to invest in, and those are the kind of companies I want to buy from.”

CHALLENGES

PrintCoen Gilbert believes there is one concept underpinning all of today’s major global challenges: the decoupling of the interests of business from the interests of society.

“As business has become more and more powerful, if the interests of that powerful force are divergent from the interests of society then we’ve got a serious problem. Whether a particular citizen, entrepreneur, investor, consumer or policymaker is most concerned with soil depletion, water shortage, climate change, peak oil, rising inequality, lessening income mobility, food systems that are broken – whatever it is – if you pull those threads, most of the time you will end up recognising that a big part of that problem is the fact that there is no longer a linkage between these interests.

“All the challenges can be addressed if we grow a business community and a marketplace of support for those businesses that has voluntarily aligned those interests. We’ll see entrepreneurs and investors solving each of those individual problems, because people will follow their passion and put their money to work in the places that they care most about; and they’ll be doing it in a structure that supports that energy as opposed to resists it.”

This realignment is being accelerated by B Lab’s powerful work, but Coen Gilbert isn’t getting complacent: “There’s no mission that’s been accomplished, we’re at the very early stages of what will be a generational shift to redefine success in business. The aim is that one day all companies will be competing not only to be best in the world, but best for the world.”

THE CATALYST

When I ask the B Lab co-founder what’s behind his quest, and how he begun the journey, the conversation takes on a more emotional note. He tells me a series of life-shattering events made him think hard about his life.

“In 2001, in the space of a few weeks, 9/11 happened and my sister who was in broadcast journalism was right there at ground zero. She was alive but given emergency medical care, and was personally shook up. Later that week our Dad died of lung cancer very suddenly, and two weeks after that a beloved member of our team at And1 died in a car crash.

“So in a very short period of time I got beat up with these three events. It was in the immediate aftermath that my brain clicked into a different place. I thought, ‘what is the highest, best use of my time and talent?’ If there was a catalytic energy, it was the three body blows that I got that said ‘ you better look hard at how you’re spending your time’.”

B Lab has already achieved much on its road to redefine success in business; if the project progresses on the current trajectory, Coen Gilbert should surely feel vindicated when he considers how he answered that important question back in 2001.

How does a business become a B Corp?

SOCIAL AND ENVIRONMENTAL PERFORMANCE

Companies must meet rigorous standards of overall social and environmental performance; businesses are asked a set of questions to do with how they treat their workers, which customers they choose to serve and how well they’re serving them, how they engage with their local communities or global supply chains, and how they manage their environmental impact. The sum total of all those decisions has to meet a minimum score of 80 out of 200 available points on the ‘B Impact Assessment’. They must recertify every two years.

TRANSPARENCY

The next set of requirements deals with transparency. Coen Gilbert explains: “Every B Corp, whether they’re scoring 80.1 or 162 have to make their B Impact summary report transparent to the public. B Corps have to be transparent about the whole thing, not just the areas where they’re doing best.”

LEGAL DUTY

The final piece is a legal requirement to change their corporate governing documents. They become legally obligated to consider the impact of their decisions on society, not just on shareholders.Coen Gilbert says: “Traditional corporate law in the US and in most places is the fiduciary duty, which is about one thing

only: maximising the returns of the shareholders. So B Corps changed the rules for themselves, they voluntarily say ‘I’m going to operate under a higher set of accountability standards; I’m going to ensure we are legally obligated to have a conversation about how a decision will impact our local community, or the environment for generations to come’.”

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