B-Corporations: a step ahead
October - Edition #7
Growing concern with environmental and social issues, and the pressure from citizens and consumers for Corporations to address these challenges are leading to an interesting trend: Companies be incorporated as for benefit Corporations in the US (or a similar hybrid legal form in other countries) or, as an alternative, existing companies being certified as a B Corp, which is a global certification assigned by the organization B-Lab.
The first option implies having legislation in place (at it happens already in the US and UK). The second option is “ready to go” - any Company can start the process to be certified.
A Benefit Corporation is an incorporating structure similar to a for-profit Corporation, but it must also consider the impact of its business decisions on all stakeholders—not just shareholders or members —while creating a material positive impact on society and the environment.
"The B Corp movement is one of the most important of our lifetime, built on the simple fact that business impacts and serves more than just shareholders - it has an equal responsibility to the community and to the planet.” Rose Macario, CEO of Patagonia
A certified B Corp is a company that meets rigorous standards of social and environmental performance, accountability and transparency, and is certified by the non-profit organization B Lab. This is a global movement of people and companies “using business as a force for good”, with a powerful claim: “in the future companies will be competing not only to be the best of the world, but to be the best for the world”.
In the current environment where employees, clients, regulators and society in general are demanding that corporations generate positive impact, this certification, for many companies, is strategic in the sense that will be an important piece of the puzzle called “creating a sustainable competitive advantage”.
To date, there are almost 3000 certified B Corps operating across 150 industries in 60 countries throughout the world, including 11 in Portugal. The rise of the B Corp in the global stage is a phenomenon that has the potential to redefine success in business and create a more social and environmentally beneficial economy.
As Rose Macario, CEO Patagonia says” The B Corp movement is one of the most important of our lifetime, built on the simple fact that business impacts and serves more than just shareholders -- it has an equal responsibility to the community and to the planet”.
A suggested action item for you: go to the website of B-Lab and start filling the free B-lab assessment survey for your company. You will get an immediate rating that will tell you if you are ready to become a certified B-Corp and what areas of processes, behaviors and governance should be improved. It is a first step in your path to impact!
On a different topic, we would like to draw your attention to the 2nd edition of the "Responsible Business" Program, part of the Executive Education offer, due to start on the 19th February 2020. Enrollment is now open.
Nuno Moreira da Cruz
Center for Responsible Business and Leadership
Executive Director and Affiliate Professor
Católica-Lisbon School of Business & Economics