B Corp status is the latest movement sweeping the business world, originating in the states, almost 150 UK businesses are now certified as a B Corp, and 3,000 globally, and some pretty big ones too.
So what is a B Corp, who’s got it, why does it matter, what sets it apart from social enterprise?
B Corps status doesn’t replace the need for social enterprises, businesses that enshrine social impact in their operating model. The key difference is that B Corps is a status any business or social enterprise can gain, it is not a legal structure. It’s purpose is to recognise and involve all businesses, big and small, profit distributing or not in improving the way they work in a number of areas related to ethical business. From employee engagement to standards on social and environmental performance, accountability, and transparency, the B Impact Assessment gets to the bottom of how a business operates in an ethical manner. For those of us getting weary of the corporate clap trap surrounding CSR, this really feels like a breath of fresh air.
There is something mythical about even the name, does it stand for Better, Benefit or Be the Change? The real answer is that in many USA states companies can change their legal structure and become Benefit Corporations, this satisfies the legal component of becoming a certified B Corp, so that is where the ‘B’ probably came from, but as the movement develops, ‘Be the Change’ is how the entrepreneurs leading the charge often refer to it.
In the UK there are some high profile B Corps, Danone UK, Divine Chocolate Ltd, Pukka Herbs, JoJo Maman Bebe, Ella’s Kitchen, west country surf brand Finesterre and Cornish design agency Leap and it’s growing all the time. There are also some social enterprise converts who are choosing to use B Corp status to demonstrate their credentials like the Big Issue, Resource Futures and at some point in the future hopefully RIO!
The reason businesses are starting to turn to B Corp status is simple, the market is starting to expect more from businesses. Whether that be investors looking for more impactful returns or millennials demanding more purpose in their jobs or customers demanding more than just a cheap price, conscious about where and how their products are made. If you think this sounds glib, some pretty influential people are backing the cause, people with a lot of money to invest for good.
Larry Fink –BlackRock CEO:
“Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies need to do more than make profits —they need to contribute to society as well if they want to receive the support of BlackRock.”
So why does this matter? Well, for those of us working in the social enterprise sector we may have reason to think we own social impact! But we don’t, and whether we like it or not, businesses have a huge role to play in society, so in my view, anything which succeeds in getting business leaders to take the triple bottom line more seriously has to be a good thing. Of course we can all argue that the legal aspects are not the same as an asset locked CIC, and you’d be right, but if you can get 1,000 shareholders to agree to change a business’s legal constitution so that it has to take into account social and environmental factors when making decisions, then you’ve invested heavily in this and won some hearts and minds! If you’ve then achieved the minimum 80 out of 200 score, you’re definitely on the right path. Are there businesses who could take advantage of this to ‘greenwash’ their customers, possibly, but they would have to go through a lot of effort to do that, are there social enterprises who don’t deliver as they should, probably. Are we better off having a movement of businesses all trying to ‘Be the change’ in the world…absolutely.
Having recently trained as a B Leader, someone who can help and guide businesses through the process, I’ve come to realise that despite my initial cynicism, this could really be something that makes a difference. The group I trained with came from many backgrounds, some running their own businesses, some representing major financial institutions and training as internal champions, some looking for a career change, but all with one clear objective, to have more purpose in life. That was refreshing, as was the beer that we drank after the training and that is as much a part of this movement as anything else, B Social’s are popping up everywhere, a chance to meet likeminded business people, exchange practice and do better business together. I have already witnessed some great examples of information sharing between businesses that normally might be competitors, or at the very least extremely guarded about what they share, but the B Corp network in the UK, coordinated by B Lab UK, seems to have real potential and there are already examples of B Corp’s redefining their supply chains by demanding B Corp status from their suppliers.
So safe to say I’m an early adopter, but mindful of my social enterprise roots! But there’s a part to play for both B Corp and social enterprise and I for one hope this brings like minded people together to make more social change happen and to do some better business together!
For help and advice on B Corp visit https://bcorporation.uk/about-b-corps
Blog post by Jon Rolls, commercial director at Real Ideas Organisation. Real Ideas Organisation are one of six delivery partners providing business support to Social Entrepreneurs as part of the Enhance Social Enterprise Programme.
The Heart of the South West Enhance Social Enterprise Programme is receiving funding from the England European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020