The experience of working at both for-profit businesses and non-profit organizations has given me a perspective on the pros and cons of each. Businesses, for the most part, exist only to satisfy shareholders by increasing profits. They may donate to charities but it may not be part strategic in the sense that it benefits their stakeholders. Non-profit organizations focus on issues such as health, education or the environment and may have multiple revenue streams.
Businesses generally operate with the purpose of increasing profits but often don’t focus on solving social issues. Non-profits may struggle to bring in enough money through fundraising, memberships or other streams in order to solve the issues and meet the goals on which they’re working. What if there was a hybrid organization that could be profitable as well as be beneficial to society and the environment? In my opinion as well as others in the social impact space, there should be more profit-making impact businesses in the world.
That’s why I started Crossbow Strategies, a consulting practice that helps for-profit businesses increase value and increase their impact on the community and the environment. I’m also helping to grow the Certified B Corp movement.
Many companies have found that they can increase their value by growing profits while making a positive impact on their employees, customers, community and also the environment through reducing the use of resources such as energy, water and packaging. That’s where the B Corp certification comes in. It’s a third-party certification that similar to LEED certification for buildings or a USDA Organic certification for food products, but it certifies an entire company.
To become a Certified B Corp a company must complete the B Impact Assessment and earn a minimum score of 80 out of 200 points. They must also change their legal status to a benefit corporation if they’re located in one of the 30 U.S. states or Washington, DC, that recognize this type of business. Becoming a benefit corporation does not change a company’s tax status.
Certified B Corporations only make up a small percentage of the millions of companies around the world. As of the summer 2016, there are 1,800 B Corps in 50 countries covering 130 industries. Some familiar Certified B Corps include Patagonia, Ben & Jerry’s, Etsy and Seventh Generation. Large multinational corporations such as Unilever and Danone are exploring the certification.
The B Corp certification was developed by B Lab, a non-profit organization based in Pennsylvania, which has also worked with state legislatures to create the benefit corporation legal status for companies.
Some benefits of businesses becoming a Certified B Corporation include:
· Differentiating themselves from competitors
· Attracting investors who want long-term value
· Attracting potential employees, especially millennials, who want to their work to have meaning
· Benchmarking economic, environmental and social performance
· Generating publicity
· Partnering with peers
If you would like to find out how to increase your businesses long-term value and benefit all stakeholders, contact us at Crossbow Strategies.