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B-Corps: What they are and how they are important to the environment

Ben & Jerry’s (specialty ice cream), Patagonia (active wear and gear), Warby Parker (carbon-neutral eye glasses), Athleta (sustainable fabric workout and casual wear), AllBirds (eco-friendly athletic shoes), and Aesop (vegan and cruelty-free beauty products) all have something in common, what is it?

They are all B Corps.

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What exactly are B Corps and why do we care? These are traditional, for-profit businesses certified by B Lab for demonstrating high social and environmental performance, accountability, and transparency.

Despite their social or environmental enterprise, these businesses are not nonprofits or benefit corporations.

Nonprofits are organizations that operate for a public or social cause. Nonprofits are not driven by profits. This means their revenue, often generated from donations or grants, goes towards their employees and mission rather than private parties. And while benefit corporations and B Corps are both for-profit businesses generating public “good”, benefit corporations are legally bound to have positive impact goals whereas B Corp is a third party certification system from B Lab. To be clear, “B” in B Corp does not equate to “benefit” but is likely derived from the “B” in B Lab.

B Lab, which began in 2006, is a nonprofit organization using policies and programs to promote business as a force for good. B Lab awards the B Corp certification to companies demonstrating high social and environmental performance, accountability, and transparency. This means the companies are achieving greater equality and equity, minimizing environmental harm, and being open about their operations.

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With its vision of an inclusive, equitable, and regenerative economy, B Lab works to help companies balance profit with social purpose. An inclusive and equitable economy ensures everyone can contribute and earn with fair access to resources and opportunities. A regenerative economy is based on ecological restoration and community governance, rather than natural resources exploitation and oppressive systems.

Businesses pursuing B Corp Certification fill out a B Lab questionnaire that is evaluated for points, a type of scoring system. Impact areas for earning points include business governance, worker benefits, community inclusion, environment, and customer stewardship. Businesses that achieve a sufficient level of points (80+ points out of 200) then submit a B Impact Assessment for a series of verifications with B Lab analysts. Once certified, a business must recertify every three years to maintain B Corps status.

According to B Lab, their B Corp certification standards are determined by their Standards Advisory Council and Board of Directors. Certification standards are regularly updated to ensure inclusion and credibility with input from stakeholders and advisory groups, which comprise of financial, health and safety, sustainable design, and education experts.

It’s easy to assume that B Corp businesses are full of positive impact. Although this should be the case, some companies who are known for corporate activism have struggled with labor-related issues and controversies in their history. Some of these issues are hidden within the base tiers of production where questionable labor practices may be considered legal in other countries and other companies may have issues right here in the US. Many of these companies like Patagonia, Ben & Jerry's are working toward solutions to remedy these situations. However, more investigation is often needed to determine a plan of action and progress can be slow. For the consumer, it’s always good to do your own research on your favorite brands/companies to know the whole story and make informed choices that you can live with.

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Over the years, B Corps have even expanded into the international sphere, and range from small to multinational businesses. They encompass a variety of industries, such as arts, business consultancies, and of course, environmental services! While no company is perfect and activist companies are limited in their ability to enact change, a B Corp certification at least pushes executives and investors to consider business parameters beyond the metric of monetary profit. The B Corp certification is shedding light on what more consumers want to see in the items they purchase. As consumers become more aware, companies will be more motivated to get their certification and adopt more sustainable practices. You can find out if your favorite brands are certified B Corps by visiting the B Lab website. Becoming aware of where your products come from, who they are made by and how they impact the environment is one big step to making a difference for businesses to be sustainable and fair for all. OC Habitats supports eco-friendly, sustainable, and fair trade; you may find us partnering with organizations with such designations like B Corps.

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