Why Be A B Corp: Social Responsibility That's Measurable

Carol Tice — Fri, 05 Mar 2010 21:34:31 +0000

Link:

http://www.openforum.com/idea-hub/topics/money/article/why-be-a-b-corp-social-re...

Lots of businesses claim they're easy on the environment, or socially progressive. But how do customers know your claims are true?

The answer for some 280 mostly small-to-medium sized businesses is to become a B Corporation. A three-year-old project of nonprofit B Lab, the B (for "beneficial") Corp program evaluates corporate-responsibility claims through a lengthy Impact Assessment questionnaire. To qualify, applicant businesses must score at least 80 out of 200 possible points. To keep participants honest, B Corp conducts random audits of 10 percent of members annually, to ensure their claims are accurate.

Sally Thornton found the B Corp program a great way to differentiate her niche professional staffing company, Flexperience in Burlingame, California. Shortly after founding her company in 2006, she heard about B Corp through other Bay Area businesses. She says the paperwork took perhaps 20 hours to complete. The questions asked cover a broad swath of social-responsibility topics, including recycling, telecommuting options, and hiring practices. She says:

It allows you to say, "Independent people say we are genuine, and it's not greenwashing." A lot of companies care about these issues — they care if you're a woman-owned business. I found telling people we're a B Corporation just resonates with them. We are not like everybody else.

Among the qualifiers that got Flexperience into the program are its business model of encouraging companies to use home-based workers, which saves gasoline and carbon emissions. The Flexperience team of a dozen or so also operates entirely virtually, saving the energy that would be needed to power a headquarters office.

Thornton can vouch for the fact that B Corp does its audits, as Flexperience has already been tapped for an audit.

"They definitely ensure everyone's doing what they've said," she reports.

The Benefits of Being B

Besides using the B Corp seal to market your own business, being a B Corp has other benefits, Thornton says. B Corp markets its program, benefiting participants by raising awareness of what B Corp means. Banding together through B Corp gives progressive companies a strong collective voice for discussing social issues with local and national legislators.

B Corp also offers in-person and virtual networking opportunities, allowing companies to meet and exchange ideas. Companies can more easily discover new ways to express their social values, as well as finding possible clients or vendors. Thornton says the community she's gained through B Corp is one of its prime advantages. She says:

When I learn more about what the other companies do, I'm going to choose to support what they're doing, and they'll choose working with us over competitors.

There are financial advantages to becoming a B Corp as well. The organization obtains member discounts on products and services, and also helps connect members to investors who are seeking socially responsible firms.

B Corp services vice president Chrissy Houlahan reports the program has found broad appeal among its target audience of privately held U.S. companies. There are B Corps in 50 different industries and 30 U.S. states, though many of the companies are clustered in the Bay Area.

Participation fees are charged on a sliding scale, based on company revenue. Businesses with less than $2 million in revenue pay $500 annually, while businesses with over $100 million in sales pay $25,000. As your company grows, your fee would rise.

Parent B Labs was founded by entrepreneurs Jay Coen Gilbert, Bart Houlahan, and venture investor Andrew Kassoy. The trio have a lofty goal for B Corps — to see them grow to over 5 percent of U.S. gross domestic product, roughly the size of today's nonprofit sector.

"Individuals and communities will have greater economic opportunity, society will have moved closer to achieving a positive environmental footprint, more people will be employed in great places to work, and we will have built more local living economies in the U.S. and across the world," the company says.

Some B Corp materials are available free to the public. B Corp has created a series of resource guides in collaboration with Columbia Business School's Research Initiative on Social Entrepreneurship. The guides cover best practices in corporate governance, hiring, supplier relations, environmental issues, and community service. For those interested in exploring socially responsible business practice, this is a good starting point.

This is a guest post by Carol Tice.

This article is from Carol Tice of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Is honesty always the best policy?

Sarah Winfrey — Tue, 11 Sep 2007 20:12:52 +0000

I just got a new job! I'm really excited--by January, I should be in a position where my skills and abilities are utilized much more than they are right now. I've been biding my time, waiting for Jack Sparrow's proverbial opportune moment, and it finally came. I jumped on it, and I'm not looking back!

However, figuring out how to handle this situation was hard. I work at a university, and the new position is in a different department at the same school. I've enjoyed working where I am, but the more time I've spent here, the more I've felt underutilized and, more and more, unhappy. So, when I got a call from a former professor asking me if I was interested in applying for a position in her department, I was excited.

But what do I tell my boss? And my co-workers? And the people I know from work but don't work with directly? And the people I know who work in the department I'm moving to? And the people who have been waiting for a perfect position to open for me because they want me to work for them? When the process started, I felt like I walked around for a day or so, my mind buzzing with, "What in the world do I say?"

In the end, I chose a particular combination of transparency and discretion. I was open with my boss--he deserved to know, and he has been honorable and trustworthy enough in our interactions that it was safe. I knew he wasn't going to fire me for applying. I told a couple of my co-workers--one who needed to know before we moved on with a project, and one who I trust to keep his mouth shut. I didn't tell everyone else in my department until I knew I would be leaving because it wasn't necessary, I didn't feel like I needed to, and it didn't seem appropriate in our corporate culture. I told my friends from the department I was moving to, including another person interested in hiring me, though that was more a function of our personal relationships (friendships outside of work) than in a work context.

Why do I share all of this? Because it struck me today that I successfully navigated an often difficult issue, one that required disernment regarding our corporate culture, which individuals were trustworthy, and the different contexts in which I know my colleagues. Getting a new position isn't the only time these skils are necessary--they also come in handy when you're negotiating a raise, have made a big mistake, when you're having problems with a colleague, and a myriad of other situations. Here are three questions that helped me make some of these decisions.

1. How would you feel if you were in the position of the other person?

I decided not to tell my co-workers until I knew for sure about the job because I realized that I would feel awkward if they told me the same thing. I decided to tell my boss because I realized that I would want to know if I were in his position in this particular department.

2. Does your workplace have any spoken or unspoken rules about these things?

The rules, both spoken and unspoken, in my workplace are that we're pretty open about these things. To have not told anyone would have been seen and felt as sneaky or "under the table".

3. What do you want to do?

Seriously, what do you want? Does it matter to you that they might see you in a certain way, or that you might lose your job, or that someone might be extra-critical of you? Do you value your ironclad integrity more than anything else that might happen? These matter, sometimes more than anything else.

Good luck with the corporate navigational skills!

This article is from Sarah Winfrey of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

corporate transparency

Why Be A B Corp: Social Responsibility That's Measurable

The Benefits of Being B

Is honesty always the best policy?