Social entrepreneurship is evolving into a global movement, and it’s rendering the standard nonprofit/for-profit dichotomy obsolete. Now, new legal structures and certifications are being built to accommodate for businesses with embedded social missions. Leading the way in this movement is the B Corporation (B Corp), a new kind of certification created by the nonprofit B Lab that enables companies to “meet rigorous standards of social and environmental performance, accountability and transparency.”
(B Corp, it’s important to note, is different than Benefit
Corporation, a legal incorporation that allows companies to consider
non-financial, social outcomes-based motives when making decisions, a
fact that is written into legal documents during incorporation.)
With more than 770 certified entities in 27 countries, the B Corp is
giving “business as usual” a socially-focused and sustainable twist.
At the recent Ashoka Future Forum, we sat down with key leaders in this field to get a sense of exactly how B Corps are creating the corporation of the future.
“Businesses are legally obligated to be empathetic”
Jay Coen Gilbert could have gone on for hours about the mission,
statistics and societal implications of B Corp and I don’t think anyone
in the room would have minded. As co-founder of B Lab—the
nonprofit that currently puts all potential B Corps through a rigorous
financial and social analysis—Gilbert is full of insights on why this
new certification is an important form of corporate branding.
“The last 20 years was about identifying good products through
certifications like ‘organic’ or ‘fair trade’, but the next 20 years
will be about identifying good companies,” he said. In other words,
while capitalism in the 20th century was about maximizing shareholder
value, capitalism in the 21st century is about maximizing “shared”
value, a kind of collective value that is centered on empathy.
Greyston Bakery CEO Michael
Brady explained the perspective shift B Corp has brought about. “We
don’t hire people to bake brownies,” he said, “we bake brownies to hire
people.” Greyston Bakery, through a partnership with Unilver, is the
source of Ben and Jerry’s Chocolate Fudge Brownie—they make that perfect
brownie batter ingredient.
Even better than the batter, Greyston creates jobs for people in
low-income areas, who make up 80 percent of his staff. That impact is
exactly what the B Corp status highlights to the rest of the world. The
certification has redefined “social business” to mean that the entirety
of the company is functioning with a bottom line of shared value:
focusing on people, not just profits or products—in this case, brownies.
“Forget business as usual”
Michael Elsas is the president of the Cooperative Home Care Association,
an organization that gives 85 cents of every dollar earned to its
workers. “We care about the quality of the product but also about the
quality of life of the worker,” he said, adding that CHCA has quadrupled
in size in the last few years on tight margins. Businesses will grow
when you care about the people that work for you. It’s as simple as
Millennial workers (who really think they can make a difference)
make up half of the global workforce, so these “better business”
efforts are not going unnoticed. Suddenly, there’s been an evolution in
expectations in the marketplace—consumers have responded by setting
higher standards through their purchasing preferences.
Greyston’s Michael Brady speculated that when consumer behavior
change reaches a tipping point, the companies that are still trying to
maximize profits will feel a loss of marketshare. Corporations will
practically be forced to embed social values into the core of their
B Corp-certified companies have proven (and will continue to prove)
that they can make a profit while creating meaningful social impact,
which gives them a competitive advantage.
“We need to distill the chaos”
This is all fine and good, if it’s actually working. But there
still seems to be a disconnect between consumer intent and actual
As Ashoka Fellow Michelle “Mitch” Hedlund
pointed out during the Future Forum session, consumers very much want
to do the right thing, but getting the clear, correct information to
guide split-second decision-making is the challenge. “We need to distill
the chaos,” she said. “The part of the conversation that is missing is
the information to allow people to act on their good intentions.”
Hedlund, who herself works on demystifying information about “green” products, posits that this will influence real, long-term behavior change on a societal level.
Grant Garrison, as the co-founder and director of GOOD/Corps—set
to officially become a B Corp on July 1st—understands how to combat the
disconnect between messaging and consumer action. GOOD/Corps, GOOD
LLC’s media-for-change consultancy, was created to not only help
companies drive meaningful campaigns and position themselves as
corporate social responsibility mavens, but also to help nonprofits and
causes strengthen their relationships with corporations to create
With campaigns such as the Pepsi Refresh Project, Starbucks’ “Vote.Give.Grow.”
campaign, and the Google anti-piracy effort under his belt, Garrison
has a unique lens into what actually influences consumer audiences.
“You have to do some gentle hand-holding and provide small amounts of
guidance,” he said of directing customers through this cause-related
Consumers won’t act if pushed; they have to be presented with all the
information in order to help them make incremental changes that will
lead to new habitual preferences, which can shift profits ever so
slightly to favor social outcomes.
Does it matter?
At the end of the day, we have to evaluate how much service and
activism matter in our lives as consumers. If the brownie tastes the
same, does it matter that it was made by workers who have been given a
second chance and are also being treated well on the job? Well, here’s
another way to put it: if the brownie is going to taste the same either
way, and the price is comparable, why wouldn’t we choose to support a
The B Corp is “a tool among many tools, not the be-all, end-all of
social branding,” Ashoka’s in-house legal counsel Jonathan Ng said. He
feels that it’s about making informed choices as a consumer, and using a
variety of resources and methods to determine those choices. B Lab’s
certification process is yet another helpful way to brand a for-profit
company as having a triple bottom line, inside and out.
Be-all, end-all or not, it’s certainly becoming a powerful stamp of
approval. Suffice it to say that the more companies that become B
Corp-certified in the marketplace, the easier it will be to act on our