B Corporation

B Corporation
Name	B Corporation
Type	Certification
Founded	2006
Founder	Bart Houlahan, Andrew Kassoy, Jay Coen Gilbert
Area served	Global
Industry	Certification, Corporate social responsibility, Sustainability

B Corporation B Corporation is a private certification administered by a nonprofit organization that evaluates companies for social and environmental performance, accountability, and transparency. It distinguishes firms through a standards-based assessment and legal requirements, aiming to reshape capitalism toward stakeholder interests involving workers, communities, and the environment. The program has influenced corporate governance, public policy debates, and marketplace branding across multinational corporations, small businesses, and social enterprises.

Definition and Purpose

The certification assesses companies against a comprehensive set of criteria covering governance, workers, community, environment, and customers. It positions companies as mission-driven actors in the manner of social enterprise and cooperative movement models, contrasting with traditional shareholder primacy exemplified by cases such as Dodge v. Ford Motor Co. and debates surrounding stakeholder theory. The purpose is to provide a credible third-party label similar to initiatives like Fairtrade, LEED, ISO 14001, and Forest Stewardship Council that signals commitment to broader societal goals. The initiative serves markets, investors such as impact investing funds, regulators including lawmakers drafting benefit corporation statutes, and nonprofit advocates like Oxfam and Amnesty International that monitor corporate behavior.

History and Development

The certification was established in 2006 by entrepreneurs associated with the social entrepreneurship community, building on precedents set by organizations such as Ashoka and Skoll Foundation. Early growth coincided with a rise in corporate social responsibility frameworks and high-profile corporate scandals like Enron and WorldCom that spurred demand for accountability mechanisms. The program expanded internationally, engaging with legal reforms in jurisdictions that adopted benefit corporation law or equivalent statutes including states like Delaware, California, and countries such as United Kingdom, Canada, France, and Chile. Strategic partnerships with networks like B Lab affiliate partners, philanthropic funders including Rockefeller Foundation and Gates Foundation-aligned projects, and collaborations with standards bodies such as Global Reporting Initiative aided legitimacy and diffusion. Milestones include iterations of the assessment, global summits, and notable corporate certifications that drew media coverage in outlets like The New York Times and The Guardian.

Certification Standards and Process

The assessment framework is rigorous, with quantitative scoring across categories mirroring constructs used by Sustainability Accounting Standards Board, Global Reporting Initiative, and academic measures from Harvard Business School and Stanford Graduate School of Business. Applicants complete an evidence-based questionnaire, submit documentation, and undergo verification including background checks and site visits performed by accredited reviewers and auditors with expertise similar to practitioners at PwC, KPMG, and Ernst & Young. Scores determine eligibility; companies must meet minimum thresholds and adopt legal commitments analogous to benefit corporation statutes and governance amendments found in filings to institutions like Secretary of State (United States) offices. Recertification occurs periodically, with transparency via public profiles used by investors, procurement officers at institutions such as United Nations Global Compact signatories, and consumers guided by media such as Fast Company and Forbes.

Legal and Corporate Structure

Certified companies often adopt formal legal changes—amending charters or registering as benefit corporations where available—to embed stakeholder considerations into fiduciary duties. Jurisdictions offering statutory forms include Delaware General Corporation Law amendments, specific statutes in states like Vermont and countries with corporate governance reforms influenced by comparative law scholarship from institutions like Yale Law School and Columbia Law School. Legal counsel from firms such as Gibson Dunn and Skadden, Arps, Slate, Meagher & Flom has assisted clients with compliance and board resolutions. The certification body itself operates as a nonprofit governance entity with a board of directors, strategic advisors from academia including Harvard Kennedy School fellows, and partnerships with impact investors and policymakers.

Impact and Criticisms

Proponents claim certification drives measurable improvements in worker conditions, environmental footprints, and community investment, citing case studies and empirical research from universities like University of Pennsylvania and University of California, Berkeley. Critics argue that the standard risks greenwashing, inconsistency across national contexts, and potential conflicts of interest where fee-based certification intersects with advisory services—concerns raised in commentary from outlets such as The Economist and critical scholarship in journals like Harvard Law Review and Journal of Business Ethics. Legal scholars debate the effectiveness of governance tweaks versus statutory enforcement, comparing outcomes to regulatory regimes exemplified by Securities and Exchange Commission actions and consumer protection enforcement by agencies like Federal Trade Commission. Ongoing reforms address transparency, assurance, and the balance between voluntary standards and mandatory regulation, with involvement from multilateral bodies including Organisation for Economic Co-operation and Development and World Bank initiatives.

Notable Certified B Corporations

Notable organizations that have obtained certification include multinational and national firms across sectors: Patagonia (company), Ben & Jerry's, Eileen Fisher, King Arthur Baking Company, Seventh Generation (company), Danone North America (various subsidiaries), Warby Parker, Allbirds, Kickstarter, Natura &Co, New Belgium Brewing Company, Method Products, Athleta, Dr. Bronner's, The Body Shop, Etsy, REI (select entities), Chobani, Stonyfield Farm, TOMS Shoes, Burt's Bees, Hootsuite, Triodos Bank, La Ruche qui dit Oui!, Grameen Bank-affiliated enterprises, BRAC partner ventures, and numerous certified small and medium enterprises featured in reports by McKinsey & Company and Boston Consulting Group.

Category:Certification