What is a B Corp, and Why Should you Care?

Online • June 16, 2016

Businesswomen meeting

Thursday, June 16, 2016
1:00 PM - 2:00 PM EDT

Online hosted by ReadyTalk

Thursday, June 16, 2016 1:00 PM - 2:00 PM EDT

B Corporations are companies dedicated to creating social change through their business. But what does that mean?

Summary

00:02 Kim Coupounas: Terrific, I think I'll jump in here. This is Kim Coupounas from B Lab. Thank you so much to Kristy, and Johanna, and the team at Ellevate Network for hosting today. My colleague Jessica and I are really thrilled and honored to be speaking with members of the Ellevate Network, and wider audience as well. And we're so grateful to Sallie Krawcheck, and the team at Ellevate Network for the vision that you have had in building this powerful network of women, for investing in women and for helping to close the gender gap. It's something that's near and dear to my heart and I know it is to Jessica as well. One of the great things that happened this year was, Ellevate Network became a certified B Corporation. And so I wanna pass the baton to Kristy Wallace to share a little bit about why Ellevate Network has chosen this path and some of the things that make Ellevate Network special, beyond the things you may already know about them.

00:54 Kristy: Thanks Kim, and hello everyone. So happy to be talking to you today. To give you a quick overview on Ellevate, and why we decided to become a B Corp. Ellevate is a for-profit organization, but very mission-driven. We care very much about closing the gender achievement gap in business by giving women a community to lean on and learn from. And that's always been a guiding principle for us and it is the benchmark with which we make a lot of our decisions about the business and where the business is going. And we became a B Corp for many reasons, and many reasons we didn't even anticipate at the time when we made this decision. First and foremost, because we really do believe in the power of business to drive social change and to do great things in the world. And so that becoming a B Corp is very much in line with what we believed and how we viewed our business. Through the process of becoming a B Corp, we went through an evaluation, which you're going to hear more about in a few minutes, that enabled us to think about our business from many different lenses. What was our impact on the environment, on our community, on our workers? Do we have the right policies in place when we're making business decisions looking at all of the social impact opportunities?

02:22 Kristy: And we've made some great changes in the business because of that; in how we are making decisions and how we're running the business day-to-day and how we're looking at the business moving forward. Not only that, but as a member of the B Corp community, we're now connected with thousands of other companies that believes strongly as we do the power of business to do great things in this world. And so the community's robust. We've made great connections. We've really enjoyed the conversations we've had, but more so just for us, as a business, it's really helped to firm up a lot of the things that we believe. Ellevate, we're women owned, we're women led, we believe in the power of women in business. We've just returned from the United States, the White House Summit on Women and that was a great opportunity to really talk about this more and be a part of that conversation. We also feel very strongly about our employees. We have great benefits, unlimited vacation, we cover a 100% of health premiums. So as part of this B Corp process, you really look at how you treat your employees, what are the benefits and opportunities you offer them. And we have a deep commitment to closing the gender achievement gap. And so we focus on that in terms of our suppliers, in terms of our community, in terms of many of the decisions that we make. So becoming a B Corp was just a no brainer for us and it's continuing to pay off in ways that we never even imagined.

04:00 KC: So the passion and the commitment that you just heard from Kristy, is what draws a lot of people to the B Corporation movement. And I'm really proud to be an Ellevate Network member. If you're on the call and you're a member, that is you know the power of this work and the amazing things that Ellevate is doing for women. And if you're not a member, definitely consider it. I've been a member of other women's networking and business leadership organizations and this is by far the best that I've experienced. My name's Kim Coupounas, I head up B Lab's efforts here in Colorado. And I came from more of a traditional business career, but about 20 years ago, I founded a mission-driven enterprise with my husband, that became a certified B Corporation in 2008. And I was drawn to this movement for very much the same, or similar reasons to what Kristy just described about why this is important to Ellevate. So I'm gonna take you down a path and describe a little bit about the B Corp movement, the non-profit behind the B Corp movement, and why you should care about this. And then I'm gonna pass the baton to my colleague Jessica to share with you a little bit more about why companies are choosing this and what the path is all about.

05:10 KC: So we'll leave a little bit of time at the end of our talk to do some Q & A. And by the end, we know your time is really valuable, so by the end of this webinar we hope that you will be able to answer some common questions that you may have, or you may get about what B Lab is, what the B Corp movement is, what the certification is, and we want you to personally think about throughout this webinar one or two reasons that B Corp certification is right for your company. We all are values-driven people, but choosing this certification and going through the hard work of achieving it and being a part of a community, has a slightly different flavor for every different business and every different business leader and entrepreneur. And we hope that by the end of the webinar, you'll also know what your next step is in the path to B Corp certification. So if you choose to go down that path, you'll know the ABCs of that. This may be something that you choose to pursue to become a B Corp, but it also may be something you have to do just to measure and improve your impact on society and the environment.

06:15 KC: So let's start with this non-profit B Lab. Both Jessica and I work for B Lab. It's a non-profit that was founded about a decade ago, it's based in Wayne, Pennsylvania, it has affiliates all around the world. Jessica's in our San Francisco office, I'm in our Colorado office. And what we are up to is serving a global movement of people who are using business, the most powerful force on earth you could argue, as a force for good. We believe that businesses really can, not just make widgets for a profit, but make and do things in the world that solve foundational or intractable social and environmental problems. And we kind of think of the work that we're doing as a mountain; we're climbing a mountain toward the better world for all of us. Our vision is that one day, all companies will compete; not just to be the best in their sector or the best in their state or the best in the world at what they do, but the best for the world. And that they will care for their stakeholders with the same love and care that they have with their shareholders for all these decades. And as a result... Can you imagine a world where, if all companies did compete to be the best for the world, that we really would enjoy a more shared and durable prosperity for all, not just the lucky few?

07:34 KC: And in this mountain metaphor that we use, what we're really doing at a base level is building a movement of leaders, these beacon companies, like the Ellevate network, who are showing the way, they're showing the path up the mountain. And we all know there's many paths to the same summit, and lots of companies choose to do this is in different directions or up different pathways. Some first measure their impacts and figure out what their baseline is and they figure out what they're doing well, and where they're really missing it. Some build in mission line governance practices that help maintain their values that they've established into their company, so that if there's a transition in ownership or leadership, that that company's values remain intact. Some are doing it for other reasons, but they all lead up this mountain towards a better way of doing business, using business as a force for good and hopefully long-term shared and durable prosperity for all.

08:29 KC: What we are talking about here today, and I don't wanna mince words, is really the future of capitalism; it is the next evolution of business. We, in the 20th century talked a lot about shareholder capitalism or the shareholder-based corporation, and maximizing shareholder value at any cost in many instances. What we're talking about now is 21st century capitalism, stakeholder-based capitalism where we can create great companies that do incredibly well along traditional business metrics, and they create great positive social value and environmental value for their stakeholders. The wide-eyed environmentalists at Goldman Sachs say that companies that are leaders in sustainable, social and good governance policies have 25% higher stock value than their less-sustainable competitors. Now if you see Goldman Sachs saying things like that, you know that something is foundationally shifting in the marketplace today. PricewaterhouseCoopers says that there is a positive, statistically significant linear association between sustainability and corporate financial performance. So we know that sustainability pays; every credible source out there, whether it's Mackenzie or Harvard Business Review or Goldman Sachs or Pricewaterhouse or Accenture, they all are saying the same thing.

09:48 KC: So add to that 60 million plus conscious consumers who are demanding that companies and products be better for their families and themselves. There's $2.7 trillion in socially responsible investment capital out there, and over a 100,000 social entrepreneurs and responsible businesses including these beacon companies certified B corporations. And so yes, people are demanding, consumers are demanding better and most especially millennial consumers. For the last 20 years, we've seen this proliferation of identifiers or brands or logos that identify a specific product as good; whether it's USDA organic or a Fair Trade product or FSC certification for paper or Energy Star for an appliance. And yes, Cone Communications says that 90% of Americans say that companies must not only say a product or service is beneficial, but they need to prove it. What we're seeing now, especially among millennial consumers in the 21st century, is that they're looking for good brands, they're looking for good companies that are honestly walking the talk along the full spectrum of things that a company can do to be a good company. Yes, it's one thing to say you make an organic apple, but how were the people treated who picked that apple? What is the company like that is growing that orchard?

11:11 KC: So enter the B corporation. B corps are what Fair Trade is to coffee or USDA organic is to milk, but the B corp certification is much more comprehensive. It looks at everything that the company does, aside from the traditional metrics that are well in hand and well-measured like financial metrics, what we're looking at is their impact on other stakeholders, employees, the community, the customers, deep into the supply chain, the environment.

11:43 KC: And I wanna pause a moment and just make a distinction because there is often confusion in the marketplace between what is a certified B corporation and what is a benefit corporation, or a PBC or a public benefit corporation. A certified B corporation is a... Think of it as like a Good Housekeeping seal of approval but on a for-profit company. And the certification is conferred by this non-profit B Lab that Jessica and I both work for. And certified B corporations are companies that are meeting measurably higher levels of social and environmental performance, and they're making a public legal commitment to consider all stakeholders in how they do business. The certification is available to any for-profit company in any country, any corporate form. Now, related to that but separate is a corporate form, called the benefit corporation. It's a corporate form, it's taxed legacy corp or an S corp. And benefit corporations have a higher level of transparency, accountability, and purpose built into their legal DNA. And it's something that a company files for within their state or country of incorporation if it exists there. It's been passed now in 31 states throughout the United States, including Colorado and California as well as Delaware.

12:56 KC: So if you are in a company that's in one of the states where it's passed, or if you don't know if it exists in your state, if you can go to benefitcorp.net and learn more about where it has passed and where it's being enacted currently. It's also been enacted in Puerto Rico, in Italy, and it's in the works in many other places around the world. It's a legal entity that has the protection and the permission to consider its impact on stakeholders, not just shareholders. So, a benefit corporation can be a certified B corporation. For example, Patagonia in California is a certified B corporation and was the very first company in California after the legislation passed to become a California benefit corporation. You can also be a certified B corporation but not be a benefit corporation if you are, for example, an LLC. I hope that clears that up, but happy to answer more questions about that at the end.

13:50 KC: So certified B corps really are the leaders. They're leading the global movement of people using business as a force for good and they are meeting verified higher levels of social environmental performance, transparency and accountability. They have a public report on the Bcorporation.net website that shares how they scored on the B impact assessment, which is our online impact assessment, it's a free online tool that I'll share a little bit more about in a minute, and verified by B Lab. We actually look under the hood. Every year, about 10% of our community gets an onsite review, an audit basically, of what they've claimed about themselves, and it's a really rigorous standard and certification. So if a company meets this high bar, trust me that they are a company that you will want to buy from and count among your most favorite companies and brands.

14:44 KC: So, I referenced the B impact assessment, it's an online tool and it's a holistic assessment of what a company does in the world. It is... Sorry, I'm getting a phone call on my cellphone. It looks at stakeholders, customers, environment, community, the governance practices of that company, and especially how it impacts workers. And knowing who most of the audience is on this call, we thought we'd give you a look at one particular lens that is woven throughout the B impact assessment, and that is diversity and inclusion. Throughout the impact assessment, there are many different lenses that we have built into this world-class set of standards. And some of those practices are looked at from an operational standpoint, what is the day-to-day impact of running that business through that lens. For example, in diversity and inclusion, it would include worker practices and how they view the supply chain. We also look at it from an impact business model. Does the design or frame of your company create specific positive benefits or outcomes for one or more particular stakeholders? And then there's both direct and indirect ways that a company can build positive practices in a particular lens area, like diversity and inclusion.

15:57 KC: So, in direct areas, for example, practices that directly address under-represented populations, like gender or race or ethnicity, and indirect ways, like living wage or job flexibility. And so, for example, in the community section of the B impact assessment, there'll be lots of questions about, what is the ownership structure of your company? What's the makeup of your board of directors? How diverse and inclusive is your management team and your employee base? What is your gender pay equity? What are some of your hiring and promotion practices like? Do you have diversity training? Or in the worker's section it'll ask specific questions about your practices around maternity and paternity leave. Do you have policies that support breastfeeding mothers? Do you have benefits that include domestic partners in civil unions? Do you have healthcare that includes transgender and inclusive healthcare coverage? And many other things. And before I move on to the next section, I wanted to ask, Jessica, do you have anything to add on this particular lens?

16:58 Jessica: No. I think you've covered that really well. And what we've really worked to do throughout this assessment is really understand that our practices and, in this context, the practices that businesses have that impact women really do cover things that you might not think about traditionally. So, it's not just something that your HR team needs and should be thinking about but something that your supply chain manager should be thinking about, as well.

17:27 KC: Totally. So not surprisingly, this community of companies around the world, and it really is around the world in over 40 countries and there's over 1,700 of certified B corporations, it's good company to keep. This is just a smattering of some of the recognized brands that you might know within our community. And what you'll see here is a number of consumer goods brands that you would recognize, like Cabot Creamery or Badger or Seventh Generation, but there's also Cascade Engineering and AltSchool and Etsy and law firms, and everything from single person sole proprietorships up to multi-billion dollar corporations, multi-national corporations, that are choosing this path and they are measurably better than other companies out there. And not surprisingly, within our community, there is an incredible community of women-led, women-founded and women-owned companies, and just on this small smattering of companies, you can see Eileen Fisher, Badger, Revolution Foods, Happy Family, The Honest Company, New Belgium Brewing, Patagonia, Plum Organics. It's an amazing community of female leaders.

18:35 KC: And I wanna highlight one particular company that's near and dear to my heart, it's a company called GroundFloor Media, it was just certified this year. It's based in Denver, Colorado and I know their team really well. As I said, they're one of that group of companies that's women-owned, women-founded, women-led, and they just have an amazing culture there. They consider themselves the anti-agency. They really strive for work/life balance and blend within their team. Their benefits and how they think about the jobs that they create are all oriented around job flexibility and they actively state that human interests, the interests of their team, come first above all other things. And yes, their traditional benefits are really robust, but they have all kinds of cool non-traditional benefits, like paid volunteer time and a cash allowance for active lifestyle. They even have a play room in their office in Denver.

19:34 KC: They also launched a foundation called Get Grounded Foundation that gives community grants that are focused on at-risk Denver youth, so they have a really conscious give back to their community. And not surprisingly, they've been at the top of the list for Outside Magazine's best places to work for the last couple of years, including the top of the list, number one on the list, in 2015. And there are many companies in the community that I could talk about here, but I wanna highlight two in particular that you'll hear in the upcoming jam sessions. One is an amazing entrepreneur called Linda Lipsius who founded Teatulia, and Shamini Dhana, who founded Dhana Design. So if you have the chance to check into those jam sessions later this month in July, they're gonna be awesome.

20:22 KC: Rose Marcario, who's an incredible female leader herself and CEO of Patagonia has recently said that the B Corp movement is one of the most important of our lifetime. It's built on the simple fact that business impacts and serves more than just shareholders. It has an equal responsibility to the community and to the planet. Patagonia's been a 40-year experiment of what it means to be a responsible company and becoming a B Corp has ensured that our experiment will keep pushing forward. The founders of Patagonia, Yvon and Malinda Chouinard, are great examples of why this is important. Now they built this amazing company. They've handed the baton of leadership to Rose and an amazing group of other leaders. But one of the things that they think about at night is, "How do I make sure that when we've really moved on and we've passed our baton completely and have stepped out of the picture, what will Patagonia look like in 50 years, a 100 years? Will it still have those values deeply embedded in what Patagonia is and how it operates in the world?" And that's really what some of these standards are about, especially the legal and mission alignments standards that Jess will talk about in a little bit.

21:27 KC: So I just wanna give you a quick snapshot of how B Corporations, these passionate leaders, are manifesting their membership in the B Corporation community through their media and communications executions. So this is just a couple of examples. New Belgium Brewing certified beer campaign. Ben and Jerry's website and how they talk about their B Corporation certification on trucks and on websites and all sorts of things. Klean Kanteen and their point of purchase displays. Companies are putting it on their front windows, on their business cards, on their trade show displays, and they're also speaking with collective voice. And this is something that Kristy talked about a little while earlier, and that is the power of this community to work in concert towards a better future for all of us is astounding. And this is just one way that this is manifesting. There are B Corporations that are working in concert and showing up in concert at retail and this is an example of a couple of endcaps at New Seasons Market in California. And that's just the beginning. We're so excited about it. So I'm gonna pass the baton to my colleague, Jessica, who I adore and she's an amazing colleague to work with. She's gonna share with you a little bit about why companies are choosing this path and how to get started.

22:50 Jessica: Great. Thank you, Kim. And thank you to Kristy and Johanna for hosting us on this webinar and for everyone who's on the call. The fact that you've signed up indicates to us that your company is probably doing a lot of really impactful things for the community, for your workers, for the environment. And what I'm gonna talk about next is why we think that joining the B Corp movement will be valuable for your company in taking that next step and a little bit more about the process of how to get certified. So as we do this, and I work on our business development team along with Kim, and something that we've realized is that just like your company is unique, so is your path to B Corp certification. And so I know that webinars can be hard to be interactive, but what I'm gonna encourage everyone to do at this point is, if you can, open up a notes screen on your computer, maybe pull out a piece of paper and a pen, and as I'm going through these reasons, really identify the two or three reasons that B Corp certification is right for you.

24:00 Jessica: And this is gonna really vary based on your growth stage. It's gonna vary a little bit based on your industry, maybe based on your size. But really locking in these two to three reasons that the B Corp certification is right for you is gonna help you both communicate that internally as you go through the process but it's also gonna help you leverage your certification once you've certified, so that you can enter the community really knowing what you're hoping to get out of it. Because what we really see is that the folks that really are committed to leveraging their certification and to investing in it really get the most out of it. And I'm gonna talk a little bit about what they do get out of it. And then, I'm gonna move into the steps for certification in here. Folks that are on the call might be in different places in the certification journey and so really identifying for you what is that next step that you can take this week or this month to move that next step closer.

25:00 Jessica: So, why certify? Like I was talking about a little bit ago, there's eight or nine different reasons that we see companies joining the community, and what we like to do when we sit down with different businesses is really take a consultative approach. What are your business problems and how can certification help address those business problems that you're having? And like Kristy mentioned earlier, there's a lot of reasons that you might not even anticipate the certification helping you out that you're gonna to be able to really benefit from.

25:34 Jessica: So, one of the first reasons that we frequently see is around maintaining mission, and Kim did a great job outlining the pieces of this requirement and why it's important, and talking a little bit already about Patagonia. But for a lot of businesses, owners have a deep commitment to some social and environmental impacts really wanna make sure that that commitment is going to live on through new management secession and ownership. By docking the B Corp legal standards, you're going to bake the values of the company into your legal DNA and it's really gonna actually protect you as an owner and give you permission to consider non-financial stakeholders. So, Rose was highlighted in the quote earlier saying that B Corp's help ensure that this experiment in social and environmental responsibility will keep moving forward. Yvon Chouinard talked about it very similarly in 2011 when Patagonia became the first benefit corporation in California saying that Benefit Corp legislation creates a legal framework to enable mission-driven companies to stay-mission driven through secession, through capitol raises and changes in ownership. And as Yvon Chouinard and Patagonia mature, they're seeing the benefit of this even as they just spun off a new food line called Patagonia Provisions. And that this same commitment is baked into Patagonia Provisions that was in place for Patagonia.

27:06 Jessica: Moving from the legal side, this slide is really for the marketers and Kim talked a little bit about this in previous slides. But B Corp certification allows you to tell the story of your commitment to social and environmental impacts, and in that way allows you to differentiate from pretenders. We have a lot of B Corps that are layering multiple certifications onto their products, particularly if you're a consumer product company. But what B Corp certification does is it allows you to tell all of those stories. It allows you to tell the story of the sustainability of your product from an environmental standpoint. It allows you to tell the story of how you treat your workers. It allows you to tell the story of your charitable giving in the community and to wrap all of that together into one arc. So, here we have a couple of brands that have done a great job really leveraging their certification to differentiate from pretenders in this way. Fetzer Vineyards certified in the last year, largest organic winery in the country. They also pay all of their workers a living wage which in this industry is a really big deal. And they've just came out the gate with their certification, putting it on packs, putting it on the side of trucks, really using it as a way to tell this commitment that's been baked in to their company since the beginning.

28:30 Jessica: The third reason is around, that a lot of companies identify, is using the B Corp certification as a way to benchmark and improve performance. This can really be a tool to integrate a culture of continuous improvement around social and environmental performance into your company alongside all of your other ways that continuous improvement is really important for your business. And so, here's an example of Etsy, they came into the community with a score of 80. We see a lot of healthy competition within the B Corp community as folks wanna raise their score with each two-year recertification. And Etsy arranged an internal hackathon to engage all of their employees to figure out how could they move their score up at that next two year mark. And so the employees could choose what section they wanted to work on, brainstorm ideas about how to implement recycling policies, how to improve HR policies. And they went from an 80 to a 105 and in the process were really able to engage all of their entire company in their commitment to social and environmental performance in a really, really tangible way.

29:51 Jessica: The next thing we see as a big reason that the companies are joining the movement is around attracting and engaging talent. I'm based in San Francisco, there's a huge tech talent war, a lot of industries are very similar. And B Corp certification provides a platform to both engage your current staff, and to give employees more meaning in their work, and to communicate to new hires why this is really important. So, along these lines, we, this year, launched a new platform called B Work which is an applicant tracking system for B Corps that poses to our B Corp jobs board, which is the most visited page on our website. All of the time we're hearing, particularly millennials, but folks across industry, across age range, and professional level who say, "I wanna work in the business sector and I wanna work for a business that shares my commitments." And the B Corp community is becoming a really great place for folks to find places that they wanna work in that they feel aligned with.

30:53 Jessica: And it's not just on the recruiting side. We have, and this was referenced earlier, but we have a one day B Corp Leadership Development conference. I think we're now in five cities, including this year we're having one in Australia. It's a one day conference that's led by B Corps. It's for B Corps. And it's a great chance, both as a leadership development opportunity and as a learning and networking opportunity that this is something that you'll now be able to offer your employees as part of your certification.

31:30 Jessica: All right. So the next reason and then I'm gonna talk through about here is really around collaboration, and that collaboration happens a couple of different ways. And one is through an online community that we have called the B Hive which is basically like an exclusive LinkedIn for B Corps, and we also have an annual champions retreat, and our build sessions, a really great chance to collaborate with folks who are like-minded. And these collaborations results in people doing business together. I'm gonna do a little plug for a webinar that we're hosting next week on the steps to certification which is gonna highlight a B Corp Fairware which is a women-run business that has found 10% of their clients have come through their B Corp certification. And so, B Corps want to do business with one another, particularly if you're a B2B company, this can be a great place to find new business, and it can also be a great place to share best practices. You might be looking to redo your supply chain assessment process, and you can reach out to other B Corps in the community who've gone through the same process and receive guidance, and tips, and ideas. It's an incredibly collaborative community. And it can also just grow your networks. Again, as an individual who works for a B Corp, this is also just a great chance to find and build new relationships.

33:05 Jessica: Next reason here, save money and access services. So, we do, B Corps often do offer discounts to other B Corps. All of that's available on our online community, the B Hive. There's also some partnerships and discounts that are available to the B Corp community as well as, and this was even without our doing, some business schools, graduate schools have stepped forward and are now offering tuition and loan forgiveness programs to employees of certified B Corporations.

33:36 Jessica: Over the past couple of years, what we've also seen is the B Corp certification being a great tool to generate press. Whether it's Fast Company saying that B Corp is one of the 20 moments that mattered most over the last 20 years, or Fortune saying that being like a B Corp is one of the five business trends to master in 2016. We're seeing mainstream press as really recognizing B Corps. And what we often try to do is when we get a lot of those inquiries, to push it out to the B Corp community. And the other thing I'm gonna say here, too, is we just launched our inaugural issue of B The Change Media, which is a for-profit media company that's owned by B Lab that's really gonna be telling the stories of certified B Corps and other B Corps that are using the power of business to solve social and environmental problems. And so, we know that consumer awareness is important for this movement, and increasingly, the press is a great way for us to be building that awareness.

34:41 KC: Jess, if I could jump in there, too. One of the things that I would like to share about that Fast Company article is that among the 20 moments that mattered over the 20 years, in addition to the B Corporation movement are things like the iPhone, and Uber, and the Human Genome Project, which is just a remarkable testament to the power of what's happening in the business realm through the B Corp movement.

35:09 Jessica: Great. Thank you so much for really drawing that out, Kim. It was humbling for us to be listed next to those other important things.

35:19 KC: Game changers. Yeah.

35:23 Jessica: So, the last thing I'm gonna highlight here is around raising capital, so to the point that, and it came up earlier, with $2.7 trillion in socially responsible investments out there along with your B Corp certification, you're gonna get a GIIRS rating. And we have a platform called B Analytics that is used by funds, by investment firms, to find folks looking for investment capital. Getting listed on B Analytics exposes you to a 100 plus impact-focused investors. And so, for some early stage companies, this is a way to really demonstrate to the investor community the commitments that you have to a triple bottom line into your social and environmental impact.

36:08 Jessica: The whole point in the process of going through those seven, you have found those two or three that are most relevant for where you're at right now. And what I'm gonna talk now through a little bit about the steps to certification and it's 9:40, so we'll have a good 15 minutes once I wrap this up to answer any questions that you have, so people wanna be chatting in their questions, and we'll get to those once I finish this next section.

36:34 Jessica: So, now that you're convinced, or I hope that you're convinced, that your company should certify, we're gonna talk a little bit about how you can do that. So B Corp certification is available to for-profit companies of any size, of any industry and geography, and the assessment that you take is gonna be customized based on the size of your company, the industry you're in, and whether you're in a developed market or a developing market. So I did the T1 question here in terms of sole proprietors and when you'll start that assessment process, you're gonna be able to indicate how many employees you have and the questions are gonna slightly vary based on the positive impacts that are available to a sole proprietor compared to a large multinational company. And any legal structure can certify. Again, this is any for-profit legal structures so not 501c3's, and companies over one year can certify. We need to be able to verify a year of performance impacts, but we do have, for startups, a special Pending B Program which I'll cover very briefly at the end.

37:43 Jessica: So how does a company certify? Once you've identified the reasons that are really relevant for you about why you wanna join the community, it's a three-step process. First, you're gonna need to meet the performance requirement by completing our free online B Impact Assessment and you're gonna need to score a minimum of 80 out of 200 points. I'm gonna talk a little bit more about that in a second. Second, you're gonna need to meet the legal requirement, so determine the path for your corporate structure and state of incorporation and then, third, you're gonna make it official.

38:16 Jessica: So let's talk a little bit more about meeting the performance requirements. So, our B Impact Assessment measures the positive social and environmental impacts of your company on the customer's environment, community, governance and workers. And again, it's gonna be tracked based on the size of your company, based on your geography and based on your industry. And it's gonna ask you to identify these positive practices and policies that you have. So as you go through the assessment, you're not gonna dock points, but rather what you're doing is you're trying to accumulate as many positive points as possible that are quantified by our assessment.

39:02 Jessica: Next, you're gonna meet the legal requirement, or maybe you'll do this simultaneously while you're going through the B Impact Assessment and working on the performance requirement. And this is, again, gonna vary based on your type of incorporation and the state in which you're incorporating. So there is a lot of resources on our website and there's one page in particular called The Legal Roadmap, I believe it's called, that's gonna walk you through in how you identify; what type of corporate structure do you have, where are you incorporated, and then it's gonna tell you what the legal requirement is for you. For some folks that's gonna be benefit corp adoption and for other folks, particularly LLCs, you're just gonna have to adopt a paragraph into your articles of incorporation. And this legal requirement is going to bake the values of your company into your legal DNA, and it's gonna give you that protection and permission to consider non-financial stakeholders.

39:57 Jessica: And once you've done this... So on the performance requirement side, you've completed the B Impact Assessment, you've submitted it, we have a review call with a member of our assessment review team, and you've met that bar of 80 at minimum out of 200 and you've met the legal requirement and you have proof to show that. You'll be able to kind of move into the final steps, which is signing the B Lab Term Sheet, which declares that your certification term is for two years. And that if you're randomly selected for an onsite review that you'll comply with that part of the process. You're gonna sign the Declaration of Interdependence, which has some really phenomenal language about this new sector of the economy that's being developed, and you're gonna pay the certification fee. And the certification fee is annual and it's based on your company's revenues, so it's kind of a sliding scale in that way.

40:50 Jessica: And then finally, once you've completed those steps, your profile and that scorecard, of your top local scores, so not your question local responses, but that aggregate impact is gonna be public-facing enough to meet that transparency requirement. So anybody's gonna be able to look and see how you're performing on any of these five sections of the assessment. This process, we could talk a lot more about this and we're actually giving a webinar that's a much deeper dive about the steps in the certification process, and it's gonna give you some tools and tricks about the process. So, I'm gonna recommend, if you're really interested in going through this process and if you're the one who is shepherding the process, that you attend that webinar next week.

41:37 Jessica: So that's it right now for the reasons to certify and the steps in the certification process. My real recommendation here, and again, if you're not on the B Impact Assessment, it's a free tool, it's a guardrails for running a good business. I really recommend checking it out. You can go to bimpactassessment.com/bcorporation and it's, again, even if you're not interested in certification, it's a really, really great tool. And I think here, we're gonna open it up for some questions and maybe Johanna is gonna highlight some ones for us to talk about?

42:17 Johanna Pulgarin: Yes, absolutely. Thank you, Jessica, and thank you, Kim for that really great and informative presentation. Just a reminder for anyone listening, if you haven't yet sent in your question, please do so using the track feature on the left-hand side of your screen, and I do have a few coming in already. That first one, Jessica, you sort of touched upon briefly, but I was wondering if you can maybe go over that again, if you could please address how smaller single-proprietor companies meet requirements on benefits.

42:50 Jessica: Yeah. We have a lot of sole-proprietors in the B Corp community, and the first step is gonna be making sure that you're in the right track of the assessment, so that the content is really relevant for you. And part of, most likely, the biggest challenges that sole-proprietors have in the process, is needing to really ensure that the documentation is in place for the things that you're doing in your business. So we're gonna cover in that webinar next week and we have a couple of recorded webinars on how to get through that documentation, but again, a lot of sole-proprietors are able to join the community. A large percentage or a significant percentage of our community is sole-proprietors. And in some ways, while the documentation is probably gonna be one of the biggest challenges for sole-proprietors, in other ways, because you don't have to do a lot of collaboration across departments, you might even be able to go through the process a little bit faster. Kim, would you add anything to that for sole-proprietors?

43:51 KC: No, I think that's terrific. Great answer. You covered it.

43:58 JP: Perfect.

44:00 KC: So Joanna, it looks like there's a great question about... Harinee Sekar asks, "Are the B corp certified organizations incentivized to increase their B Assessment score? How do you differentiate a company that scores 80 out of 200 versus 200 out of 200?" And I'll address a couple of answers to that question. First is, we actually have not had a company that's earned 200 out of 200. It's an incredibly hard thing to achieve. Our highest B Corp, I think, is in the 160s now, and most B corps come really just over the bar. It's very hard to achieve that 80 points. Typical company that comes in and takes the B Impact Assessment for the first time, if they're not already a mission-driven company, tends to score in the 30s. And then, the companies that have pretty strong values work very hard to get over that 80-point bar.

44:50 KC: And so, you can be assured that if a company is a certified B Corp whether they're 80 points, 90 points, or 140 points, they have world-class best practices in terms of how they operate their business. And in terms of incentivizing companies to increase their B Impact Assessment score, there is a lot of friendly competition as Jess pointed out. A lot of the companies, especially when they're in the same sector, try to one-up each other in a friendly way to get better scores. But there's also the fact that the B Impact Assessment goes through a new iteration every two years. And every two years, it gets harder. So to maintain your certification, you actually, typically, have to improve your practices to maintain your certification. Jess, do you wanna add anything?

45:39 Jessica: No, I think that really covered it well. And something else that happens is some companies go through the process and they might have hit the 80 bar, but they wanna score a couple more points, so they're gonna do some improvement, impacts, and they're gonna wait to join the community with that higher score. The other way that we incentivize it, and I don't think you talked about this, Kim, but I apologize if you did, is through our Best for the World competition. So every year, we highlight the top 10% of our community in a series of awards. And this year, with the birth of our new media company, B the Change Media, it's really gonna be a bang. It's based in Berkley, California and there's gonna be a whole series of events around it where we announce the top 10% of our community in each of the five sections, and the best for the world. So the top 10% of the community with that total score. So that's also a great chance. There's a bunch of press releases around that. It's a good chance for some media coverage, and that also incentivizes folks in the community to really think about how they can improve some of their impacts.

46:49 JP: Great. Thank you, guys. I'm just looking through some more of our questions. So we've had several come in. Let's see, this one reads from a listener in India. She's interested in knowing if there are any samples of companies from India that are B Corp certified or if you think that there's enough reach in other geographies compared to that in the US?

47:09 KC: So I'll address that, and then I'll ask Jess to step in. Some of our fastest-growing markets for B Corp certification and the growth of the B Corp movement are not in the United States. While it was founded here in Wayne, Pennsylvania and is very robust and active in the United States, it's actually growing very fast in South America. There's a South American affiliate called Sistema B. It's also growing fast throughout Europe and in Australia and New Zealand. A number of Asian countries. We're seeing that it's very nascent in India. We have a lot of individuals who express interest in B Corp certification. I think maybe, we might have had our first B Corp certification from an Indian company, but Jess might know more. But if you're passionate about using your business as a force for good, you can be the part of the vanguard that brings it to India and helps to take off there. Jess, anything to add on that question?

48:10 Jessica: No, not really. I think that the regions where we've grown outside of the US the fastest are where we have global partners. And so we have a very large B Corp community in South America, a very quickly growing movement in Australia and New Zealand, as well as in the UK and in Europe. And we have had a lot of interest in East Asia. I think less interest to pinpoint in South Asia. But there's also a leadership opportunity there, and the way that we've grown globally is really companies putting up their hand and saying, "I think that this would be really great for our region. How can I be part of the birth of this movement in my local context?" And so we really do rely on and have relied on the leadership of B Corps and perspective B Corps, and businesses using business as a force for good to grow and scale this movement. So just because we're not there yet, doesn't mean that there isn't interest.

49:14 KC: Totally. Spot on Jess thank you.

49:18 JP: Great that's so exciting to hear. Our next question reads, "Do you find B Corps also working with other excellence models, for example the Baldrige Performance Excellence model?"

49:33 KC: So, I don't know that particular standard but what I will say is that embedded in the B Impact Assessment are, not all of definitely, but most of the world's recognized best practices for good business practice. They are embedded in the specific questions. You'll be asked a specific question that asks if you have achieved certain certifications, or are abiding by certain global externally recognized best practices. And often times, as Jess pointed out earlier, a company, for a example a consumer goods company, will be a certified B Corporation but they also happen to be USDA certified organic. And they also happen to use FSC certified papers in all of their printed materials. Or they happen to be LEED certified if they're a building. Because they're leaders they often achieve these other certifications and use these other recognized standards to measure and to stay on this path towards continual improvement.

50:40 JP: Perfect, thank you guys. We have time for just one more question. So I'll go ahead and throw that out. Could you give a quick overview once more of the difference between a Benefit corp versus a B Corp?

50:55 KC: Since I gave the first round of that I'm gonna hand it over to Jess and ask her to give another flavor on it.

51:03 Jessica: Definitely. So the difference is that a certified B Corp has met both the performance requirement and the legal requirement, and is a certification that is administered by the non-profit B Lab. A benefit corporation is a corporate form. So any company, if you go to create a new company tomorrow and you go file at your state, you can choose to elect the benefit corporation corporate form. And this is going to require some transparency and some accountability, but it says nothing about your performance, and there's been no validation as to how your company is actually performing along these standards. We've been a part of the creation of the benefit corporation form and are part of having that passed in the 31 states in the US where it's available. But again, it's a piece of that mission-aligned structure that does not verify anything about the performance, which is what happens in the B Corp certification process. So hopefully that's helpful. Hopefully this slide illuminates some of that. If you go to benefit corporation, I think it's.net, it might be.com.

52:32 KC: Benefitcorp.net.

52:34 Jessica: .net. So you can learn more about the corporate form, and then if you go to bcorporation.net, that's where you can learn more about the certification that we confer.

52:48 JP: Great, awesome. Guys thank you so so much for the wonderful jam session, super informative. And thank you everyone for listening in today. If you have any questions for Jessica, Kim, or Kristy, please feel free to contact them with the information up on the screen. I'm gonna actually ask that we get to that one. Perfect, thank you. And we'd love to here from you as well, so please feel free to reach out to info@ellevatenetwork.com or through our Facebook, Twitter, and LinkedIn pages. And of course don't forget to sign up for our next jam session in the B Corp series on June 28th, where we'll talk about the women behind B Corps with the speakers Shamini Dhana, founder of Dhana, Inc., and Linda Lipsius, founder of Teatulia Organic Teas. This jam session has been recorded and will be available to view on our website. Thank you everybody. Thank you so much Jessica and Kim for that great presentation. Have a great day.

53:38 KC: Thank you all.

53:39 Jessica: Thank you everybody.

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B Corporations are companies dedicated to creating social change through their business. But what does that mean?

Learn about B Corps - why they exist and how they are leading a growing global movement of people using business as a force for good.

Join us on June 16th to better understand how a B Corp certification could benefit your business and the world. Also hear about Ellevate Network’s journey to becoming a B Corp.

Speakers:

  • Kim Coupounas, Director at B Lab Colorado
  • Jessica Friesen, Senior Growth Strategist at B Lab
  • Kristy Wallace, President at Ellevate Network

Speakers

Kim Coupounas
Kim Coupounas

Director at B Lab Colorado

Kristy Wallace
Kristy Wallace

President at Ellevate Network

Jessica Friesen
Jessica Friesen

Senior Growth Strategist at B Lab

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