Holly Ensign-Barstow, the Director of Stakeholder Governance and Policy for B Lab, a nonprofit that certifies companies as B Corporations, describes the benefits of making sure a company's operations and business model include its entire social and environmental performance.
Q: What does B Lab's certification process entail for companies?
Ensign-Barstow: To fulfill the performance requirements for B Lab's B Corporation Certification, a company must first complete our B Impact Assessment (BIA), which is a free, confidential platform designed to help measure and manage a company's positive impact on its workers, community, customers and the environment. A company seeking B Corporation Certification must receive a minimum verified total score of 80 across all impact areas on the BIA. B Lab's verification process in order for a company to earn an overall reviewed score on the BIA includes sampling practices through a combination of phone interviews, documentation and onsite reviews. Each company must also meet legal requirements by adopting specific stakeholder governance criteria, which vary depending on where the company is incorporated and its legal entity type.
Q: What societal and stakeholder values do Certified B Corporations support?
Ensign-Barstow: Certified B Corporations can provide positive social and environmental impacts in many different areas. Here are a few examples of Certified B Corporations that focus on different impacts:
- Cascade, an industrial manufacturer based in Grand Rapids, Michigan, is committed to hiring people who have been incarcerated and has convinced more than 100 local companies to adopt their own prisoner reentry programs
- Aerofarms is addressing our global food crisis by building, owning and operating indoor vertical farms to grow safe, healthy food in a sustainable and socially responsible way
- Allbirds, dedicated to making sustainable footwear, has pledged that 100 percent of its wool will come from regenerative sources and all of its annual on-farm emissions from wool will be reduced or sequestered by the end of 2025
- RECIRC, a Black-owned, sustainable packaging company, aims to extend the life of packaging with a utility patented zero-waste, refillable, reusable and last-resort-recyclable packaging to preserve cosmetics, condiments and home care products, while reducing the use of plastic packaging
Q: What should multinational companies know about B Corporation certification?
Ensign-Barstow: For companies that are the most committed, like Danone, we have rebuilt B Lab's certification standards in order to allow large multinational companies to become Certified B Corporations. We are also helping a small number of multinational companies become certified. For other multinational companies, it will be a longer journey, especially because the change in fiduciary is a long process that includes educating investors. Last year, we launched a program called B Movement Builders, specifically created for multinational companies that are on this journey and know it will take a few years, but would like to start engaging with us now. We are working on both public policy and capital markets strategies that will allow us to engage with policy makers and investors in removing impediments for all multinational companies to become Certified B Corporations.
Q: What value do consumers receive from Certified B Corporations and other benefit corporations?
Ensign-Barstow: When purchasing goods from these companies, consumers can have a level of assurance that the companies are not using "purpose" as just a marketing tool. Instead, they are actually committed to treating their workers well, are contributing to the economic and social well-being of the communities in which they operate and put their impacts on air, climate, water, land and biodiversity first in their business practices.
Q: How can the Biden-Harris administration support Certified B Corporations and other benefit corporations?
Ensign-Barstow: The administration could centralize the process of setting new policies and regulation agendas for this business population in a central hub, like at the National Economic Council (NEC). B Lab, in partnership with the US Impact Investing Alliance, has been helping to lead an effort that proposes this idea with a coalition representing more than 50 businesses, investors and civil society organizations. The idea is that a White House Initiative on Inclusive Economic Growth housed at the NEC could serve as a forum within the White House to engage corporations and investors alongside the government to achieve shared goals. B Lab also shares the same policy goals as The Shareholder Commons.
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