The non-profit, B Lab, was founded in a Philadelphia suburb on July 5, 2006 with a Declaration of Inter-Dependence. Much like the Declaration signed 230 years earlier, this document proposed radical ideas. It envisioned business as a force for good in the economy. It envisioned a new type of business entity – the B Corporation – that was purpose-driven and that created value not just for shareholders of the business, but for stakeholders as well. The goal, in short, was to create an identity for purpose-driven companies similar to Fair Trade certification for coffee or USDA organic certification for milk.
In 2007, Abacus joined this movement and became a Founding B Corp. This gave us the distinction of being among the 46 companies that foresaw the potential of this movement. Fast forward to the present, and the community now includes 1966 companies, in 50 countries, across 130 different industries. We were joined by such well known companies as Patagonia, Seventh Generation, and Etsy. The community includes a solo photographer in Philadelphia; a telecommunications company in Afghanistan; a food company in Ankara, Turkey; a real estate development company in Toronto; and a tea company in Buenos Aires (1 of 13 B Corps in that city).
The movement, at present, has two distinct focuses. The first is to grow the community of “certified” B Corps. In order to become certified, a company needs to meet criteria in five distinct areas: environment, workers, customers, community, and governance. The scoring is weighted, depending upon the industry of the company being scored. For example, Abacus, as a financial planning firm is subject to different weighted criteria than Greyston Bakery, the Yonkers, NY-based bakery (and the supplier of brownies to Ben & Jerry’s – yum.)
Companies are ranked every year, and the top 10% are recognized with a Best For the World award. We’ve won “Best for Workers” every year, and this past year achieved “Overall Best for the World” for the first time having raised our score to the top 10% of all B-Corps.
An Impact Report documents the detailed scoring for each B Corp, which can be found at their website, and can be searched by company name, industry, or geography. Here is our Abacus Impact Report.
The second focus of the movement is to create, at the state level, a new form of incorporation, the Benefit Corporation. Under the traditional corporate form, a corporation is legally required to pursue practices that maximize shareholder value. This may inhibit the corporation from pursuing purpose driven practices.
A Benefit Corporation solves this issue by incorporating social purpose in its charter, and expanding the responsibilities of the corporation’s Board of Directors to consider a broader range of interests. These interests mirror the certification criteria of certified B Corps.
Maryland was the first state, in 2010, to pass Benefit Corporation legislation. At present, 31 states plus DC have passed similar legislation, with 7 additional states in consideration for passage. More information can be found here.
“Proud” is too inadequate a word to describe my feelings around our status as a Founding B Corp and “Best for the World” winner. I encourage you to use the B Corporation website to locate companies that you can patronize. Also, you can spread the word among companies that you know that would be good candidates to join the community.
