The B Corp Movement: We’re at the inaugural Marketing Society Scotland conference – talking about all things B Corp. Always Be Content is featured on the panel alongside fellow B Corps Rationale, Muckle Media and Material. We’re discussing how B Corp certification helps businesses and brands stand out. By showing commitment to social and environmental responsibility, you can make the world a better place – and build trust with business partners and customers.
What is B Corp Certification?
As the Harvard Business Review wrote in 2016, the business model orientation of many corporations is undergoing a period of transition. Since the 1970s, corporate governance practices have primarily focused on maximizing shareholder value. However, as the 21st Century pushes on, there is an increased emphasis on other stakeholder values, particularly social and environmental concerns in addition to profit. This shift has become known as a “triple bottom line” orientation: with a broader focus on people, planet and prosperity.
Enter Certified B Corporations, or social enterprises verified by B Lab, a US-based global NFP organisation. This certification is based on how well companies create value to non-shareholding stakeholders – like the local community or environment. According to B Lab, “B Corp Certification is a designation that a business is meeting high standards of verified performance, accountability, and transparency on factors from employee benefits and charitable giving to supply chain practices and input materials.”
To achieve B corp. certification, a company must do the following:
– Demonstrate high social and environmental performance by achieving a B Impact Assessment score of 80 or above and passing their risk review. Multinational corporations must also meet baseline requirement standards.
– Make a legal commitment by changing their corporate governance structure to be accountable to all stakeholders, not just shareholders, and achieve benefit corporation status if available in their jurisdiction.
– Exhibit transparency by allowing information about their performance measured against B Lab’s standards to be publicly available on their B Corp profile on B Lab’s website.
Advantages of B Corp Certification
What are the tangible benefits of a B Corp certification?
Differentiation in the Market:
– Build Trust and Improve Loyalty: Being a certified B Corp positions a brand as one that prioritises people and the planet, as well as profit. In a competitive market, this can attract ethically conscious consumers and business customers who prefer brands with strong values, that are mission-driven beyond just make profits.
– Highlighting B Corp Certification can help a company stand out in a crowded field of certifications and develop deeper trust with consumers and business customers. Especially younger people who increasingly factor in a company’s environmental and social commitment when making purchases – according to a recent research study.
– Credibility and Transparency: The rigorous B corp. certification process adds credibility and trust to a brand – setting the company apart from others making unverified sustainability claims. This transparency can earn trust with consumers and business customers.
– Customers Seek Purpose Driven Companies according to a report published in Forbes Magazine, citing a study conducted by Sezzle, a buy now pay later fintech company. Charlie Youakim, CEO of Sezzle, stated “Millennials, Gen-Z, and the generations that follow them are becoming more and more loyal to companies that not only talk about social good but act on it. They extend trust towards purpose-driven brands.”
Outperform Peers:
B Corp UK research shows that B Corps out-perform their UK peers across several business metrics. Compared to data from surveys of UK SMEs, they found that B Corp SMEs, on average, enjoy:
– Faster growth in turnover and employee headcount, with higher expectations about future growth.
– Greater levels of employee retention, engagement and diversity.
– More robust governance processes.
– Greater focus on civic and community engagement.
– Higher levels of innovation.
– The same likelihood of success at securing external finance.
Attraction and Retention of Talent:
– Employer Branding: B Corps are often seen as purpose-driven organizations, making them more attractive to employees who seek meaningful work. According to research by Deloitte, purpose-driven companies are three times more likely to retain talent due to higher levels of employee engagement and job satisfaction.
– Employee Engagement: Purpose-driven work increases employee engagement and morale, which can translate to higher productivity, innovation, and better service—all which can help drive growth.
Appeal to Like-Minded Investors and Strategic Partners:
– Access to Responsible Investors: Many individual and institutional investors today are looking to invest in companies that demonstrate strong environmental, social, and governance (ESG) performance. A B Corp certification signals that the brand is aligned with these values, making it more appealing to socially responsible investors.
– Partnerships and Collaborations: Other purpose-driven companies, B Corps, and brands committed to sustainability are more likely to partner with or collaborate with certified B Corps, opening doors for strategic growth opportunities.
Increased Customer Preference, Retention and Acquisition:
– The 2023 Conscious Consumer Report published in Australia reported that many consumers are willing to switch brands or companies to support those that are doing good, and boycott those that are not.
– Loyal Customer Base: B Corps often cultivate deep loyalty among customers who often prioritise ethics over price considerations. This loyalty leads to higher customer lifetime value, better retention, and positive word-of-mouth.
– New Customer Segments: As consumer and business interests in sustainability grow, B Corps can tap into new market segments that are specifically looking for businesses with ethical and sustainable practices.
Profitability:
– Improved Efficiency: B Corps often implement resource-efficient practices that reduce waste and costs in the long term. Sustainable practices can lead to operational savings while fulfilling consumer and business demand for responsible products / services.
– Command Higher Price Points: Many consumers and businesses are often willing to pay a premium for products and services from companies they perceive as more responsible. The B Corp label allows brands to justify higher prices by delivering added value through ethical business practices.
By obtaining B Corp certification, businesses demonstrate their commitment to using their business model as a force for good, while potentially reaping significant operational, reputational, and financial benefits.
Tag and share @alwaysbecontent
