November 6, 2011
Corporations B'ing good
I don't know about you, but I'm a sucker for videos of TED talks. I like TED talks about astrophysics, about how to tell when someone is lying, and about how leaders inspire action. Pretty much, I'll watch a TED talk on any subject.
So I was especially interested to find a TED talk about corporations. Specifically, I discovered a talk by Jay Coen Gilbert, a founder of B Lab, the nonprofit that certifies "B Corporations." The talk gives a quick overview of what they do, peppered with phrases like "conscious capitalism" and "using business as a tool for social change."
I recently met another B Lab founder at a corporate law roundtable and got a chance to hear more in person about this new kind of corporation. At this early stage, I find myself simultaneously intrigued and somewhat skeptical of the project.
Here's the gist. The "B" in "B Corp" stands for "Benefit." The idea is that the legal structure of the B Corp requires decisions that are good for society, not just shareholders; it empowers companies making operating and liquidity decisions to consider employees, other stakeholders, and the environment in addition to shareholder value.
So far Maryland, Vermont, California, Hawaii, Virginia, and New Jersey have passed B Corp legislation. Other states considering the legislation include Colorado, New York, North Carolina, Pennsylvania, and Michigan.
B Lab, a nonprofit, certifies B Corps -- kind of like the certification of a "fair trade" cup of coffee -- with the idea that consumers will be better able to discern between companies that use marketing to look good and companies that are actually doing good things. More broadly, it seems the hope is that this will help socially and environmentally conscious folks to buy products and invest in companies which align with their values.
The standards for this third party certification are focused on social and environmental actions, accountability, and transparency. Currently there are more than 450 certified B Corps. I've never heard of most of them, but from shopping for things like "green" household products and hipster eyeglasses, I'm familiar with some of them like Method Products, Seventh Generation, Dansko, Peeled Snacks, Warby Parker, and Numi Organic Tea.
The B Corp seems to be part of the evolution of corporate social responsibility, and it's certainly timely with the public outcry for corporate change. But I wonder if the existence of a separate type of corporation somehow suggests that other corporations shouldn't or couldn't also engage in similar socially and environmentally conscious practices. This is a development I'll continue to follow with interest.
November 6, 2011 | Permalink