When you first look at it, it looks like a company grading system (and it kinda is), but nope, no A-Corps.
So what’s the go?
Core idea: the B Corporation (B Corp) certification is a private, third-party accreditation scheme aimed at businesses that aim to balance profit and purpose.
Specifically, it focuses on highlighting companies with a track record of positive social & environmental policy and impact, and provides a way for consumers and businesses to more easily and consistently identify these companies.
⚙️ Yeah cool, like the vibe, but how do companies actually become B Corps?
Landing the B Corp stamp isn’t just a cheeky Google form and boom, tick, you’re done, and you won’t have B Corp representatives knocking on your office door to ‘award’ you a certification out of the blue.
They’re a voluntary, paid certification which requires an initial assessment, documentation audit, and interviews in order to obtain. Beyond that, companies commit to a high degree of transparency & accountability in continuing to report on environmental, social and governance factors, and need to re-apply every three years to maintain their certification.
The process takes 6 to 10 months to complete, and only 1 in 3 firms that apply end up being granted the certification, with prices starting from $1000 for the annual certification fee (which goes up to $50,000 for the big hitters!)
Given the effort involved, what are they actually measured on?
Compared to the formal focus of public companies on shareholders, the B Impact Score methodology covers 5 impact areas across a wider stakeholder view:
Governance (the measurement and policies in place to ensure that the firm’s impact on the other four factors is clear)
Companies are asked tailored questions based on their size and industry, and ultimately receive a B Impact score out of 200.
80 is enough to get the certification, but remember, that’s only the top third of companies who apply, and the companies who apply are already a more ethically-conscious subset to begin with. The average score for businesses is around 51.
Despite the financial & administrative complexity of applying and maintaining certifications, when I first discovered the model, I was super buzzed about the emergence of a formal framework to guide businesses looking to make a positive social impact.
Beyond this, there is incentive and power of the B Corp certification as a ‘marketing tool’ and tangible competitive advantage to reward businesses who go above and beyond in ESG commitments.
But wait… are we seeing adoption in the tech & startup space, where many of the leading businesses of tomorrow are being built?
A ‘hyper-growth’ path seems like it can clash with the notion of sustainable business, and are startups willing to put in the admin to get certified when they have 100 other fires burning and product-market fit to worry about?
On the whole, it does seem to be less common for public companies to take up the accreditation in part due to operational complexities, and VC-backed companies tend to go this way.
However, there are a growing number of tech players jumping on the trend, including crowdfunding platform Kickstarter, insurtech Lemonade, BNPL Sezzle, help desk Help Scout, file sharing platform WeTransfer, and (formerly) Etsy.
In capturing the high performers across the board, I’m bullish on B Corps as a recognisable standard for forward-thinking companies to easily and reliably showcase that they index highly on these factors.
But how are our emerging businesses faring locally?
🌟 Who are the top B Corps in Aussie tech & startups?
What do they do? These folks are almost a household name toilet paper brand in Australia now, but aside from their cheeky branding and sustainable packaging, what makes them stand out is that they donate 50% of profits to help build toilets and sanitation infrastructure in low-income countries.
What do they do? A vetted platform for purchasing sustainable packaging, aiming to replace traditional plastics in the supply chain with reusable, recyclable or compostable materials that have been certified for sustainability.
What do they do? Okay, these folks are technically Kiwi, but a friggin awesome brand. The quick pitch: scrap your usual plastic shampoo and soap bottles, and switch to solid bars for beauty, health and haircare that are vegan, all-natural, sustainably sourced, and come in biodegradable packaging.
B Corp responsibilities are not legally enforceable: If a company fails to meet the B Corp obligations, there are no financial or legal penalties to the board or the company, unless the company has separately incorporated as a ‘benefit corporation’ or some other special classification. The need for legally binding principles around stakeholder-minded business is why we’ve seen policies like the Accountable Capitalism Act proposed in the US, to place B Corp-like standards on all companies above a certain revenue level.
Companies can score well on the core factors but still contribute to industries that have broader ethical concerns or engage in unethical business practices: Some examples of industries with certified companies include private prisons, alcohol, cannabis, for-profit education, buy-now-pay-later, animal products. There’s a wide range of opinions on these industries, and so the callout here is not that they’re inherently good or bad, but that B Corp certification in of itself may not be a sufficient filter for investors, consumers and workers to make responsible choices. Separately, there have been cases with B Corps engaging in tax avoidance, union-busting, and so forth.
Silicon Valley seems like a pretty dope place to work eh? Turns out, we are not unique in our view, getting a job in the valley is ruthlessly competitive and it attracts some of the best talent globally.
But whether you’re an engineer, product manager, designer, salesperson, marketer or recruiter, there’s one responsibility often missing that you will ALWAYS be measured on, whether explicitly or implicitly. Your impact.
Subscribe to our newsletter
Actionable advice and human stories on the careers of tomorrow
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
A home for young people creating the careers of tomorrow.
Oops! Something went wrong while submitting the form.
We acknowledge the traditional owners of country throughout Australia and recognise their connection to land, waters and culture. We pay our respects to their Elders past, present and emerging and commit to building a brighter future together. Our team works on the country of the Gadigal people of the Eora nation in Sydney.