B Corp Background

As I counsel clients in doing business with big corporations, one item that is quickly moving from a nice to have to a need to have is a commitment to ESG (Environmental, Sustainable, and Governance) goals.  ESG was a big focus at a conference I attended last Fall where corporations encouraged their suppliers to develop and communicate their sustainability plans.  In my year end wrap up, I noted that I had been developing a course on creating a sustainability statement and In January I mentioned that I would be applying for B Corp certification this year.

B Corp certification is a global standard for large and small businesses that want to quantify and improve their commitment to ESG goals. Their vision is a world where Business is a Force for Good.

Administered by B Lab, B Corp certification uses the UN Sustainable Development Goals as a universal standard. Their assessment asks questions that determine what a company is doing to move toward those goals and identifies gaps where they can do more.

I had already completed the free B Lab assessment and decided this was the year I was not only going to measure my commitment, but showcase it.  I had also heard the certification was extremely rigorous, and time consuming and that the standards were in the midst of an overhaul.

Right now, I in the middle of the verification process which, I’m told, is a little less than halfway through so I wanted to take stock of the process so far. My journey will be different than other companies, partly because the process is so customized and partly because I know the process will likely change pretty soon.

What to know before you get started

Still, there are some things I’d like to point out for other business owners who are thinking of going through the process to demystify and clarify what you can expect.

  • The assessment is a good starting point.

    The B Lab assessment is a) free and b) available online to get started. Over 150,000 companies have already taken the B Lab assessment. In order to proceed to the certification process, you need 80 points in the assessment.  Significantly fewer companies are B Corp certified  than take the assessment. What that tells me is that there is value in the assessment alone to start measuring and evaluating how your ESG commitment measures up.

  • The assessment is just that, a starting point.

    I went into the verification process pretty confident because I had way over the 80 points that are required before you can submit for certification.  At the very first review of my company, those points got knocked down to 79. At 79 points, I was no longer eligible to even be in the verification process so I had to remedy one thing immediately. I needed to change my legal structure to reflect my commitment to ESG.

  • After the assessment, your legal structure is the next big consideration.

    Changing my legal structure from a regular LLC to a benefit LLC was pretty straightforward, once I knew what I had to do. Many states have a designation for (public) benefit corporations and I had assumed that I would need to convert my company to a corporation in order to proceed.  I figured I’d need an attorney and to at least alert my accountants if I was going to have a different tax designation. B Lab, however, provides a handy checklist to show you what you have to do to meet their requirements, organized by State and the existing legal structure of your business. In Maryland, I could simply convert my LLC to a benefit LLC by amending my operating agreement. As the only member of the LLC, I could do  this fairly easily simply by revising the documents and submitting them online.

  • Getting to 80 points isn’t the end of the process, but the beginning.

    With my legal status in order, I was now back up to over 80 points and could continue the review process.  I provided back up documentation for my assertions in the assessment and a third party reviewer went over them to make sure my part was complete. Even without the whole verification process, I still had a valuable snapshot of my goals and a helpful guide to what I could do next to improve.

  • The verification process (so far) hasn’t been as painful as I thought.

    Part of the reason for this is that I did manage my expectations that it would take months. The assessment itself – with 200 questions that require back up documentation – was far more likely to get pushed off in favor of more urgent tasks. Once I submitted the application, though, the analyst reviewing my file communicated with me through the assessment platform, leaving comments and questions on specific answers. The system emails me and follows up when I have an outstanding task.  Explaining my answers to questions hasn’t proven to be too onerous.

  • Being included in the community starts right away.

    Simply by being in process, I was invited to an event at American University by B Academics. I was invited to contribute to discussions about challenges and opportunities within the ecosystem and met leaders within that ecosystem.  The picture at the top of this post shows the design thinking process that was part of that event.  I felt welcomed right away and have already followed up with a number of new colleagues.  I also learned about an event that I’d love to attend next year, specifically for women in the B Corp movement.

Coming soon: Next Steps

I will provide a part 2 to this once I go through the next steps but I write all this in order to manage expectations.  It’s a long process, and can be arduous. Breaking the whole thing into smaller steps will make it doable and even less painful.

Also, the assessment and process will likely change in the not too distant future so I’m curious what that will mean and will keep you apprised.

In the meantime, if you’re interested in getting started, let me know. My colleague Mark and I can help you through the assessment if you get stuck. If you do get stuck, we can also help you find value in the process by showcasing what you are doing now.

And if you’re already B Corp certified, let me know that too! I’d love to hear how you’re leveraging it and what your experience has been.