GROWING THE GLOBAL MOVEMENT. Juan Pablo Larenas, cofounder and executive director of Sistema B, speaks about B Corporations to an audience in São Paulo, Brazil.
A lot of progress has been made since The B Corp Handbook was first published in 2014. Here are some of the major developments in the B Corp movement since then.
There are now more Certified B Corps based outside than inside of the United States. There are Certified B Corps in more than sixty countries, including Afghanistan, Australia, Brazil, Chile, Kenya, Mongolia, the Netherlands, and Zambia (to name a few).
This expansion is due, in large part, to the tireless work of B Lab (the nonprofit behind the B Corp movement) and its partners around the world.
These global partners include B Lab U.S., B Lab Canada, Sistema B (Latin America), B Lab Australia and New Zealand, B Lab United Kingdom, B Lab Europe, B Lab Taiwan, B Lab East Africa, B Market Builders in Hong Kong and Korea, and the B Corp China team.
Private Equity/Venture Capital Investors
Mainstream investors are becoming much more receptive to the B Corp idea. For example, B Lab has collected publicly available information on more than $2 billion of investment in B Corps and benefit corporations by 150 different venture capital firms to date.
Indeed, nearly every major Silicon Valley venture capital firm has invested in a Certified B Corporation and/or a benefit corporation. This includes Andreessen Horowitz, Benchmark Capital, Founders Fund, Goldman Sachs, Greylock Partners, GV (formerly Google Ventures), Kleiner Perkins, New Enterprise Associates, and Sequoia Capital.
Another important development has been growing interest of multinational organizations in the B Corp movement.
For example, Danone, a $25 billion publicly traded food conglomerate, declared in 2017 that it seeks to become the first Fortune 500 company to earn B Corp certification. Danone has also certified ten of its subsidiaries as B Corporations. This includes Danone North America, which, at $6 billion in annual revenues, is the largest Certified B Corp in the world.
Unilever, a $62 billion publicly traded consumer goods multinational, has recently made a number of B Corp acquisitions. From 2016 to 2017, Unilever acquired five Certified B Corps: Mãe Terra, Pukka Herbs, Seventh Generation, Sir Kensington’s, and Sundial Brands. This was in addition to Ben & Jerry’s, acquired by Unilever in 2000, which became a Certified B Corp in 2012.
Natura, a Brazilian-based B Corp and leader in the cosmetics industry, made headlines when it acquired The Body Shop in 2017. This was the first billion-dollar acquisition by a B Corp—and it was a surprise to many people that a B Corp was the acquirer.
In 2017, Laureate Education, a higher education company with campuses around the world, was the first benefit corporation to have an initial public offering (IPO). Laureate Education was also the third Certified B Corporation to go public in the United States (behind former B Corps Rally Software and Etsy).
Laureate, which was backed by the private equity firm Kohlberg Kravis Roberts, raised $490 million in its IPO. The company had previously closed a $383 million private equity pre-IPO round in 2016, which included Apollo Management, Kohlberg Kravis Roberts, and the Abraaj Group.
Laureate Education going public is a big deal because many commentators were unsure about how the markets would react to a company that, as a benefit corporation, legally holds itself accountable to considering all stakeholders (students, workers, community, the environment, and others) when making decisions.
Globally, other publicly traded B Corps currently include Australian Ethical, Murray River Organics, Silver Chef, and Vivid Technologies (in Australia); Natura (Brazil); Yash Papers (India); and O-Bank (Taiwan).
PUBLICLY LISTED B CORPS. Tina Lo, vice chairwoman of O-Bank Group, a publicly traded B Corp bank in Taiwan, speaks to reporters at a B Corp event in Asia.
Benefit Corporation Governance
In a time of political gridlock, the B Corporation has generated bipartisan support across the globe.
In the United States, legislation to create benefit corporations—a new corporate governance structure based on the B Corp idea—has been passed in “red” states like Louisiana and South Carolina, “blue” states like California and New York, swing states like Colorado and Pennsylvania, and even in Delaware, the home of corporate law, where more than 63 percent of Fortune 500 companies are incorporated. There are thousands of benefit corporations to date across 37 U.S. states, the District of Columbia, and Puerto Rico.
Internationally, after being endorsed in 2014 by the G8 Social Impact Investment Task Force, benefit corporation laws have been passed in Italy and Colombia, with many other countries currently considering legislation. It is not hard to see why this idea receives bipartisan support. The benefit corporation legal structure and the B Corp certification are pro-business, pro-environment, pro-market, and pro-community.
When the first edition of The B Corp Handbook was published, in 2014, there were perhaps ten to twenty schools teaching about B Corporations. Now there are more than one thousand faculty members teaching about B Corps at more than five hundred colleges and universities—including the Federal University of Technology–Paraná, Harvard, the London School of Economics, MIT, North Carolina State University, Stanford, the University of Alberta, Yale, and other top academic institutions across the globe.
It is clear that professors, students, and administrators around the world have recognized that in order to change the way we do business, we need to change the way we teach business.
There are two formal networks of academics: the Global B Corp Academic Community and Academia B. The goal of these networks is to advance the state of academic study into business as a force for good.
We manage what we measure. This is one of the most basic truths in business. It follows that we ought to measure what matters most: the ability of a business to not only generate returns but also create value for its customers, employees, community, and the environment. To date, forty thousand companies have used the B Impact Assessment, a free tool that measures any company’s overall social and environmental performance.
Bancolombia, the largest bank in Columbia and the third largest in Latin America, is a great example of a company that has used the B Impact Assessment to measure its impact beyond its own operations. For example, Bancolombia started using the B Impact Assessment to measure the social and environmental impacts of 150 of its key suppliers. The bank used the impact data to generate performance reports and highlight areas for improvement for suppliers who completed the assessment.
Bancolombia envisions this as the first phase of a multiyear effort that they hope will eventually create deeper alignment and engagement with their more than thirteen thousand suppliers and one million customers throughout South America.
Another impact management tool that is becoming increasingly used is B Analytics. B Analytics is a flexible data platform that automatically aggregates and analyzes B Impact Assessment data. B Analytics is important because it allows investors, fund managers, nonprofits, and large corporations to accelerate change in the markets and to encourage change in their business communities.
For instance, organizations like Ashoka, the Business Alliance for Local Living Economies, Conscious Capitalism, the Family Business Network, Social Capital Markets, and the Young Professionals Organization are helping companies in their network to measure and manage their positive impact.
“Best For” and “+ B” Campaigns
On a local level, B Lab has partnered with place-based leaders and local governments to create a series of “Best For” and “+ B” initiatives around the world. In 2015, the Best for NYC campaign encouraged all businesses in New York City to measure, compare, and improve their impact.
The program was made possible by a coalition of partners, including community organizations, business and trade associations, universities, government agencies, banks, and large employers committed to supporting the local economy.
Since then, other campaigns have included Best for Calais (France); Best for Geneva (Switzerland); Best for PDX (Portland, Oregon); Best for PHL (Philadelphia); MZA + B (Mendoza, Argentina); RIO + B (Río de Janeiro, Brazil); and STGO + B (Santiago, Chile). More cities will be launching similar campaigns in the near future.
Inclusive Economy Challenge
B Lab launched the Inclusive Economy Challenge in 2016. The challenge is a call to action, encouraging the B Corp community to increase its collective positive impact by moving toward a more diverse and equitable economy.
Each year, companies participating in the Inclusive Economy Challenge choose three or more goals from the Inclusive Economy Metric Set, a subset of B Impact Assessment questions that focuses on themes like supporting vulnerable workers, climate change mitigation, supplier screening, and corporate governance.
In the first year, 175 companies participated in the challenge, collectively achieving 298 measurable inclusion goals. B Lab launched this challenge because they, like many B Corps, believe that our community’s vision of a shared and durable prosperity is not possible without an inclusive economy.
In addition, B Lab realizes that the Inclusive Economy Challenge is only a start. There is a lot more for B Lab and the B Corp community to learn about DEI. Whether you are interested in becoming a Certified B Corporation or not, B Lab has created a set of relevant, practical, and helpful best practice guides that any company can use to build a more inclusive business. Visit bcorporation.net to download these guides and/or to learn more about the Inclusive Economy Challenge.
Want to learn more? Get your copy of “The B Corp Handbook” today and/or sign up for our online launch event on May 30, 2019. To help us spread the word, please check out our promotional guide for The B Corp Handbook. Sign up for the LIFT Economy newsletter to stay up to date about the book and the B Corp movement.