On March 13, 2014, the Business Development Bank of Canada (BDC), a Canadian business development bank that caters to small and medium-sized enterprises (SMEs), became the first financial institution in Canada to receive B Corporation certification. It also happens to be the 100th Canadian company to join the international B Corp community, and one of the largest businesses to get certified (1). As of January 2014, there are almost 1,000 B Corp-certified companies in 32 countries.
What are B Corporations?
They are companies that subscribe and adhere to the values and principles that underpin a new economy, and get certified as “B Corps” by the nonprofit B Lab, which oversees the certification process. A business, large or small, needs to meet rigorous standards of social and environmental performance, accountability, and transparency in order to get certified. As B Lab explains, “B Corp is to sustainable business what LEED certification is to green building or Fair Trade certification is to coffee” (2). The “B” stands for “benefit”, where maximizing profit for shareholders is not the sole purpose of the business.
In addition to certifying progressive businesses, B Lab supports the passing of benefit corporation legislation in the United States, since “without this legal authorization, a CEO could in theory be sued by stockholders if profit-making is not his sole objective” (3). There is no legislative recognition of B Corporations in Canada, but the B Corp movement is growing in Canada (4), and is home to the second-largest number of B Corps after the United States (5).
A number of Canadian B Corps are listed in B Lab’s “Best For” categories. Toronto-based Bullfrog Power is listed as “Best for the Environment”, as is BC-based Salt Spring Coffee. PeaceWorks Technology Solutions, of Waterloo, Ontario, won two awards: “Best for the Workers” and “Best for the Community.”
THE INTRICACIES OF BECOMING A B CORP
Seeking B Corp certification is no small measure. A business must first undergo an impact assessment by completing a survey of its business practices. This survey is broken down into four categories:
- Governance: Standards related to mission, the Board of Directors, and transparency.
- Community: Standards related to employee practices, supply chain, and community service.
- Environment: Standards related to your overall environmental practices.
- Beneficial Business Models: Standards related to how your business model serves the community and conserves the environment.
Upon passing this initial scorecard (a minimum of 80 points out of 200 is necessary), a business must also include its social and environmental commitments directly into its articles of incorporation.
B CORP BENEFITS
There are indeed numerous benefits to being B Corp certified. They attract good employees who seek out progressive businesses with social and environmental purposes. Undergoing the certification process can also help a company redefine and clarify its mission and purpose as an organization. The B Corp certification helps validate that a business is indeed as “green” as it claims to be—it is a brand that stands for good business. B Corp-certified businesses are also attractive to discerning investors, who wish to put their money in companies that care for people and the planet.