There was a time when the only mention of a man’s family, during his long days of full-time work, was a single photograph propped at the edge of the desk. There was a time when women power-dressed and outperformed their way into traditionally male workplaces without so much as a whisper about the state of their mental health, or the fact they had a baby, an aging parent, or multiples of both, to care for at home. There was a time when economic growth was a goal pursued without any concern for the damage it might cause to the planet, and when suppliers were selected purely on the basis of price and without regard to their practices.
All these things are changing now.
Business is experiencing a dawning recognition that the way capitalism has worked in the past may no longer be fit for the future, and that the idea of companies maximizing growth strictly for the benefit of shareholders is creating problems only a giant jolt to the system can solve. In just one example of this shift, in 2019 the Business Roundtable, an influential group of US corporate leaders, reworded its statement on the purpose of companies: They should no longer focus only on shareholder return, the group says, but also on communities, customers, employees, and the environment.
Leaders who are committing their companies to radically new ways of measuring success are, in a sense, merely catching up to a new generation of workers demanding from their employers unprecedented amounts of flexibility, recognition of their whole selves, and a commitment to safeguard the future. These are young people radicalized during childhoods overshadowed by looming climate disaster, and invested with the powers of technology, information, and communication. To hire them, businesses increasingly need to compete not only on money, but on rarer commodities: demonstrable ethics and defensible purpose.
One manifestation of these shifts is the rise of B Corporations, businesses which pledge to take a more ethical approach than has been common practice, and which are held to their word by examiners. The certification process involves legal changes to their charters, and usually much under-the-radar soul-searching. The B Corp community is small: so far, fewer than 3,300 companies globally have been certified. How large their ranks can grow depends on factors ranging from corporate will, to legal structure, to public perception. But the idea at its core is big: that we need a complete change to the way capitalism works in order to save the world.
In the coming decades, B Corps as a movement will fall somewhere on a spectrum that runs from niche, pie-in-the-sky project at one end, to radical systemic change at the other. This guide aims to find out where the concept will land.
Table of contents
What is a B Corp? | Scale vs influence | So how does a company actually gain the certification? | How did B Corp start? | Who is driving the change? | The problems with B Corps | Too many anomalies | A shift in progress | What’s it like working at a B Corp? | A tipping point in the history of capitalism?
What is a B Corp?
In 2006, three university friends who had worked in a variety of sectors wanted to remake the way business was done. They created B Lab, a nonprofit certifying body that would administer a process for companies to assess themselves based on criteria arranged in five themes: governance, workers, community, environment, and customers.
For a company to become a certified B Corp, it must score a minimum of 80 points out of a possible 200 across those five areas. Auditors from B Lab will verify the company’s claims, and accredit it if the 80-point threshold is met. Companies pay an annual certification fee based on their size, and have to re-certify every three years.
The certification also requires a legal change, replacing a company’s traditional sole duty to shareholders with wording that makes it accountable to multiple stakeholders. This overturns an idea that has, over the past 50 years, become intrinsic to the way corporate America—and much of the world—conceptualizes business.
In 1970, economist Milton Friedman argued in a New York Times essay that the best way for a company to serve society was by making as much money as possible for its shareholders. By doing so, Friedman argued, a company would be fulfilling its purpose as efficiently as possible. It was then up to other actors—including government—to manage society’s diverse needs. If business leaders wanted to help they could pursue philanthropy on their own time. Over time his influential argument became soldered into the circuit board of American business. Simultaneously, the wiring of American law came to reflect it.
US corporate law didn’t prohibit companies from considering stakeholder rights. But its wording made entrepreneurs and business leaders err on the side of what was, in most states, explicitly sanctioned: maximizing value for shareholders. B Lab’s founders and others, including early state-specific legal innovators, worked to get a new status enshrined in law: the benefit corporation, which allows a company legally to recognize its responsibility to a diverse set of actors. Maryland became the first US state to enact a benefit corporation law in 2010. Now, 37 US states allow benefit corporations.
B Lab counts between 9,000 and 10,000 benefit corporations worldwide. Being a benefit corporation signals intent to manage a business differently, but it doesn’t come with the same oversight, scoring, or auditing attached to the B Corp process. However, in some US states, including Delaware, where most major companies are incorporated, companies cannot meet the legal requirement for B Corp certification without first creating a benefit corp structure.
Scale vs influence
The first B Corps certified in 2007, with most of the early adopters based in the US. Well-known B Corps include Patagonia, the outdoor-wear brand founded by American climbers and surfers back in the 1970s, and Ben & Jerry’s, the Vermont-based ice-cream company that became part of Unilever in 2000 and certified in 2012.
South America became the first enthusiastic B Corp hub outside the US. Natura, a Brazilian cosmetics giant, is one of both the region’s and the world’s biggest B Corps. The first European B Corporations were certified in 2015.
By 2019, around 140 companies worldwide were getting certified every quarter. Of all the B Corps that have certified since 2007, 76% remain certified, implying that about a quarter fail to keep up their certification, or decide not to.
The raw numbers aren’t crucial to Andrew Kassoy, one of B Lab’s founders. “We don’t think about success in terms of how many B Corps there are, because even if we grow from 3,000 to 30,000, to even 300,000 B Corps, that’s still a relatively small percentage of all the businesses that exist in the world. So we’re much more focused on who is getting certified as a B Corp,” he says. “We think much more in terms of influencers.”
Certainly one of the most influential companies that B Lab has worked with is Danone, the French multinational behind Danone and Dannon yogurt, Evian water, and other supermarket staples. In 2013, the company bought Happy Family, a US-based B Corp that makes organic baby food. The acquisition positively “infected” Danone from the inside, Kassoy says. When Danone’s entire North American division became a registered B Corp in 2015, it took over as the biggest B Corp in the world. Soon after, Danone CEO Emmanuel Faber committed to transforming the entire 100,000-employee company into a B Corp, subsidiary by subsidiary, by 2030. It’s the biggest company ever to try such a thing, and it’s about a third of the way there.
Now, Kassoy says, “there’s a huge trend of large companies approaching us to get certified.” (New additions in the second half of 2019 included The Body Shop and The Guardian Media Group, which publishes the Guardian newspaper.) In response, B Lab has begun to develop the help it offers big companies in their “on-ramping” process of gaining certification.
Becoming a B Corp is a signal both of how a business wants to act, and how it wishes to be seen. The publicity surrounding B Corps might come across as some sort of purpose-washing, and certainly there are those keen to point out its shortcomings. But trumpeting its values is an important part of the movement’s strategy.
Christopher Marquis, a professor of management at Cornell University and author of a forthcoming book about B Corps, quoted B Lab’s aspiration when he wrote in a 2015 Harvard Business School case study that the organization was centered on “the mission of redefining success in business, so that all companies would compete ‘not only to be best in the world, but best for the world.’” The idea is to create a virtuous circle, in which companies improve, publicize their achievements, get recognition, and in turn inspire others to do better.
So how does a company actually gain the certification?
B Lab’s B Impact Assessment is a long and detailed questionnaire, with each question worth a certain number of points. Some policies might be relatively easy to change in order to gain more points, like the amount a company scores for giving workers time off to volunteer (it could simply alter its policies to offer them more.) Other changes might be more costly, like the amount of paid parental leave a firm offers.
Many of the early B Corps started out with the kinds of values B Lab espouses already kneaded into their dough. The process of certifying is less of a heavy lift for companies that are small, or which already focus on multiple stakeholders, or both. But as the B Corp community has grown to include more complex, older businesses, so have the complications of getting certified. While small companies might need to devote significant person-hours to the certification process, it will still likely be simpler to sift information from a less-complex business, or one that exists primarily in one market, than a business with many different departments, revenue streams, or locations.
Depending on the business, certification might be extremely difficult or even impossible. For example, under the environment section, the assessment asks whether a company has studied the greenhouse gas emissions of its “entire operation and supply chain, identified the most intensive sources, and set strategies for improvement.” It’s hard to imagine many companies in the extractive industries scoring well on this section.
When difficult issues arise, Kassoy says, B Lab and its Standards Advisory Council—a unit deliberately separate from the mission-building arm of which he is part—attempt to gather information in order to make an informed judgement. For example, when it comes to the prison industry, B Lab found that thorny questions kept on coming up. Some prison-related companies, including American Prison Data Systems, which manages digital services for US inmates, are certified as a B Corps. But in June last year, B Lab placed a moratorium on any further prison-related certifications until it can consult with stakeholders to “determine whether companies may be eligible for the certification and, if so, what management practices must be in place,” B Lab says.
How did B Corp start?
Kassoy met his partners, Jay Coen Gilbert and Bart Houlahan, at Stanford. After school, Coen Gilbert co-founded AND 1, a basketball shoes and clothing brand, with Houlahan later serving as CFO, COO, and president. Kassoy went to work in private equity.
The three men made a radical change when they left those worlds to create B Lab. But it was a decision arrived at over time, shaped by events including the dotcom crash and the Sept. 11 terror attacks.
“Some people are great at epiphanies and changing their life overnight. I had…a rolling epiphany, and actually it took me two to three years from the time when I lifted my head up from working hard in the world of private equity to recognizing that there was something broken about the system in which I was working,” Kassoy says.
Thinking up a possible solution also didn’t happen fast. “Jay and Bart had been running a company that I’d actually invested in, and that they sold. And so they were seeing the same problem as entrepreneurs and operators as I was seeing as an investor,” Kassoy says. “The magic, or the epiphany if you will, was the three of us sitting down over a couple of years and lots of beers in pubs, talking through, with a series of lenses, the same problem.” Their business ideas eventually gave way to a realization: “What was needed was to make sure that the capital markets could support those businesses,” Kassoy says “[W]hat was needed was the systems infrastructure.”
Certifying companies was one arm of the work. The founders also ran into the need to change the law in each of the 50 US states, and especially Delaware—often referred to as the home of the American company, because so many are incorporated there. In his 2015 case study, Cornell’s Marquis writes that B Lab went state by state, persuading legislators from both sides of the political aisle that benefit corporation legislation made sense, and wouldn’t cost them. “Really what we’re doing is deregulating the purpose of companies. That’s something everyone can get behind,” Erik Trojian, a legislative staffer B Corp hired in 2010, says in the case study.
At the same time, B Lab made its B Impact Assessment freely available to any company, whether it was thinking of certifying or simply curious about how it compared on each measurement. By 2020, 70,000 companies were using the assessment as a tool to measure and manage their impact, according to B Lab.
Investors are also taking notice of the movement and, in some cases, using the assessment criteria to help with decision-making. Bain Capital uses the B Impact Assessment to score the companies in which it invests, Politico reports—though the same article quotes Kassoy lamenting that “authentic and accountable efforts by investors to use their capital to have a positive impact is still far too few.”
So who is driving the change?
For the most part, the impetus to move business toward purpose is coming from two cohorts: visionary leaders, and insistent employees. In a world where religion and other communities have given way to work as our main source of meaning, both groups are paying more attention to the ethical ramifications of their organizations. And they’re finding it harder and harder to live with the dichotomy between the kind of person they are at home—someone who recycles, gives money to charity, helps at the local school fair—and who they are at work: someone who asset-strips companies, markets drugs to vulnerable people, or aggressively mines scarce resources in fragile states.
Though millennials didn’t invent corporate purpose, it is in no small part due to their influence that the idea has moved from the fringes and into the mainstream.
“People under 35 aren’t religiously dedicated to capitalism in the way boomers were,” says sociologist Gerald F. Davis, associate dean for “business + impact” at the University of Michigan’s Ross School of Business. As a result, change is often being pushed for by the young. An employee hackathon led mattress company Casper to pursue B Corp certification, Davis notes, while Amazon’s staff pressured the climate-laggard company to announce strong sustainability goals and at least a partial plan for how to achieve them.
Lorna Davis (no relation), who worked on Danone North America’s B Corp transition and now advises big companies on their potential certifications, says she’s observed that the people doing the hard work on certifications are often young, and connecting across large corporations via social media or workplace apps. (She also says that they skew female.)
One group notably absent from the push toward companies becoming B Corps was, for a long time, consumers. Laura Tenison, founder and CEO of Jojo Maman Bébé, a popular UK clothing brand for kids and pregnant women, says that she’s run her company as a purpose-driven enterprise from its inception in 1992, and as a B Corp since 2016. But in her experience, customers don’t care. Their loyal following is mostly made up of people who post pictures of their children wearing cute outfits, and show little interest in the company’s ethical practices or its charity work.
Despite all the talk of a desire for more ethical consumption, people are buying as many clothes, taking as many flights, and generating as much consumer waste as ever.
Christopher Marquis says this might be changing. Though he’s been studying B Corps for a number of years, Marquis says, he didn’t know Athleta—part of the Gap umbrella—had certified until he saw a sign about it on the door of a store. (It became a B Corp in March 2018.) Danone is putting the B Corp logo on its brands, and B Lab has recently kicked off a public awareness campaign.
“Consumers I think really want something like this,” Marquis says. “I look at other things like Fair Trade, and LEED certification for [greener] buildings, which I think people know and understand, and it makes a difference to some consumers.”
A challenge for B Corps, he notes, is that what goes into the certification is complex, and not easily distilled into a simple tagline.
Another problem with trusting B Corps is that a lot of people have a hard time trusting anything companies say.
The problems with B Corps
Patti Rundall, for one, laughs at the idea that massive corporations are setting themselves up at the partners through which social ills are now going to be healed. As a seasoned campaigner against corporate wrongdoing, she’s heard the promise, in various forms, for 40 years. And she’s certainly not convinced that the B Corp movement is anything more—to put it colloquially, and not in her words—than the latest attempt to put lipstick on a pig.
Rundall is policy director at Baby Milk Action, a UK nonprofit that works within the International Baby Food Action Network (IBFAN), a global network of citizens’ groups in more than 100 countries. Starting in 1977, IBFAN led a boycott against Nestlé and other big suppliers of breastmilk substitutes. Breastfeeding is protective of the health of both mother and child, and, in poor countries, formula was often made in too-weak concentrations, or with non-sterile water. As a result, mothers and babies were getting ill and dying.
In 1981, the World Health Organization published the International Code of Marketing of Breastmilk Substitutes in response, writes Unicef, to “the marketing activities of the infant feeding industry which were promoting formula feeding over breastfeeding, which in turn was leading to dramatic increases in maternal and infant morbidity and mortality.” The code is voluntary; parts of it are incorporated into law variously in different places. Companies are also adept at finding ways around it, Rundall explains.
Baby Milk Action has a specific campaign targeting Danone; in a 2016 report, the group cites TV ads in which Danone’s Aptamil “follow-on” formula is seen, by implication, to give babies mathematical skills or great balance and strength. It notes that the “follow-on” products aimed at babies of six months and over, which aren’t covered by the marketing code, look almost identical to the infant formula, which is. Rundall contends that follow-on milks are entirely unnecessary—human babies begin to eat solid food, alongside whatever milk they’re given, at six months old—and were in fact invented simply as a way to promote formula by association, and to sell more product to a susceptible market. (To be clear, Baby Milk Action and IBFAN are not against the use of formula when breast milk isn’t an option.)
Shouldn’t Danone, with its extensive rhetoric about a whole new way of doing business, seriously examine its strategy in such a contentious area?
Having written extensively on Danone’s B Corp goals and having spoken with CEO Emmanuel Faber about his purpose-driven agenda, I requested an interview with Véronique Penchienati Bosetta, head of “specialized nutrition,” as the formula division is called. The company responded with written answers, attributable to a spokesperson . “At Danone we believe breast milk is the best source of nutrition for babies. However, there need to be options for women who can’t breastfeed, or who choose not to breastfeed, and are searching for safe, healthy options for their children,” they wrote.
They pointed out that Danone does not market formula for babies under six months of age anywhere in the world, even if permitted to by local laws, in line with the WHO code, and that it scores top of an index compiled by the Access to Nutrition Foundation, which monitors global adherence to the code by the world’s biggest market players. In 2018 Danone was top of the index, though it only scored 46% (pdf, p.16.) Danone also says of the milks it markets for older children: “We believe that young child formula products have an important role to play in meeting these specific nutritional needs [of children older than six months] and addressing micronutrient deficiencies that are widely prevalent in the diet of young children.”
Dan Osusky, director of standards at B Lab, said in an email that it couldn’t comment on the activities of companies that aren’t yet certified (Danone is in the process, with a third of its subsidiaries so far certified) but that B Lab is determining score requirements for B Corps related to the Access to Nutrition index.
Osusky says that B Lab’s standards are based on “research, stakeholder engagement, and independent governance,” and are constantly improving. “That said, it’s not possible to have a standard that meets the expectations of all people’s ethical viewpoints,” he says.
This example shows just one of the ways B Corps, while apparently ticking requisite boxes, might still fall short of a campaigner’s most exacting standards. (Early Life Nutrition products accounted for $5 billion in sales for Danone in 2016, up 3.5% year-on-year, with the biggest growth in Brazil, China, and Australia. Rundall asks, if it’s serious, why doesn’t the company talk about selling less rather than more?)
B Corp’s Standards team conducted an investigation and concluded that it will base judgments on the Access to Nutrition Foundation index, and on metrics including companies’ improvement and transparency.
Meanwhile, Ben & Jerry’s, one of the most recognizable B Corps, is being sued in its home state of Vermont by an environmentalist who claims much of the milk used to make its ice cream does not come from “happy cows,” as the packaging states, but from cows on ordinary industrial farms. In 2020, the company agreed to remove the “happy cows” claim from packaging. B Lab says that Ben & Jerry’s was meeting its highest standard of transparency by making its full Impact Assessment available for anyone to read, but says it couldn’t comment on ongoing litigation.
In 2015 Etsy, the online marketplace for handmade goods, went public with a B Corp certification. But it didn’t last. Shareholders unhappy with the company’s spending, particularly on wellbeing initiatives, pushed for a different course. Ultimately Etsy failed to make the necessary legal change within its time window, and ceased to be a B Corp. Laureate, meanwhile, a US for-profit education provider, is a B Corp operating in a very controversial space.
Kassoy says the role of activists is vital in that it “plant[s] a flag in an absolute, pure way,” and that whenever the standards team has to make a decision, it seeks out activist views as part of its work ascertaining where there is good, better, and best practice, and where—as it concluded with prisons—it’s impossible to tell.
Too many anomalies
Many of those embroiled in capitalism’s contortions, or gobsmacked by its flaws, are asking a more existential question: Why is the system we built, and in which we continue to collude, failing so spectacularly to deal with the things many people feel matter most, like happy societies, fairness, and a safe world for our children?
Subramanian Rangan, professor of strategy and management at Paris business school INSEAD, has a succinct answer: “Our mass consumption ideas were fantastic as a start-up, but they’re disastrous as a scale-up,” he says. Endless extraction from the earth to create luxurious lifestyles worked when only a billion people were playing the game—especially since only a very few achieved super-consumer status anyway. But with seven billion on the planet, continuing to put faith in the same system makes no sense. Rangan describes it as a “fallacy of composition”—the idea that what worked for one member of a group (in this case, elites in a less populated world) should therefore work for the whole (everyone on a crowded planet.)
Rangan, founder of the Society for Progress, which brings academics and CEOs together with philosophers, says we’re finally becoming ready to acknowledge that there are too many anomalies in the self-regulating system, and demanding that the system’s main actors—namely, companies—be the ones to change. Throughout the capitalist era, he suggests, we’ve been focused on performance, but it’s been at the expense of humanity. At the same time, our expectations have increased. “People don’t want beds, they want sleep. People don’t want cars, they want mobility,” Rangan says. “It’s an expansion, an elaboration. The definition of success is broadening.”
The solution, to Rangan’s mind, is education. Company leaders, historically taught to focus on financial performance, now need education in values like caring, commitment, and sacrifice. “We taught competence, but can we teach character? My feeling is yes,” Rangan says. To that end, INSEAD is running a course for business leaders called Integrating Performance and Progress, the core of which is moral philosophy, and plans to follow its alumni for the next five years, collecting data on the changes they make and the work they do. Rangan taught the first iteration of the course alongside a philosopher, and both were joined by Indra Nooyi, former CEO of PepsiCo.
Grim though the sentiment may be, Rangan says that the calamitous effects of unbridled growth—already being experienced in parts of the world—could actually be useful to the cause of a more conscious capitalism. “We may need that kind of a crisis to mobilize the other 50% who are waiting for this strong signal,” he says. “If we can evolve the business system, we’ll have helped more than a little.”
Within this necessary change, Rangan says, B Corps will play a role, but a small one. The problem with the movement is that it’s “preaching to the converted,” a self-selecting group of companies that already buy broadly into the ethos, while the exploitative money makers—he mentioned a well-known oil major and a notorious investment bank—are the ones which really need to change.
A shift in progress
Yancey Strickler knows about B Corps. He ran one for years: Kickstarter, the crowd-funding platform which he co-founded in 2009 and which became a B Corp in 2014. While at the company he began developing something of a specialty, as a tech founder who talked about purpose rather than returns and rapid scaling. Since leaving his CEO role in 2017, he’s gone further, writing a manifesto for a different kind of world. His book, titled This Could Be Our Future, was published in 2019.
For companies in the not-so-distant future, he says, “The idea of having a non-financial purpose, that’s going to be normal. That’s no longer going to be the weird thing. The weird thing will be not having that.”
Both Strickler and Rangan share the belief that the kind of change they expect or hope to see won’t happen overnight. Both talk about a generational shift, with serious change being evident about 30 years from now.
Strickler is convinced that a shift away from profit, and toward purpose, is already truly taking place. Like almost everyone else I interviewed for this story, he cited the Business Roundtable’s move, in August 2019, to scrub out the language of shareholder primacy in favor of companies taking into account the needs of multiple stakeholders. Though the wording has been criticized as imprecise, the statement has still clearly been influential and, Strickler says, reflective of a broad change in the corporate atmosphere. The Wall Street Journal, digging into the Roundtable’s announcement, cited a survey by Korn Ferry in which 193 European CEOs were interviewed, 62% of whom predicted future CEOs would, by 2025, have shifted from a single focus on profit to a “triple bottom line” that included profit, people, and the planet.
“At a certain point we might look back and say this is the shift into post-capitalism, where financial profits are critical—they’re the lifeblood, they’re the oxygen that allow a company to operate—but they’re not what distinguishes companies from each other,” Strickler says. “What makes an interesting company is brand, product, meaning—the other values it supports.”
B Corps, but perhaps even more so public benefit corporations, will be integral to the shift, Strickler suggests. And that transformation could happen faster than a generation, as the imperatives to remain competitive, avoid increasingly stringent regulation, and hire talented people, begin to bite. Even in the next five to ten years, Strickler suggests, “I think we’re going to wake up and PBC [public benefit corporations] and B Corp will be the norm.”
But there’s one big problem darkening the potentially rosy picture of corporate purpose fueling a better, fairer world: climate change.
“If I imagine the evolution of ideas and people and history without this giant, roaring wall of climate change coming towards us, yes, I’m extremely optimistic,” Strickler says. But “I can’t be optimistic about climate change.” Like Rangan, he imagines that the human race will have to pay a hefty price while moving into the next phase of its evolution. “The end result that might come of climate change is that we come to see this 80 years of post-war period as this strange blip of human existence when life was pretty self-assured, life was pretty predictable,” he says.
What’s it like working at a B Corp?
Working at a B Corp would, one might hope, provide a sense of purpose for employees alongside a better work culture. That’s certainly sometimes the case: Hilary Dessouky, Patagonia’s general council, says having a significant proportion of the company work on the B Corp impact assessment made for deeper enfranchisement. But then, Patagonia, which certified in 2011, has always been different: Dessouky describes watching children play outside the office in Ventura, California, from which she was speaking. Patagonia has offered onsite childcare for 35 years, and as a result—in comparison to the vast majority of American companies—has a stellar retention rate of staff who are also mothers.
But ideal employee relations aren’t not always guaranteed—or don’t remain the case as a company grows. In 2018, a disagreement blew up between Kickstarter’s workers and its management. It centered on a satirical, anti-Nazi book seeking funding through the platform. But it developed into a bigger question, about the way the company should address employee-manager relations, with a contingent of Kickstarter staff in 2019 seeking to unionize. CEO Aziz Hasan issued a letter saying unionization wasn’t the right way to protect workers’ rights at Kickstarter, and the company argued that because it was a B Corp, it already had workers’ rights as a central tenet of its structure.
The B Impact Assessment asks whether workers are represented by a union, but doesn’t score companies on that basis. In April 2018, in response to a complaint made against a certified B Corp, B Lab’s Standards Advisory Council made a statement about unions in which it noted that certified B Corps must abide by the law and not impede efforts by workers to unionize. It requires companies who use any legal tactics to dissuade unionization to make this clear on their public profile.
Speculation has been rife about whether the unionization effort emerged from an existing cultural problem at Kickstarter. Two employees who were union organizers ultimately lost their jobs and subsequently complained to National Labor Relations Board, while the company says they were dismissed for performance-related reasons.
Former CEO Strickler, who had left the company before this all took place, says he’s not surprised that a company which attracted people driven by change was itself changed by them: “Everybody is looking for: How do I contribute to getting us out of where we are? How do I contribute to a world where things seem more equitable?” In that respect, B Corp status is working for Kickstarter’s employees, by bringing together a cohort of people passionate about defending their own rights, and by extension those of tech workers across America.
But if this is the contentious end of the B Corp spectrum, there is also a warm and collegial end.
Roshan is Afghanistan’s biggest telecoms company, its biggest employer, and its only B Corp. In 2017, a fuel tanker loaded with explosives and bound for the US embassy exploded prematurely outside the company’s headquarters, killing 90 people, including 32 Roshan employees. That the company recovered is testament mainly to the spirit of its own employees. But Karim Khoja, Roshan’s CEO, says that an unexpected level of support, including fundraising for the families of those killed, from the global B Corp community was massively helpful. “The support and the outpouring of love, affection, prayers—if there was anything that carried us through, it was that,” Khoja recently told Quartz.
A tipping point in the history of capitalism?
In 1957 Boris Pasternak, already a well-known Russian poet, published Doctor Zhivago, knowing that the sweeping, strange, and passionate novel would probably be his undoing. He was right. Pasternak was awarded the Nobel Prize for Literature the next year. But the book, which dealt with the traumas of Russian history from the turn of the 20th century onwards, including the first World War, a bloody revolution, and ultimately the setup for the reign of Stalin, drew a vicious denunciation by the still-Communist state. Pasternak was forced to renounce the Nobel; he died soon after.
I first read Doctor Zhivago as a teenager, and I remembered it as a love story. Re-reading it, by chance, while working on this field guide, what struck me is the wild hope and terror of a man trying to understand what’s happening as society collapses and remakes itself around him. Yuri, the doctor at the novel’s heart, is watching as the world as he knows it writhes and tries to find a new shape. He’s witnessing a tipping point in the history of global capitalism.
Starting out on this guide, I aimed to answer the question of whether B Corps were themselves at a tipping point, about to burst into the business mainstream and alter it in some fundamental way. The conversations I’ve had have suggested not so much that B Corps are about to go through a sea change, but that capitalism itself is.
Doctor Zhivago is a great reminder that the world as we know it—much of our experience dominated by large, powerful, growth-focused companies, often operating as part of capital markets—isn’t the only way to organize things. Though its legacy affects the country to its core, communism in Russia was played out by 1989. Is it possible that modern capitalism, which developed in the west in parallel, may now be in its own end game?
There are many who believe the system we have is too fundamentally flawed to be re-engineered into a better version of itself; that what we need, instead, is a radical and total change to something utterly different. No doubt, on the other side, there are others who are still happy to argue that there’s nothing wrong with Milton Friedman’s thesis. B Lab and the corporations they certify are offering a third way. Essentially, to save capitalism by reinventing it.
Yuri Zhivago escapes a starving Moscow and travels with his family, by train, through a seemingly endless Russian winter. At one point the line is blocked by deep snow. It’s cleared, the line stretching out shining into the distance, and as they travel onwards, a glorious Spring arrives. But when the family reaches its provincial destination they find more problems: bureaucracy, suspicion, the town on fire.
The B Corp movement is not, in itself, a shining railway ready to transport us into a fairer future. It’s more like an indication that smart people with skin in the game truly want change. It’s more like a first sign of Spring.