Dear Quartz members—
In 2006, three friends from college started work on an idea: What if companies could be certified for taking an ethical approach to business? A year later, the first B Corps were accredited and a new movement to reform capitalism was born. This week’s field guide, by Quartz reporter Cassie Werber, explores what that movement, which has been gaining momentum, has achieved so far.
Becoming a B Corp requires a legal change, as Cassie explains in her state of play. US companies must incorporate as “benefit corporations,” enshrining a commitment to public benefit, not just to shareholders. They must also pass an “Impact Assessment,” a data-rich review of their approach to everything from carbon emissions to family-leave policies.
One of the best-known B Corps is outdoor clothing maker Patagonia. But Patagonia, which has been purpose-driven from its start, was initially skeptical of B Corp certification. The company was already committed to sustainability and was being certified on various other measures. It came around because of the B Corp focus on law and corporate governance. Now, it’s one of the biggest drivers of the movement.
In another piece, Cassie shares four B Corps’ reflections on what the certification has done for them, including helping to attract employees. In fact, Cassie reports, certification is more helpful for hiring than for winning customers.
Two private equity companies have become B Corps to date, despite the industry’s reputation for a ruthless focus on the bottom line. These funds see it as a way to demonstrate that they walk the talk on corporate purpose in an era where lots of banks and asset managers trumpet their commitment to social responsibility.
TO DISCUSS WITH FRIENDS OVER DINNER…
- About 3,200 companies have been certified as B Corps globally.
- Notable B Corps include Ben & Jerry’s, The Body Shop, and Natura, Brazil’s biggest cosmetics firm.
- Yogurt behemoth Danone hasn’t finished certifying yet, but just one division, which has done so, is already the biggest B Corp in the world.
- B Corp requirements range from giving employees time off to volunteer to tracking the carbon footprint of a company’s suppliers.
Let us know what you think of this week’s guide by emailing members@qz.com. And don’t forget you can check out all the previous field guides we’ve done, available exclusively to our members, here.
As always, best wishes for a productive week.
Walter Frick
Membership editor, Quartz