Giving Back Profits: Behold the emerging B Corporations

Anyone who has personally or professionally suffered because of the current recession knows that in times like these, government programs and nonprofit companies aren’t sufficient in solving America’s economic and social problems. Consider instead, that it is our current revenue makers, our country’s businesses, which provide the most powerful resource for future support of our nation’s most needy causes and institutions.

What is Holistic Business?

According to the business education and consulting firm, BeWell360°, there is a current movement to inspire and encourage companies all over the world to embody the tenants of Holistic Business. Holistically minded companies know that through giving, they receive. They know that by influencing the market beyond the scope of their individual businesses, they profit. Through this integration, a company grows organically because it is supportive of every facet it touches – self, team, and community.

Holistic Business practices of course exist: there are of countless companies who take ecological measures or provide charitable support, but why aren’t there more? The answer lies in the core business concept of Cost-Benefit Analysis: if a legal system isn’t in place to provide greater support and incentives, corporations aren’t motivated to increase social consciousness.

Enter the Benefit Corporation Movement:

According to the official mission statement of Benefit Corporations on “Our vision is… to create a new sector of the economy, which uses the power of business to solve social and environmental problems. This sector will be comprised of a new type of corporation - the B Corporation - that meets rigorous and independent standards of social and environmental performance, accountability, and transparency. As a result, individuals will have greater economic opportunity, society will move closer to achieving a positive environmental footprint, more people will be employed in great places to work, and we will have built stronger communities at home and across the world.”

What distinguishes the Benefit Corporation from a non-profit is that B-Corps are full-fledged for-profit businesses. In fact, the concept behind B-Corps is that financial profits are wonderful, but there are other activities of a company (such as environmental and social involvement) that can be just as key to increasing the company’s overall value.

State legislatures and big businesses alike have joined the B-Corp bandwagon. In January 2012, California became the latest state following Vermont, Maryland, New York, New Jersey, Virginia, and Hawaii to pass legislation that legally supports the B-Corp definition. To date, over 450 businesses have become certified, including well-respected brands such as Patagonia, Method and Seventh Generation.

So how do B-Corps work?

B lab, the non-profit chapter responsible for vetting and certifying all B-Corporations is working to build a community of businesses that will redefine corporate success through several initiatives:

Indemnity: Previous to the B-Corp legislation, corporate law focused on shareholder profits, forcing companies who wanted to give back to seek nonprofit status or risk shareholder lawsuits for pursuing social activism. B-Corp certification protects businesses from shareholder lawsuits for engaging in such activities.

Transparency: BeWell360° explains that without a strong system, businesses fail; and businesses are run by people. In the model of Holistic Business, individuals are celebrated for their contributions. In this vein, B-Corps commit to transparency with all stakeholders, including employees. By creating team-driven businesses, profitability and pridefulness can increase in tandem.

Consumers: It wasn’t long ago when customers started requesting goods that were “Fair Trade Certified”. Similarly, the B-Corp designation demonstrates to consumers that the product or service they are purchasing is from a ‘good company’ as opposed to a company with ‘good marketing’. In addition, through their nationwide brand campaign, the B-Corp movement is reaching over 17 million consumers and educating them on brand consciousness.

Community: One of the greatest benefits of B-Corp inclusion is the network of other powerful, proactive companies to partner with and learn from. By forging strategic alliances with non-competing B-Corp businesses, a company can increase it’s scope of influence organically.

Certification is the first step towards Change

Visit www.bcorporation.net to contact the B-Lab about certifying your business, to learn about Benefit Corporation benefits and policies or to peruse a list of current B-Corps.

Holistic means attending to the whole. Similarly Holistic Business refers to the practice of creating a company that prioritizes and involves its employees, its consumers, and its community. The success of B-Corps is demonstrating that if you support these entities, they will support you back in spades. It’s simple karma really. And it’s working.