SVT Group is one of about 180 B Corporations across the country. If you aren’t familiar with the B Corporation movement, it is an exciting development you’ll want to learn about. Read on for an overview of how B Corporations are paving the way to allow companies to embrace and enhance social and environmental (as opposed to strictly shareholder financial) value. Susan Hollingshead of B Lab graciously contributed the following.
Founding B Corporations and their community partners recognize that non-profit social innovation and government intervention are necessary but insufficient to address society’s challenges. Private sector leadership is required to address our challenges with the speed and at the scale required. Private sector Social Innovation requires investment capital to scale, but current corporate law and capital markets were not built to embrace sustainability. Corporate law requires short term shareholder value maximization at the expense of social and environmental interests. Furthermore, investors do not have the transparent and comparable measurement tools to assess the social and environmental impact of their investments.
B Corporations are a new kind of company which uses the power of business to solve social and environmental problems. B Corporations address two critical problems which hinder the creation of social and environmental impact through business:
1. the existence of shareholder primacy which makes it difficult for corporations to take employee, community, and environmental interests into consideration when making decisions; and
2. the absence of transparent standards which makes it difficult for all of us to tell the difference between a “good company”and just good marketing.
In a little over a year, there are already over 180 Certified B Corporations from over 30 industries, representing over $1 billion in collective revenues and $6 billion in capital under management and the community of B Corporations continues to experience rapid growth. Certified B Corporations meet higher standards of social and environmental performance and accountability. It’s like a LEED certification, but for a business, not just a building (or Fair Trade certification, but for a business, not just a bag of coffee). The performance standards are comprehensive and transparent.They measure a company’s impact on its employees, suppliers, community, and the environmental.
Unlike traditional corporations, Certified B Corporations are legally required to consider the impact of their decisions on the long term interests of their employees, suppliers, community, consumers, and environment. Long term this will lead to a legally recognized new corporate form (like a C corp or an S corp) and tax incentives, procurement preferences, and a social stock exchange for sustainable businesses.
B Corporations’ legal structure expands corporate accountability and enables them to scale and achieve liquidity while maintaining mission. B Corporations’ transparent and comprehensive performance standards enable consumers to support businesses that align with their values, investors to drive capital to higher impact investments, and governments and multinational corporations to implement sustainable procurement policies.
The vision of B Corporations is simple yet ambitious:to create a new sector of the economy which uses the power of business to solve social and environmental problems.
This entry was originally published on the Skoll Foundation’s SocialEdge.org website on our other blog – EcoFrenzy.