We have a specific investment philosophy at Impact Engine, but we also appreciate that there are many different ways that companies can create positive impact. For companies interested in signalling that values are important, one of the fastest growing paths is to become certified as a B Corporation. Some companies will go a step farther and legally incorporate as a public benefit corporation (you can read more about the differences between B Corps and Benefit Corps here.) In Illinois alone there are 21 registered B Corps pledging to make an impact. To better understand this movement from the inside, we connected with Nancy Goldstein, founder of Compass X Strategy, a certified B Corp in Chicago, to share her perspective.
Paths for Businesses with Purpose: The B Corp Movement
By: Nancy Goldstein
Companies are increasingly touting impact and social good as a way to connect with their consumers, customers, and clients. We often see them saying “Our employees are our greatest asset!” or “We give back to our community.” These companies have seen the data that shows that 68% of people buy products and services of brands they trust, and 59% recommend them to friends and colleagues (Source: Edelman 2016 Trust Barometer). Purpose sells. So they say the words. And, they probably mean it. However, the problem isn’t “do they mean it,” but rather, “what does it mean when they say it?” When a company says they make environmentally friendly products, what does that mean? When every company has their own definition of eco-friendly, or their own definition of “supports the community”, it gets difficult to separate the truly great companies from those that are just great at marketing.
That’s where B Corps come in. In a sense, B Corp is to business what Fair Trade certification is to coffee or LEED certification is to buildings. B Corps are for-profit companies certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency. B Corps become certified by taking the B Impact Assessment that covers: Governance, Workers, Community, and Environment. The assessment is tailored to a company’s size, sector, and geography. To become certified, a company must achieve a score of at least 80 out of 200.
Here are a few of my favorite questions from the assessment:
- Does the company have a formal process to share financial information (except salary info) with its full time employees?
- What multiple is the highest compensated individual paid (inclusive of bonus) as compared to the lowest paid full-time worker?
- Based on the results of your employee satisfaction assessment, what percent of your employees are “satisfied” or “engaged?”
- What % of management is from underrepresented populations (this includes women, minority/previously-excluded populations, people with disabilities, and/or individuals living in low-income communities)?
- What % of energy (relative to company revenues) was saved in the last year for your corporate facilities?
Today, there are more than 1,400 Certified B Corps from 42 countries and over 120 industries.
What’s great about the Impact Assessment is that you can use it even if you don’t intend to become a B Corp. Want to talk about your company’s positive impact? Know what your impact is first. Measure it. Once you take the assessment, you can see how you company performs vs. other businesses and develop a plan to improve your impact.
Locally, there is a growing community of incredible companies that have chosen to measure what matters and become Certified B Corps. Here in Chicago, we have B Corps as diverse as financial services, food distribution, and construction. Check out a few of the B Corps that you may not yet know:
Galileo Learning runs innovation camps for kids. Based in Palo Alto, camps are now open in Chicago. We couldn’t be more thrilled.
Jeni’s Ice Cream, while based in Ohio, Jeni’s growing presence in Chicago means more delicious treats for all.
KeHE is an employee owned food distribution company. It’s not just the organic foods you eat, but how it gets from the manufacturers to the stores that matters too.
Meliora K is a natural cleaning products company. And of course, Method has a presence here as well!
Pekin Singer Strauss is an investment advisory and asset management firm. You can invest money for your future while being consistent with your values!
Prosper Strategies is a Chicago-based digital marketing and PR firm that partners with changemaking companies who want to measurably grow their profits and their impact in meaningful, measurable ways.
Exciting, right? Want to learn more or get involved? Here are a few ways to take action.
- Sign up to attend learning and social events at IllinoisBCorps.org
- Contact a local B Corp to learn their story, how the assessment helps them measure what matters, and helpful tips for you
- Take the B Impact Assessment to gain an understanding of how your company performs
B the Change.