Metro January 3, 2017

The B Corp Boom

When business and altruism come together

Historically, corporations don’t map out a mission that specifically benefits the community. Certainly, pharmaceutical companies provide a public good for those in need of drugs and tire manufacturers keep cars safely rolling down the road, but companies themselves are not compelled to rein in carbon emissions or make sure employees enjoy a living wage. In fact, public companies are beholden to their shareholders and can even be sued if they veer into do-gooder territory that detracts from the annual profit motive. But, externalities of business ventures have become a new opportunity. Customer demand for goods and services from companies that equate doing good for people and the planet with doing well in business is growing.

After Idaho unanimously passed the Benefit Corporation Act in 2015, it became one of the 30 states and the District of Columbia with legislation that empowers so-called benefit corporations, companies with an eye on any number of external factors they care about: curbing air pollution, engaging with underserved suppliers or producing only organic products. Now, protected by statute, Idaho companies can even be held to account to ensure that they are fulfilling the greater missions of their work beyond the profit motive. In some cases, the rules enable nonprofits to create their own for-profit entities to find creative new ways to forward social and environmental missions.

“There is a small but mighty group of B Corps in Boise,” said Jay Cohen Gilbert, co-founder of B Lab, the nonprofit entity that provides certification for companies looking to up their externality game. “They were successful in working with a bipartisan group of state legislators to pass Idaho benefit corporation legislation, and we hope they are as successful growing the local community of people using business as a force for good.”

To date, Idaho has 105 entities that have checked the box at the top of the state’s new Articles of Incorporation application form to register as a benefit corporation. Nine Idaho companies are listed on the nonprofit B Lab website as certified B Corps, a voluntary process geared to helping companies improve their B ratings. B Lab has some 40 analysts who score companies and help them find ways to improve.

“In addition to working with individual companies seeking B Corp Certification or individual funds seeking Global Impact Investing Rating (GIIR), B Lab is increasingly working with institutions to help them understand the impact of the businesses with whom they work,” Gilbert said. “Business networks, trade associations, fund managers, credit providers, government agencies have all become Measure What Matters Partners and use the B Impact Assessment and B Analytics to understand, communicate and increase the positive impact of the businesses with whom they work.”

Since the new Idaho legislation passed, word is trickling out about the benefits of pursuing the strategy of incorporating with a social or environmental mission. Still, the secretary has had a number of applicants who, not entirely sure what the designation is all about, have checked the box and later asked for a revision since the benefit motive is not yet in their business bailiwick.

Patagonia famously began donating profits to environmental groups in the 1980s, a commitment that became “one percent for the planet” with well over 1000 companies donating one percent of sales (since profits are fungible) to environmental groups. B Corp takes the trend to a new level with its comprehensive certification process and rating system akin to Morningstar investment rankings and Capital IQ financial analytics. Of the nine companies on the voluntary B Corp roster in Idaho, eight of them call the Treasure Valley home.

The Boise marketing firm Oliver Russell was the second certified B Corp in Idaho after The CAPROCK Group investment company. Oliver Russell was one of the first to register with the state as a benefit corporation. Other Boise B Corps include Jitasa, which provides finance and accounting services for nonprofits nationwide, and Vyykn, with its computer-controlled drinking water purification system. Another is Prosperity Organic Foods, “committed to creating great tasting organic products through innovative use of fats and oils.” Melt is its flagship product, a creamy, butter-like spread.

“We work to use our business to work toward positive environmental change in the world,” said Russ Stoddard, president and founder of Oliver Russell. “We operate our business with principles that include transparency in our corporate governance, from a commitment to supporting underserved communities to creating a workplace that is engaging and values the human capital that we have here. As far as our external business goes, we build brands for purpose-driven companies that have either a product or a service or a business model that benefits society.”

Stoddard’s company, founded in 1991, really mirrors the B Corp philosophy and as a marketing and branding firm is an important partner in the effort to expand the message that business agendas with social responsibility and environmental stewardship at the core will pay off in the long run. As the trend grows, companies around the world are building a network of people striving to make their organizations and communities better places to work, entities that are all-around better for the planet, Stoddard said. “We can talk to each other and bounce ideas off one another as we work to find clients and build better benefit companies.”

Creative, collaborative work that benefits employees and the community has been a part of Oliver Russell for 25 years, but B Corp brings new power to the effort, Stoddard said.

“When we first found out about it, I was like, wow, man, what a framework it offers to companies like ours that are trying to be socially responsible but don’t necessarily have all the definitions or don’t understand what all the levers and measures might be that would define that,” he said. B Corp certification helps to market companies— matching the values of consumers with producers.

“Measurement is the first step in management,” Gilbert said. “There are now more than 40,000 companies using the B Impact Assessment as their impact management tool. Thousands of these companies are using this tool to benchmark their performance, set goals, and make improvements that help them create more positive impact for their workers, community and the environment. That means more people earn a living wage; less carbon is emitted into the atmosphere; more healthy food nourishes our children.”

B Lab aspires to be an organization that serves a global movement of people using business as a force for good. Stoddard said the network has already helped his company land new clients. B Corp’s vision is that all companies will compete not only to be the best in the world, but the “best for the world” and bring more “shared and durable” prosperity.

“We’d love to support (Boise’s) local leadership to launch a Best For Boise campaign that would inspire and celebrate all businesses that are working to create higher quality jobs and to improve the quality of life in Boise,” Gilbert said.

This article appears in the Winter 2016 Issue of Territory Magazine.