How to Build a Values-Driven Business

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Building a Values-Driven Business: Consider Becoming a B Corp.

As a social enterprise, you will discover that you are often held to a higher standard by customers, and even by potential investors. "The stakes are much higher now for businesses that are attempting to do good by doing well," says Nelson, so be prepared for your every move and decision to be scrutinized, with your missteps potentially becoming public crises. However, many successful companies – think The Body Shop, Odwalla, Ben & Jerry's – have walked this path before and come out on top. As a result, they have paved the way for a new business classification called the B Corporation, which serves as a distinction for a company's sustainability standards, in addition to its traditional founding legal structure of S Corp, C Corp, or LLC.

The idea for creating a set of sustainability metrics and performance standards by which social enterprises can be recognized and held accountable came out of B Labs, a non-profit formed in 2006 by three friends passionate about the do-good business model. There are currently about 280 companies representing over 60 industries that have been certified as B Corps since mid-2007, according to B Labs co-founder Jay Coen Gilbert. While B Corp is not yet legally recognized as a standalone business classification, companies that have received the distinction are part of a significant group of social enterprises (including Seventh Generation, Method, and White Dog Café) that have chosen to operate according to a higher set of standards.

Any company can become a B Corp through a simple process set forth on the B Labs Website. Businesses must first take a survey that assesses the company's score in relation to their sustainability performance. If they receive a score of at least 80 (out of a possible 200), businesses may then go on to amend their founding documents to provide for stakeholder interests. "Once you have been approved in the assessment, we provide you with the exact wording to incorporate into your governing documents," says Coen Gilbert. "One of the major purposes of the B Corp model is to make it easier for entrepreneurs to change the DNA of their business so they are legally protected when it comes to their mission, but are also required to consider the impact of their decisions on other interested parties," says Coen Gilbert. He describes the B Corp classification as an overlay to the existing corporate structure at a company, which further helps bake their values into the way the business functions. B Labs is currently working towards getting legislation passed in several states that would formally recognize the B Corporation as a distinct legal entity. So far, legislation has already been introduced in Vermont, with Maryland, New York, and Pennsylvania poised to follow.  

While there are unique challenges facing social entrepreneurs in the quest to lead successful values-driven businesses, Hollender believes it will get increasingly easy for companies to take on social responsibility. In part, this is due to organizations like B Labs and the American Sustainable Business Council that are helping to mobilize social enterprises to influence policy change. "The good news is that this couldn't be a better time to start a values-oriented business," says Hollender. "There is a greater demand and consumer receptivity to these types of businesses than ever before."   

Dig Deeper: The Thinking Behind B Corporations

Building a Values-Driven Business: Additional Resources

Visit these organizations' Websites to find a wealth of information on socially responsible businesses.

Social Venture Network's Tools & Best Practices
SVN.org

B Labs – B Corporation
Bcorporation.net/

American Sustainable Business Council
Ssbcouncil.org/

Business for Social Responsibility
Bsr.org/

BALLE – Business Alliance for Local Living Economies
Livingeconomies.org/

Social Enterprise Alliance
SE-Alliance.org/

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