In the wake of our increased climate emergency and with the societal shift of social justice at the forefront of the conversation, consumers are prioritizing the wider impact of the companies they support. But, taking a stand as a woke company is more than posting a black-square in an instagram post. It’s about the length to which a company is willing to go to make actionable change and impact in an inherently flawed system. One way to do this is by assessing where a company’s values lie and how best to take the steps to increase their accountability and commitment to the environment and the people they impact.
Certifications are a great place to start. Not only do they bolster the credibility and ethics of companies to consumers, but it also sets the foundations of what a modern and sustainable brand can look like. B Corp, a non-profit certifying agency, is a buzzword in the business world that has been making waves in the sustainable business game for some time now, but what does it actually mean?
In 2005, when Jay Coen Gilbert and Bart Houlahan sold their company - And1, which they started as Stanford undergrads - they watched as the new owners quickly ditched their sustainable model for one based solely on profit. In response, they launched B Lab (B as in “beneficial”) as a way for companies to grow in a more ethical way that balances business gains with their impact on the environment, the workers, supply chain, and the broader community as a whole.
B Corp positions itself as a “businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose...The B Corp community works toward reduced inequality, lower levels of poverty, a healthier environment, stronger communities, and the creation of more high quality jobs with dignity and purpose. By harnessing the power of business, B Corps use profits and growth as a means to a greater end: positive impact for their employees, communities, and the environment. Business as a force of good”
What happens when a company wants to go B Corp? The certification process is lengthy and it isn’t cheap (the annual certification fee starts at $1000USD and scales up based on revenue). The process is a third-party standard that scores a participating company from 80-200 based on their full operations from governance, environment, workers, and community.
Upon application, companies must sign the B Corp Declaration of Interdependence:
- That we must be the change we seek in the world.
- That all business ought to be conducted as if people and place mattered.
- That, through their products, practices, and profits, businesses should aspire to do no harm and benefit all.
- To do so requires that we act with the understanding that we are each dependent upon another and thus responsible for each other and future generations.
The process is primarily done over the phone and companies are required to re-certify every three years. Although they boost “stakeholders over shareholders”, their requirements are not legally binding or enforceable and if the certifying company fails to uphold them, they will get little more than a slap on the wrist.
In the end, the goal is for companies to position themselves to their customers and investors with the understanding that a growing business doesn’t have to have a staunch dichotomy between their profit and their impact and that if you lead a capitalist horse to water, you can absolutely make it drink.
Unlike fairtrade which is a shorter process with a primary focus on farmer’s rights and equity –which let’s be honest, has done little to alter the balance in global trade and protect farmers over the decades it has been in practice (read a little bit about the shortcomings of Fairtrade on our post about Starbucks here) B Corp Certification is a rigorous process and the only one that measures a company’s entire social and environmental performance across all scopes of governance.
The B Corp certification is, at its core, about how a company can succeed by being simultaneously ethical and profitable. A company that is a great example of this is Kotn.
The Canadian-based sustainable clothing line highlights perfectly how a brand does not have to sacrifice a curated and modern aesthetic (no granola vibes in sight) to have a positive impact on people and the planet. We reached out to Kotn, a sustainable clothing line that is B Corp Certified to hear what being B Corp means to them.
“As a Certified B Corporation®, every purchase directly supports the lives of our cotton farmers and their children, with your help, we’ve funded 10 schools, partnered with 2,079 farms, and impacted nearly 100,000 lives in rural Egypt.”
Kotn was recently voted Best for the World by B Corp for having a B Impact Assessment score in the top 10% of their global community and top 5% of B Corp businesses worldwide. The B Corp assessment score is a free tool that companies can use in conjunction with the B Corp certification to measure their social and environmental impact –and here at Arbor, we are obviously big fans of any tool that gives an impact score!
But for most companies, is the process even worth it? Most companies that sign up to be B corp certified are already operating under an ethical framework and the added verification doesn’t really change much for them and if a company wants to back out, they can do so at any time. There is also the criticism that with the right can-do attitude, any company can become B Corp certified –like the American Prison Data Systems. If a company that is directly tied to the downright racist American carceral system can pass the test for the B Corp certification, how much validity can be attributed to a framework that claims to bolster the impact of transparency and accountability?
There is also the question of multinational corporations acquiring a B Corp certification. Take Unilever for example, and its crusade to acquire more and more subsidiaries with B Corp certifications. The London-based mega company with over 400 brands under its umbrella including Q-tips, Axe deodorant, Lipton, and Ben & Jerry’s racked up over 51 billion euros in 2020 alone.
“When we look at any of our acquisitions, one of the main considerations is always whether it is a good fit for Unilever. We look for companies that have similar vision and values to ours. That is critical to the success of the partnership. B Corp companies come with many of the attributes that fit with our long-term goals and our culture, and therefore it is no surprise that some of our recent acquisitions, such as Seventh Generation, Pukka Herbs and Teas, and Sir Kensington, have been B Corps” - Paul Polman, Unilever CEO
(Don’t worry Paul, I don’t think anyone is surprised by this pattern.)
On a whole Unilever scored relatively decent on the Arbor index:
4/5 for Human Rights
3/5 Emissions, Environmental innovations, and Environmental Care
3/5 Corporate Ethics
This isn’t without their fair share of controversy though. In 2011, following a three-year investigation by the European Commission, Unilever (in cahoots with Procter & Gamble) was fined 104 million euros in a price fixing scheme of laundry detergent across eight European countries. According to a report from BreakFreeFromPlastic, an organization of roughly 1500 companies on a mission to tackle plastic pollution, Unilver was named one of the top ten plastic polluters alongside Coca Cola, Nestle and their old friend, Procter & Gamble. The report, Missing the Mark, found that solutions and initiatives put forth by these companies were un-actionable with “a lack of ambition and prioritization of alternative product delivery methods at a systemic level that would allow for a dramatic reduction in the use of single-use plastic” and “an over-abundance of investment in and prioritization of false solutions which allow companies to continue the business-as-usual reliance on single-use plastic packaging.”
Unilever hasn’t been doing enough to avoid conflict palm oil in products thus contributing to vast deforestation, increased carbonization of the atmosphere, and the exploitation of labourers and indigenous people. According to the WWF and the Rainforest Action Network (RAN), that although companies, including Unilever who rely heavily on palm oil have increased the transparency of their supply chain, they are still not fully divulging all of the sources nor do they have the proper systems in place to cut out non-compliant suppliers. Exploitative operators are slipping through the cracks, and the people and planet are paying the ultimate price.
B Corp certifications are doing far more good than harm and gives consumers another valuable asset to make conscious purchasing decisions. Their “B” stamped on any company’s site gives them respectable clout and props up a smaller company's sustainable street cred with a solid framework for growing their business in a positive way. But, by including subsidiaries of multinationals in the B Corp community, it runs the risk of degrading the validity of the certification by diluting the role the parent companies play in environmental and social justice.