Can getting a B in Business be an A+ Move? B Corps with Ben Anderson

We’ve spoken to a lot of entrepreneurs from around the world in the past few months and there is one thing they all have in common - a corporation. The precise structures of corporations will vary from company to company and country to country but a relatively new corporate certification is working its way around the planet and creating a global standard for how businesses should behave. It’s the B Corp Certification and it’s gaining ground. 

Ben Anderson, a B Corp Leader, and former CEO and Co-Chair of Board of B Lab US & Canada joins the show today to explain how it works and why getting a B makes for good business.

A sneak preview:

• How corporate values have shifted over the years
• What is the B Corp
• The Shareholder v Stakeholder economy
• What are the qualifiers to become B Corp
• How to become B Corp
• What it costs
• How B Corp is helping companies prove ESG
• How it turns out B Corp is good for business performance
• B Corp’s influence on international corporate governance
• Why consumers may want to look for B Corp

Ben Anderson
B Corporation

Transcript

When getting a B is an A+ grade: B Corps

INTRO:

HOST VO: Welcome to Happy Planet where we speak with entrepreneurs, investors, and thought leaders driving the impact economy. I am your host Abigail Carroll. 

If you like what we’re doing, please share your thoughts by leaving a rating or review wherever you listen to us. and if you have suggestions or ideas for me, please do not hesitate to reach out through our website, Happy Planet Podcast.com

We’ve spoken to a lot of entrepreneurs from around the world in the past few months and there is one thing they all have in common - a corporation. The precise structures of corporations will vary from company to company and country to country but a relatively new corporate certification is helping us better understand which companies are truly impact oriented.

To better understand this phenomenon we’re speaking today with - Ben Anderson who was until very recently the CEO of B Lab, the organization responsible for the B Corp certification. Ben offered us the opportunity for  a deep dive into the world of benefit corporations. This can help entrepreneurs, investors and consumers learn why they should care about companies getting a B.

Abigail (01:08):

Okay. All right. I'm gonna, um, camera off me. Okay. Um, uh, welcome to the podcast, Ben.

Ben (01:16):

Great to be here.

Abigail (01:18):

Uh, I'm really excited to hear more about your work with B Corp. Today. You were the, um, CEO of B Corp, or B Labs in the United States and Canada, and you oversaw some 2000 BCorps in that region. I would love to know more about, you know, the history of how you got involved.

Ben (01:45):

Great. Well, I, um, used to be the Chief Operating Officer of a company called Preserve, uh, which makes, uh, consumer products, uh, using closed loop systems. So companies best known for turning yogurt cups into toothbrushes and other stylish home products like food storage containers and tableware. So if you've shopped in a Trader Joe's or a Whole Foods, or any of your local co-ops, uh, you've seen the bright colored, uh, preserve products there. And so Preserve, uh, certified in 2011. And that's, uh, something that I was a catalyst for. And we had been known in, uh, since 1996, uh, for being a pioneering, environmentally focused company, trying to change the recycling system and make sure that we reduce wastes. And so we had a decision sort of early in the movement. There were fewer than 500 B Corps then, and we decided to, uh, certify the company.

Abigail (05:36):

Right. Um, so you decided to jump ship at one point and actually join the B Corp movement?

Ben (05:47):

Yeah, so after about nine years at Preserve, um, I told our founder, who I'm very close with, and still continue to be close with that, uh, I couldn't spend a decade with him and, uh, started to look about how I could have broader systemic impact. And in a conversation with one of the founders, j Cohen Gilbert, uh, Blab founders, um, he recruited me, encouraged me to come to Blab where I could have impact across thousands of companies. And so it was a natural segue into that work. And, uh, the three founders were looking to kind of bring in other leadership at that stage of the organization. And so there were a couple of us that had been working in B Corp that, uh, were pulled into leadership roles.

Abigail (06:31):

Yeah. So, I mean, how, how does, how does B Corp work? I've, you know, we see these logos on shop windows and, you know, on websites, what does it mean to be a B Corp?

Ben (06:45):

Yeah. So people recognize the B with a circle around it and then a line underneath it. And I'm sure that most of your listeners can go into their pantry and find some tea or granola or something else that has a B, so you just need to look for it. And so, B stands for benefit or public benefit. So B Corp, um, all have a public benefit, and they meet the highest global performance standard. And so B Lab has an assessment that goes across five stakeholder categories, governance workers, community environment, and Custer customers. And so a company would go through about a hundred questions, uh, that BLab would then verify the performance of. And so if people meet this threshold in our, in our case, an 80 points in the system, um, and they make a, uh, distinct governance change to shift from a shareholder driven model to a stakeholder driven model, um, and then they can certify as a B Corp.

Abigail (07:50):

Right. Um, so can you gimme some examples of, you know, one of, you know, some of these criteria, like the community or, or workers, like

Ben (08:01):

Yeah, let's start, start with worker. And so we would look at, you know, the, the subcategories within that would be things like financial security, health and wellness, career development and engagement satisfaction. So within that, and one of the most highly weighted ones is living wage. So most people know minimum wage, and that is often set

Abigail (08:20):

The, and not the same thing,

Ben (08:21):

at the state level. Right. But a living wage is something that's substantially different, which is you are, uh, earning the income that allows you to meet your full needs. And so there's different living wages if your single or if you have a family. And so within the point system that BLab, allocates a living wage is highly weighted.

Abigail (08:43):

And do you figure out what a living wage is by geographic area, or,

Ben (08:48):

Yes. So it, it varies. MIT uh, has a calculator that we have leaned on hard, and so you can can look at it different, uh, geographies cuz the cost of living is different, certainly around the United States. And then, um, there are other tools that we can use, uh, around the world.

Abigail (09:06):

Yeah, really interesting. So, okay, so we have something, you know, we have to pay people a living wage. Uh, what about the environment? What are some of the standards there?

Ben (09:16):

there we would look at things like, you know, air and climate, uh, water land use, impact on life. Um, and then also just like your operational, uh, efficiency, uh, as it relates to if you're in a manufacturing environment, are you kind of a recycling the waste in that system? Uh, but we'll also look at things like carbon emissions and, uh, one of the things that B Corp community has done is galvanize the entire community and others through its leadership to be net zero by 2030. Um, and so, yeah, B Corps are very strong on the environment, and so you're gonna see, uh, exemplars across the board in this category.

Abigail (09:57):

So if I'm Shell and I wanna be at B Corp, can I go buy carbon credits to qualify?

Ben (10:06):

Yes, certainly. Uh, companies use carbon credits, but we wanna, uh, reduce impacts and create regenerative models. And so regenerative models is definitely like a hot topic within the community. And, um, one of the benefits of being a B Corp is not just that you're certifying your own performance, but that you are among a community of others who are tackling similar problems. And so that's one thing our B Corp Climate Collective has done, is sought to share, Hey, we're doing this, this way, it might apply in your different industry. Yeah. Um, and that's the bene benefit of being in community with others.

Abigail (10:41):

Right. So, I mean, I think too, you'd mentioned to me before that the B corp, you, you're not just responsible for yourselves. The verification doesn't just happen on your company, it goes all the way down your, your value chain. So you can't have a B Corp status if the people that you interface with or that you're buying products with from don't. Is that correct?

Ben (11:09):

I would say it like this, is we have a positive point system, and so you can get credit across all the positive things that you're doing, um, in your company, in your immediate operations, or if there are things that are happening in your supply chain. So you get awarded points for where you're performing and you, you have to meet, still have to meet this high bar. So you have to be doing something across all of our categories. [Yeah.] And so depending on the type of business, if you're in manufacturing business, um, the, the impacts within your supply chain are going to be incredibly important. So we lean on lots of other standards as part of what we do. So we will, uh, award points for certified organic or fair trade. Um, and so we will, um, use lots of others that are going much deeper into the supply chain. And then we look across, and in some cases we have to do our own verification and categories, like in the living wage example, we would look through payrolls and understand is this company, um, paying living wage? If there was another certifier that did that, we might rely on that, uh, that certifier to do that.

Abigail (12:17):

It's really interesting, even just culturally, you know, you just talked about, you know, you mentioned like people are like, these big companies are opening their books to this third party, you know, verification. That seems pretty exceptional, right? Isn't that a real cultural shift?

Ben (12:37):

It is. And in addition, we, we require transparency as part of this. And so you can go on to the directory and of the 6,000 B Corps globally, you can see how they're performing at a high level across these categories. And you could even compare. Um, but any, anybody that's in, uh, that is in the community of certified B Corp is already performing at a high level. Um, and if you are a public company or subsidiary of a public company, you're required to disclose your full assessment. Um, and so we require additional transparency for those companies. So you can go in and you'll see on our, um, website, how is this company doing?

Abigail (13:20):

So, okay, you, you know, I'm, I'm a corporation, I wanna come in and be certified. You do a certification process. How long does that take?

Ben (13:31):

The complexity definitely increases the larger the company. So if you're a five person marketing firm and the impacts that you have are like, pretty contained, um, it could be a fairly quick process for you internally. So that could take you a month. And as you start to get into a bigger company, maybe as a hundred employees, you would form a team and you have three or four people and you need your, somebody in hr, somebody in finance, somebody in operations, be able to answer these about a hundred questions. Yeah. If you're a large company, in the extreme example, let's take Danon, uh, the French dairy company. We know Danon Yogurt and they own lots of other brands that people would know, like Horizon Milk. Um, they have approached this on a subsidiary basis, so they certified the North American Danon, about five plus billion dollar company that might take a year to do. And then the entire company is in the process of certifying the $30 billion company. And that's a about a four or five year journey to [Wow] certify. So it's quite a, quite a range depending on the scale and complexity.

Abigail (14:36):

And do you get any benefit for being in the process? Is there a, you know, B Corp pending logo that you can put up if you're, if you're in the middle of this?

Ben (14:45):

It's a good question. We do have a pending, uh, B Corp logo for companies that are startups and who don't have a year of performance [Yep.] But are going to meet our governance requirement and take a proformer bia. So we do have something like that. Um, for, I think what you're referring to might, uh, what might fit there is we have a pro program called Movement Builders. So these are, we wanna, uh, have a relationship with multinationals. We will, we need the scale of multinationals in order to accomplish the systems change that we seek. Uh, but we recognize, like in the case of Danon or others, they're gonna take a very long time to get there. And so we have created a way for them to align with our movement, not not be able to use the B Corp logo logo, but affiliate with the community. Yep. And the requirement there is that they take action on things like advancing stakeholder governance, because they're often in the public markets, and that's a place where they're still pioneering work to do.

Abigail (15:44):

Right. Um, I, uh, it just seems like a completely different challenge trying to certify a Danon trying to certify a, a young startup. Um, [absolutely]. What, so what are the, like what are the costs associated with this?

Ben (16:00):

Yeah, it's a scaled, um, scaled pricing based on your size. So if you're, uh, a hundred million or above, it's gonna be $25,000. And that's tier and sort of tiered by revenue. Or if you're a small company, it's gonna be a couple thousand dollars. Um, so it, it, and we do have an equity pricing, um, as we seek to create a more diverse and inclusive, uh, community. Um, if you identify as a, um, BIPOC- owned or women-owned business, there's equity discounts that we have.

Abigail (16:34):

So you'll take equity in a startup or something like that in

Ben (16:37):

Exchange? Oh no, sorry. We're, uh, equity in the context of we're trying to drive equity in the pricing, and so we call equity pricing. We're not taking equity <laugh>. I'm

Abigail (16:46):

Like, it's creating,

Ben (16:48):

Creating, uh, accessibility and uh Got it. Got it. Uh, creating equity across the

Abigail (16:53):

System. <laugh>, thank, thank

Ben (16:54):

You. Good clarification.

Abigail (16:56):

I've been in the startup world way too long. <laugh>. Um, so, okay. And then you, is that an annual thing? Cuz you do have work ongoing, right? You, you don't just show up, get, uh, a verification and then go back to your old ways. You, you have a new bar that you have to maintain

Ben (17:14):

Companies pay an annual fee to remain a certified B Corp. And then we re-certify the companies every three years. And so this is a chance for us to see like how you have grown and, and because this is a management system and what a lot of CEOs think of this as the guardrails for running a good business. When you naturally, if you certify at 82 points, you say, oh, there's all these other aspirations we have around the business, so let's set in place this measurement system around, uh, carbon emissions, for instance. Yeah. And then a couple years later you'll be able to say, Hey, this is where we were, this is how we reduced our carbon emissions. Um, and so, uh, we see companies naturally improving performance, um, as they go through the system and they, they also like to check in. It is also important because often these are growth oriented companies and there are actually like a hundred assessments behind the front door.

Ben (18:11):

So if you're a one to, you know, one to 10, um, worker company, and then you shift into the next category, uh, up there will be different expectations for you around the things that you offer to your workers, for instance, um, health and benefits. And this is also, um, we need to take into account different geographies in some places where health benefits are just like required, um, by the country. Um, we need to look at that differently. So there's quite a bit of different complexity and context that we need to account for around the world.

Abigail (18:46):

Right. I, I thought, I think it's really interesting, you, you mentioned that these are sort of also just really best practices that ultimately help these companies to perform better. Do we see that companies with a B Corp certification actually are performing better on, you know, standard metrics of, um, you know, performance?

Ben (19:09):

Yeah. To meet the 80 bar, you're in the top 1% of, um, in terms of positive social environmental impact. Um, so we, we have set that standard and, and it's the highest performance standard around the world

Abigail (19:24):

With these, you know, with the, all of the sort of, um, sorry, I'm looking for my word with all. Um, what's that? Um, with all the criticism right now on the ESG standards and how there's a lot of green washing, it seems to me that we need more standards like this to, uh, actually just enable companies to be able to have a, a truly verified, um, uh, marker for them to be able to to, to make these ESG claims that they're all sort of seeking to make right now. Are you finding a lot of growth in response to the pushback about this ESG sort of greenwashing stuff?

Ben (20:15):

Yeah, so I'll give some context. During Covid like everybody, we were concerned like, where, where is the world gonna go and what's gonna be the impact? What we actually saw was significantly accelerated demand for companies wanting to certify. So that's the kind of the, the moment we're in is incredible accelerating demand for B Corp, and this is the way the world is going. Certainly the headlines catch, uh, a lot of attention around sort of this anti-woke, anti-ESG thing. But just stepping back as a business owner, understanding your business and having a management system for measuring the performance of it is good for business. It's good business to evaluate your company across all of your stakeholders. And many companies naturally do look at their stakeholders, but if you don't have a formalized system around it, you will not understand kind of the, the impact and also be able to set goals.

Ben (21:18):

And so what we've seen, and I know we'll have amazing data when we just get a little bit further away from, um, this Covid period is B Corps have been incredibly resilient. We've had the highest retention in our community during this period, and we've seen, uh, companies be sort of incredibly financially resilient. And the reason is, one, they know their businesses really well, and two, they were already doing things like paying a living wage, offering health benefits, all of the things that much larger companies started to get attention for saying, oh, we're gonna, we're gonna implement this flex, uh, policy so that people can go to the doctor. That's things that Bcorps do naturally. And that just leads to a much more resilient business and leads to long-term performance. So if you're very short-term focused, you know that's what you're gonna do. But if you're, you're, you're gonna take a much longer perspective, you're gonna do better over the long term.

Abigail (22:18):

Um, and I, I do think that we're seeing that the market is favoring these types of actions. Am I, am I wrong?

Ben (22:28):

Yeah, absolutely. Um, I think this is where the majority of Americans and people around the world want to go. And the headlines are driven by the extremes, the polar ends of the spectrum. And so that's what we, that's what takes up our space. Um, but people want good things to happen. Their communities, people wanna live in a healthy atmosphere. Um, it's just common sense. Uh, but the headlines kind of crowd that out.

Abigail (22:55):

So I think it's, I mean there's, it seems like this is really reflecting a, a sort of more fundamental shift in just even capitalism and how we see the role of business. You mentioned that you have to change your, your, your governance. Um, uh, sorry. What is the, what is the document you're changing? The, um, uh, your, well, you have to make, uh, you mentioned that you have to make changes in your governance, I'm assuming that's sort of a, a bylaws or something like that to, to, um, to turn the focus away from a pure shareholder value to the stakeholder value idea. Um, and that's, that's a fundamental shift.

Ben (23:41):

Let's, yeah, let's push into that cuz it's really distinctive and differentiated, uh, the way we approached this. Um, so in the course of creating, uh, the certification, the founders recognized through their own experience of exiting, uh, and selling a business, um, that they wanted ways to ensure that all of the positive things stayed long term. And so due to Milton Friedman and others mm-hmm. <affirmative>, um, there's kind of been this shift to a shareholder driven model, but if you look at the history of the company and the, for the creation of that corporate form, it was for often for public goods like railroads and roads. And so we've interesting gotten a bit away from that. And there is also, uh, you know, uh, legal sort of backing that companies use. And so what BLab did was create a new corporate form called the Benefit Corp. And so what this did was legally allow companies to shift from a shareholder driven model to a stakeholder driven model.

Ben (24:44):

So among the stakeholders is still shareholders, and they are a primary stakeholder, of course, in, [of course] in a company. But it's formalizing and allowing a board to elect expanded fiduciary duty. And this is good for the company and it's good for the long term, as I referred to before, but it's distinctly different. And so a company, if you're a C Corp, you would need to elect Benefit Corp. If you happen to be, for instance, an LLC, you can incorporate that stakeholder view right into the operating agreement. So how you accomplish the stakeholder view is different based on the corporate form, uh, that you start with. But it is common to all be B Corps that they have this stakeholder view. And what we've seen, we've passed legislation in 40 states to create the Benefit Corp. And now, you know, there's dozens of other company, uh, countries that are adopting this. So it's propagating around the world right now, and this is the where the world is going.

Abigail (25:41):

Well, I think it's really interesting also because it's, um, you know, if you're, if you're doing business internationally, you have all these different sort of corporate, you know, indicators, different ways, different countries organize their, their countries, uh, organize their companies. And this actually gives sort of a, it's almost a homogenizing of, of a standard, even though the standards are still still different. There's a sort certain core shared principles, uh, that are signified by this B Corp, um, status.

Ben (26:18):

Yes. So this is definitely a global movement. There are about 6,000 companies globally in 87 countries and, you're right, this does create a sort of a common language and a common standard. So you can know a company in Europe, it's a consumer product versus a company in, in the US and have a way of comparing them. And, uh, this is also probably a good point to note that the, there are over 200,000 companies globally that have used the standards. So they haven't cert necessarily certified, but they're using that guardrails for running a good business. And this is how you take a small community of companies and leverage their leadership for global impact. And so the rate at which companies are just logging in, looking at the assessment, thinking about how they can improve performance, um, they don't necessarily need to have the aspirations to be a B Corp, but they, if they want to be like a B Corp, um, that's how we're gonna drive, um, systems change. Um, so we're all sort of on the same page. And now the sort of where this is going is that companies are taking collective action on different things as referred to before, um, the movement, uh, uh, B Corp movement has moved towards this net zero by 2030. And so that's like a global collective action that we've taken on.

Abigail (27:39):

Right. Um, uh, it's and, and in line with a lot of the UN goals, right?

Ben (27:45):

Absolutely. And we, uh, mapped our standards to the SDGs, the sustainable development goals. Yes. Um, as well as did additional standards work around the SDGs. So there is actually a product that we've created, um, it can find on B corporation.net, um, and you can measure your impacts and use those standards across, uh, the SDGs.

Abigail (28:08):

Interesting. U

VO: After a short break we’ll continue our conversation and talk about the future of benefit corporations. 

BREAK: MTI & SPARK NO9

VO: Welcome back to Happy Planet. 

Abigail (28:08):

Interesting. Um, so just getting back to these 200,000 users who are, who are, you know, um, working to meet these standards, but they haven't applied, what do you think is keeping them from taking that next step?

Ben (28:24):

I don't think it's necessarily a bad sign that they're not all certified. Our aspiration isn't that every company would certify and it may not make sense for every company or companies may be, you know, strong in one area and they're using it, uh, to, uh, kind of work on their environmental side of their business. Um, yeah. But the natural thing is once you start measuring things and you see other categories, we see companies sort of naturally making improvement across the entire kind of spectrum of where people are at a starting point. But in logging in to this free tool that B impact assessment, you are kind of taking a step to, uh, look at the purpose of your company and, uh, measure impacts and hopefully improve your company for a public benefit.

Abigail (29:12):

So if I'm a new company today, um, I'm a startup, right? Mm-hmm. <affirmative>, let's say I'm a startup and I am, you know, in in climate doing climate work, what, why should I go through this now as opposed to waiting, uh, you know, a year or two or until after I'm funded or, you know, what's the benefit of, of a, of a startup that really doesn't have a lot of employees and, you know, and can a secondly to that, can a startup get, get, um, you know, uh, get accreditation if it's not paying its employees salaries, but it's just paying them in inequity for the short, you know, startup period. Mm-hmm. <affirmative>.

Ben (29:57):

Yeah, great question. And so I think it is a great choice for certain startups, but not for all startups. So if this is a situation where you're just still figuring out what you're doing with the business model and there's things that you need your whole attention to, I would encourage companies to figure that out. However, it doesn't hurt you to open up the B impact assessment and understand the direction that you wanna set for your company because there's things that you can put into practice without trying to certify. Yeah. There are other startups that may be venture backed or have certain type of investment where they know they're going to grow. And the benefit of certifying earlier in a high growth situation is you don't sort of grow in the wrong direction. And the second thing is that you get to affiliate with a community of leaders. So there's some, you know, ability to say, Hey, I'm part of this community. I'm the Patagonia of, uh, uh, organic farming in Maine, or something like that. And so you can, um, kind of credential yourselves with, with the broader community, and that will help perspectively with your, your marketing and storytelling.

Abigail (31:16):

Wow. That's, that's really nice. You can, you can kind of up your, your sort of social impact by align, uh, by creating alliances with other big brands. Mm-hmm. <affirmative>. Um, uh, so I had a question on the tip of my tongue, and now I'm just, uh, I lost it. I I should have written it down. Hold on. Um, it was about, uh, the startups, the timing. Oh. Um, so I'm put, I'm an operational company. I apply, uh, are, do you find companies are sometimes overestimating their own, um, organizational strengths and how, how well they're organized according to your standards?

Ben (32:06):

Yes. In almost all cases, a company will come in and, uh, the typical example is that they, they feel really good. They submit, they have a score of 95. And, uh, when we go through and really look at things and press in, we often, they'll get sort of a knock back to say 75, and then they'll be clear lanes for them to say, oh, this is what I need to do. I actually, I need to, uh, document, this is a practice, but it's not necessarily a policy or, uh, this is something that we do, but I haven't measured it so I can't take credit. So it's not that they're, um, trying to take points that they, uh, you know, in a deceitful way, it's just learning how to use and apply the standards. And so it's kind of like just going to the gym and level setting, like, well, where, where am I?

Ben (32:57):

Like, how strong am I in these different areas? And often we, we think we have more weights that we can push up than we actually can. And so it is very natural, um, for companies to do that. It's also very natural for companies to kind of get the credit for what they're already doing and then saying, Hey, we're better than this and we actually want to do these other things as we certify. And so we do actually see a lot of, um, formalizing things that happens on the way in. And, and this was my experience at Preserve. Uh, we had a belief around community service, uh, and giving comp, uh, employees the opportunity to volunteer on company time. We didn't have it as like a formalized policy and we weren't tracking it. Um, and so by doing that, people then used it, did it more. And so there's a really good positive social impact that comes out of this process.

Abigail (33:49):

Right. So the process really is, first, the first step is a self-evaluation. And then you see, okay, I'm, I've got a 95 in my, in my own opinion. And then when you apply, there's a, there's a verification that that's a pretty deep dive. And, um, uh, is there ever a scenario where a company just goes to you without doing the sort of self-analysis and says, you know, I need some coaching. Is that, is that a service you all give?

Ben (34:21):

Um, we haven't in the US, uh, because of our sort of proximity to the global standards body, which is also based in the US. Yeah. Um, and so we have not done consulting and it's not generally not good practice for the verifier to do. Right. The to do that. Um, with some of the global partners, there's more independence. Um, however, there is a whole, uh, array of consultants, uh, that are ready, willing, and able to help companies. Um, and I believe some of those are listed on, on the website or BLab, um, can help make the connection. But it's also like an easy Google search and you'll, you'll turn up, uh, several dozen of them. Um, and so there's a whole industry around helping companies cuz sometimes it's an expertise issue and sometimes it's a bandwidth issue or, or there's other things that are going on. It's helpful to have a helping hand who's been through it a number of times.

Abigail (35:14):

Yeah, I can, I can see that. So what's next for B Corp? Like where's this all going?

Ben (35:22):

Yeah, so I'd answer that on sort of, uh, in two different ways. One in the US Canada context, which was the global partner that I ran, um, there's a new strategy which is to scale transformational, uh, business practices and policies along the pillars of racial equity, uh, climate justice and stakeholder governance. So we've talked a bit about stakeholder governance, where BLab is most expert in the world and we do a lot of work there and are doing policy work there. In climate on climate justice we have lots of leaders on climate, uh, within the B Court community. And so integrating justice into that work is a growth and stretch area. And then on the racial equity front, racial equity has been in the standards from the beginning. Um, and we have always framed our work as, uh, working on an inclusive economy, uh, where there's shared and durable prosperity for all people.

Ben (36:23):

And so, uh, what we've found is we really needed to center racial equity in the strategy to ensure, for instance, that our community was accessible and relevant, uh, to traditionally marginalized entrepreneurs and create systems and approaches that make this a place that is relevant and, and they want to be. And, um, so that we as a community can be sort of fully diverse and representative of the US community. And so B Corp's are now increasingly taking action. Um, and so an example of something that, uh, the B Corp community has done is to not try to necessarily be the leader but join with other leaders. And so B Lab is part of the corporate Racial Equity Alliance. And so, uh, PolicyLink for instance, is a strong partner and the C R E A has, uh, created this thing called, uh, the CEO blueprint for racial equity. So BLab brings standards uh, experience and also a community of companies that could apply the CEO blueprint. So that's what we would bring to the table. So that's, I would answer kind of the first piece, which is the US Canadian context.

Abigail (37:31):

Mm-hmm. <affirmative>, I feel like it, it gives me a lot of optimism. I feel like these are, well, I also, I also feel like it's, you know, we're looking back a lot right now and it seems like a lot of, um, a lot of what was old is new again. You know, you mentioned that corporations really had a public benefit role, um, you know, a hundred years ago or, or more. And somehow we got off track and it sounds like, you know, people like, you know, B Corp and others are really trying to get, get us back on track with a more sustainable, uh, approach to capitalism.

Ben (38:22):

Correct.

Ben (38:25):

Yep. And so we are trying to use the system to change the system. And I, I agree. It's sort of getting back to basics. And a lot of this is just common sense. It's like a good if, if you run a business that's good for your workers, uh, they're gonna stay long term, they're gonna grow, uh, they're gonna help your business. Um, and so of course there's certain industries particularly, uh, where there's kind of a ra, you know, this like race to the bottom in terms of like wages and competitiveness to try to, you know, offer a cheaper and cheaper product. Um, but, uh, kind of over the long term, that's generally not the approach. And so yes, it's, it's getting back to kind of basics and, um, every company, I believe starts with actually a purpose to do something good in the world. Uh, but over time you make decisions that dilute that purpose and uh, you get off course.

Ben (39:21):

And some of that can be for market reasons and some of that often is, uh, because of the investment that you bring in that kind of warps the direction of your company. And so by aligning your business as a benefit corp and taking the stakeholder approach, it gives you more flexibility and, and the board in its fiduciary duty is allowed, uh, to kind of balance different interests, um, of the company. And so, yes, this is, um, increasingly I think where, you know, companies, uh, are, are going and affiliating, whether it's with B Corp or kind of other aligned, uh, movements, um, around the world.

Abigail (40:00):

So just getting back to these, these sort of the public companies that are B Corp, is there any data on how they're actually performing or not performing on the stock market compared to, you know, they're their competitors who are not B Corps?

Ben (40:20):

Yeah, I would say it's still pretty early days. And so when I came in to BLab eight years ago, uh, we were still proving out and getting, um, private investors comfortable with the certification as well as this, uh, governance approach. And so the evolution there was just first like getting private investors to like neutral. They're not against it. Yeah. Maybe they're not for it. But then what we've seen is hundreds and hundreds of, um, VCs, private equity companies investing in B Corps and they do in incredibly well, and it's more recently that we've been able to kind of crack into the public markets. Cuz again, it was like a different thing for a benefit corp. Uh, the legal structure that certifies a B Corp to then do an IPO. And so Right. We now have about 30 companies around the world, many that are kind of smaller, but we've had some more flashy IPOs like the company Allbirds, which has a mm-hmm. <affirmative> sustainable Yep. Um, shoe company or Lemonade, which is a innovative insurance company. Yep. Or course you may know Coursera as an an education focused company. So, uh, we'll see. Uh, but it's early days, but generally those companies are doing very well.

Abigail (41:41):

There certainly seems to be no lack of interest in mission based businesses right now. And in the investment, you know, arena, the private investment arena, I'm seeing a lot in the VC world. Um, so let's hope that this really takes root and continues this, this journey. I mean this, I mean at 200,000 companies who are, who are, you know, not even truly on the radar but are, but are using those standards, that's a really great signal of the, the yeah. The big transformation that's in route.

Ben (42:17):

And one thing I just wanted to get to the second piece in terms of like where things are going with the B Corp community, um, on the global front, um, we are underway with, um, an update and expansion of the standards as it applies to the businesses. And so as I mentioned previously, there's, you know, over a hundred different things that you might be getting points awarded for across the five kind of major categories of the assessment. And so you can get up the mountain to 80 to certify a lot of different ways. And what we've tried to take stock in over the last two or three years is, is there a minimum performance requirement in certain categories that just, if you're gonna be B Corp, like you have to do this certain thing. Um, and so for example, since we've talked about living wage and fair wages earlier, one of the proposed things is that workers can afford a decent standard of living for themselves and their families and there's a wage equality among the workforce.

Ben (43:21):

And so there's 10 things that Blab has determined are most integral and is seeking and engaged in the community around this actively right now. So we've just closed this, uh, comment period around this, but if I were to say, where's the world going? Uh, B Corps will, uh, in addition to being holistically high performing, will also be known to pay fair wage, to be in net zero by 2030, and sort of other things that are just the part of the fabric of being a certified B Corp. And so people can go on the website and look at them if they want to really sort of pour in and understand like, where's the world going on this?

Abigail (44:00):

So you end up also in a virtuous cycle because, you know, if if someone looks at a B Corp and knows that they're gonna get a fair wage, they're gonna wanna apply there and you're gonna get a lot of employee retention and you know, that's gonna bring benefits to the company. And it just seems like it's a, it's a very positive cycle you get on.

Ben (44:20):

Yeah. There is a whole array of benefits to certifying many that are internal facing, like locking and mission, but recruiting and retaining talent is the top thing that CEOs state. Like, why are we certifying, uh, because pe people who want to work here are asking, uh, if we're certified. And then I've heard on the other side, like, when we've certified, they're getting the best talent cuz this is where the next workforce, um, wants to work.

Abigail (44:50):

Yeah. Wow. Um, so you ha you are no longer with B Corp, but, well you, you're no longer the ceo, but you are still proselytizing for B Corp and you're involved with B Corp. Um, uh, what else is in store for Ben?

Ben (45:09):

Yes, so yeah, I'm a B Corp alum and BLab alum and, and actually just came back from the annual, uh, champions retreat where we build community. And so I'm still actively engaged with BLab on the racial equity front. And so, 'm, part of a, a racial equity group called White Men for Racial Justice, um, that's trying to engage white men in racial equity work where we are least in involved, um, in, in this work. And so we hold a lot of power and influence and wealth. Um, and so it's working to get other white men in the work as well as I'm doing some, um, strategy consulting for racial equity organization and actually the three of them, which includes BLab, whereas we're gonna work to kind of bring, uh, this broad-based racial equity training to the whole B Corp community and also engaging sort of white men leaders in the work too.

Ben (46:01):

So still a strong racial equity, um, interest and it's something that's very important to me and it's nice, I'm sort of bringing multiple parts of my life together. And then the second thing I'm doing as we move back from New York to Massachusetts where I grew up is looking, uh, more at economic systems change on a regional basis. So I'm in the south coast of Massachusetts and have real passion for this community. And so I've, uh, just be getting proximate to members of the community and understanding what's going on and how might I bring my impact background to, uh, this kind of region, which includes Fall River and New Bedford.

Abigail (46:42):

Very interesting. Um, just so I don't miss it entirely. Um, what is the personal interest in racial justice? I mean, I understand the intellectual and the emotional and the societal interest, but it sounds like this is an issue that's quite personal to you.

Ben (47:00):

Yeah, well, earlier in my career I spent a decade in education, um, working in Boston, um, with afterschool programs and a charter school, uh, to bring about equity in the educational system using, um, a racial lens. Um, and so that was like a core part of my work. And then I went and worked for a for-profit company Preserve, as I mentioned before mm-hmm. <affirmative>, this environmentally focused. Um, and so in the process of coming into BLab and really working with companies that are performing across all levels, um, it helps remind you that we need to kind of look at holistic, um, performance that includes environment and things like racial equity. And so that's been a sort of way to kind of through BLab a way to get back to this work and, and centering it in this strategy. Um, it is, in my belief, the only way that we're gonna drive to in the, in the US context, the only way we're gonna drive to inclusive economy is if we bring about racial equity.

Ben (48:04):

Um, and so as you go about your learning journey, and everybody should be getting on this journey to kind of learn the history because we learn history in one way, but there's lots of versions of history from different points of view that we need to, uh, learn about. And as I've, as I've gone on that journey and also done my personal work, I increasingly am impassioned about, um, trying to use the, the power and influence that I have, um, to ensure that all people have kind of a, a similar footing and, uh, start on the, on the same level.

Abigail (48:38):

That's beautiful. Um, well thank you for all that you're doing. Uh, you know, for the, in this l thank you for all you're doing to help us get closer to this inclusive economy. I mean, I think it's a really important, um, you know, it it important direction for us to be going and, and if we are not inclusive, we're not gonna solve the big problems that are ahead of us with, you know, climate and, um, inclusion and, um, you know, even, even politically, I think having, having a more inclusive economy is gonna solve a lot of world geopolitical issues as well.

Ben (49:22):

Agree. And I think, uh, the message I would have is everybody can work in an impact oriented business and, um, it shouldn't be an exclusive thing. And so yes, the B Corp community is a group of leaders who have met this high performance bar, but every company can be taking steps to drive impact on their business and encourage people to use the free tool, uh, the b impact assessment that BLab offers. Um, and the good news is, despite what you may read in the headlines, is there is a massive trending upward for companies, you know, embedding purpose more deeply, deeply and looking to drive impact in their businesses.

Abigail (50:01):

For sure. Sometimes it feels like the deeper it's actually happening on the ground, the more protest there is in the news or the, the more seemingly seeming protest there is the news, but the the, on the, on the ground, it definitely feels like this is the direction we're going in.

Ben (50:18):

So. Absolutely.

Abigail (50:19):

Um, hey, thanks so much. 

CONCLUSION

What a delight to have Ben on the show today to help us better understand the ins and outs of the B corp certification program. I’ve seen the logo in windows of companies in various countries but now I better understand what it all means. I think what I find so interesting in this - and it relates to the interviews we’ve had so far - is the willingness of companies to pursue this certification on their own. Corporations are trending away from Milton Friedman’s cold pursuit of shareholder value towards more Keynesian ideals of social equity. But in this case it’s not the government levying taxes and oversight, it’s a private corporation that is offering certification adopted willfully by corporations. And it’s looking like when stakeholder values are met shareholder value often follows. That’s a win win for our mission driven entrepreneurs and investors.

CREDITS

Thank you for listening. Please follow Happy Planet wherever you listen and leave us a rating and review - it really helps new listeners discover the show [feel free to elaborate on why this matters to you]. Happy Planet was reported and hosted by me. I am also the Executive Producer. The talented Dylan Heuer [hoyer] is our producer and editor. Composer GEORG BRANDL EGOFF created our theme music. Learn more about my work and get in touch by visiting happyplanetpodcast.com.