Are you a social entrepreneur who wants to make a difference in the world?
If so, you have the opportunity to stand out from the crowd by meeting the highest standards of verified social and environmental performance, transparency, and accountability.
You can do this by joining the community of Certified B Corps, businesses that are using business as a force for good and going through a rigorous process as part of their commitment to continuous improvement.
This guide provides you with everything you need to know about B Corp certification for startups:
- The Benefits of B Corp Certification for a Startup
- Overcoming Objections to B Corp Certification
- Preparing for Certification and Pending B Corps
The Benefits of B Corp Certification for a Startup
The B Corp Certification process requires that you complete the B Impact Assessment (BIA) and get a verified score of 80 out of 200. The BIA can serve as an excellent framework for sustainability, since it looks at both your social and environmental practices.
Often people think that the end benefit is the stamp of approval from a third-party. This is important, but there’s more to it than that.
When people say, as they sometimes do, “we don’t need a certification, we’re already doing it” – they’re missing the point. The point isn’t just the certification – it’s actually to objectively evaluate your company’s impacts and improve them. B Corp certification helps you to do just that.
In fact, Rose Marcario, former CEO of Patagonia – arguably one of the companies with the greatest positive impact in the world – explained that it’s the only tool that helped them to objectively evaluate their impacts:
The B Impact Assessment helps us keep our eye on the North Star by letting us know where we have improved and where we fall short—and need to dig in.”
Here are just a few of improvements that B Corps commonly make:
- Tightening up governance practices
- Honing mission and embedding it into the company
- Refining the business model to maximize positive impact
- Becoming more transparent
- Taking better care of employees
- Expanding practices for giving back
- Establishing a socially responsible and inclusive supply chain
- Increasing support of your local economy
In the course of making these improvements, you’ll also be formalizing practices, establishing and tracking metrics, setting goals, and otherwise taking steps to ensure that your impact is a positive one throughout all aspects of your business.
As a result, by making the changes above, you’ll actually be building a better business compared to your competitors who may not be taking these steps.
This may explain why B Corps were 63% more likely to survive the recession than other businesses. Embedding B Corp practices early on can help you to set up your startup for success.
Josh Driver, founder of tech startup Selfless.ly, explained why he chose to build a tech startup as a B Corp:
The B Corp certification makes a strong statement about how Selfless.ly operates, the culture that surrounds our team, and the accountability we have to others to help make the world a better place. The type of environment we create and the impact Selfless.ly can make are on my, and my co-founder’s, shoulders. We do not take this lightly. The required criteria that are measured by being a B Corp is exactly how I want to run Selfless.ly. A Certified B Corp status sets the standard for expectations from our Board of Directors, and it raises a bar that all businesses should truly be operating by anyway.
I firmly believe that the example set by a being a Certified B Corp leads directly to profitability. By building the business around the Impact Assessment, we can engineer the change we want to see in the world.”
Magali Mathieu, Co-founder & Chief Partnership Builder at atlasGO, pointed to the need to embed impact into her tech startup:
It was so important for us to become a B Corp from day one; it was an easy decision really. A lot of times as a startup founder, you hear: figure out your business model and then worry about the impact, especially as a tech startup in San Francisco. For atlasGO, impact is at the core of what we do – our business wouldn’t exist without it. Choosing to be a B Corp from day one allowed us to set the right practices in place from the beginning. I truly believe that as we grow, this B Corp certification will continue to be a competitive advantage.”
The truth is that there are many benefits of B Corp certification for your startup. The Harvard Business Review acknowledges that it pays to become a B Corporation because you’ll be able to win over conscious consumers, attract and retain talent, and benchmark your practices and realize cost savings.
The ability to recruit top talent could be a particularly meaningful benefits for startups that need to assemble strong teams to give their young companies the best chance for success.
You’ll also tap into an amazing community of entrepreneurs and business professionals committed to doing good – and the community itself is often viewed as possibly the greatest benefit to getting certified. (Female founders may be particularly interested in joining the B Corp Women CEOs, who are leading the We The Change movement.)
Overcoming Objections to B Corp Certification
As with anything else, though, when something is new, it tends to attract resistance. Thus, despite the numerous benefits, when it comes to certifying startups as B Corps, there are also many objections.
Founders often receive well-intentioned yet faulty advice as they consider whether or not to get certified as B Corps:
- You won’t be able to raise capital – this is the top objection that I hear most frequently from founders, even though the evidence to the contrary continues to mount. The truth is that investors, including almost every single VC firm in Silicon Valley, have invested more than $2 billion in Certified B Corps. Running a Certified B Corp or Benefit Corporation simply has not stopped impact entrepreneurs from raising funding. In fact, there’s evidence that investors like benefit corporations – and being a B Corp certainly hasn’t stopped Allbirds from getting investment as a startup and achieving a valuation of $1.4 billion. The bottom line is that while some investors may not want to invest in a business with a social and environmental focus, many others will choose to do so.
- Your attorney doesn’t recommend it – this is the second objection that I hear from founders. If you hear this from your attorney, it may help to clarify the difference between B Corp Certification and being a Benefit Corporation; one is a certification, while the other is a legal designation, and not all certified businesses need to become Benefit Corporations (see the legal requirements for details). If your attorney has concerns about having you set up your company as a Benefit Corporation, you may need to decide how important preserving your mission is to you as an impact entrepreneur. Without the legal requirement to preserve your mission, you may find yourself at odds with a future CEO or board who want to dismantle your social enterprise, as was attempted in a case that resulted in the first ever benefit enforcement proceedings in the U.S. (the mission of the B Corp was upheld in the courts). Consider talking to a B Corp attorney or a B Corp that is also a benefit corporation to get their perspective on this.
In addition to the considerations above, there are a few other concerns, though these are more likely to affect all founders, not just those considering B Corp certification.
- You don’t have the time – let’s face it, everyone, especially founders, is short on time, but you make time for what’s important. Ultimately, if you’re an impact entrepreneur, what can be more important than ensuring the positive social and environmental impact of the company you’re creating? Yes, it will take time, but everything you do will be with the goal of creating a better business. Plus – and this is important – you’re already making fundamental decisions about your company every day, and the Impact Assessment will provide guidance to help you ensure that your decisions will maximize your positive impact.
- You don’t have the money – when I speak to business owners, they’re often surprised that the certification fees are less than what they expected: often less than one half of one percent of annual revenues. When you take into account the community that you get access to, the marketing benefits, the discounts available to B Corps (including for Salesforce and Intuit software), and more, the business case becomes even more compelling. Every smart business person knows that you need to invest in your business, and as an impact entrepreneur, investing in building a good business may be one of the best investments you can make in your company.
- You haven’t figured out your business model yet – this is actually one of the reasons why B Corp certification can actually help you. A big part of the Impact Assessment is evaluating your business model to see if it’s beneficial for workers, your environment, or your community. B Corp certification can actually help founders to ensure from the beginning that their business model is going to have a positive impact.
B Corp certification isn’t for everyone. It’s a rigorous process that sets high standards for a company to operate responsibly. The concerns and objections above are enough to stop many startups from working on this.
The certification provides a meaningful way to differentiate businesses that are ready to make this commitment, in a comprehensive and transparent manner, from those who – for whatever reasons – may not be able, willing, or ready to make the same commitment.
Each founder needs to make the decision individually about the company that he or she wants to build.
Preparing for Certification and Pending B Corps
In order to get certified, you need to be in business for one year, and the assessment itself is made up of questions that look at your practices and activities for the previous year.
This makes sense, if you think about it: if the assessment was focused on your intentions, on what you wanted to achieve, almost every business could be a B Corp.
Looking at what you’ve actually done, however, is more meaningful – and can be more humbling – than looking at your intentions.
The challenge for startups that want to get certified is that there is also very little publicly available guidance about how startups can adapt the standards in the very early stages of a company’s formation. You’re left to figure this out on your own, which can be a challenge for founders who are busy raising capital, forming their teams, and getting their company up and running.
As a result, during that first year, you may be missing opportunities or putting into place practices that may not help you to have the positive impact that you want. Some of these may be difficult or costly to change later. You may lose valuable time, waste money, and make it harder for you to get your business certified.
If you’re a social entrepreneur, there is a better way.
You can be intentional about incorporating B Corp standards into your business model, governance structure, worker practices, community engagement, and environmental stewardship from the beginning. This will prepare you for certification later, but – important – it will also help to create a better business today.
You will also save time and money as a result. For example, one of the questions on the Impact Assessment asks about your bank: is it local, independent, a B Corp, or a credit union? If you’re waiting until you’ve been in business for a year before you get certified, you will already have set up a bank account, possibly with a big Wall Street bank that is taking money out of your local community. It will be a hassle to change banks later.
However, if you’ve used the Impact Assessment early on to build your business, you will already have selected a bank that is working to support your local economy. You’ll be able to focus your energies on other impactful practices that will help your business.
If you choose to, you can apply for “B Corp Pending” status that allows your company to signal to customers and investors that it is committing to meeting the highest standards for social and environmental responsibility.
A startup can achieve B Corp Pending by completing the B Impact Assessment, meeting the legal requirements, and paying a $500 fee.
While startups don’t have to take this step to prepare for certification, it may make sense for certain companies.
Would you like to build your business as a B Corp? Fill out the form below and let’s discuss how your company can get started in joining the B Corp movement.