
My work has focused on studying and writing about businesses that aim to “do good,” in all its varied definitions, for about 20 years now. A significant part of this has involved researching and teaching about the B Corp movement. I’ve authored two in-depth Harvard Business School case studies on B Lab, written a book titled Better Business: How the B Corp Movement is Remaking Capitalism, and more recently, I’ve become a proud member of a B Corp: Cambridge Judge Business School Executive Education.
When Dr. Bronner’s announced it would not be renewing its B Corp certification, many people, including members of the media, asked me what this means for the broader B Corp movement, so I thought I would write down some thoughts.
First, regarding Dr. Bronner’s decision specifically, I have tremendous respect for the company, they are a true pioneer in responsible business, and I support their calling attention to the need to uphold rigorous and stringent standards and avoid greenwashing.
But as I discuss a bit more below, my assessment of the impact of the B Corp movement more generally focuses on the broader context of building regenerative and equitable economic systems, and in this I see tremendous value in the work of B Lab and B Corps.
What is the theory of change? It may sound counterintuitive, but for me, the B Corp movement has never been solely about the number of B Corps. Instead, it is a broader social movement focused on transforming our economy to prioritize the principles of regeneration and equity.
While I am inspired by the growth in number of B Corps—from fewer than 200 when I began studying the movement to almost 10,000 today—voluntary action by companies undergoing a certification, even thousands of companies, will not be enough to solve the world’s biggest challenges.
But the number of B Corps is not what this movement is about. In Better Business, I discuss how Sistema B, the Latin American organization that certifies B Corp in that region, was essential to recognizing that for systemic change a broader mission is needed to including legal reforms, influencing investment standards, engaging politicians, building coalitions within communities at both local and national levels and more. These broader ideals now permeate the entire B Corp movement.
One manifestation of this systemic focus has been the creation of a new corporate structure – the benefit corporation – by which a company legally commits to delivering societal benefit alongside the profit-first interests that define traditional companies. B Lab created this idea and mobilized grassroots action to pass these laws around the world. First passed by Maryland in 2010 in the last 15 years, over 40 US states, Washington DC, Puerto Rico, and other countries including Italy, Colombia, Ecuador, France, Peru, Rwanda, Uruguay, and the Canadian province of British Columbia have adopted benefit corporation structures. It is estimated that there are now over 15,000 benefit corporations around the world. This model provides governance structures for corporate decision makers and directors to consider purpose and responsibilities beyond just delivering value to shareholders.
While benefit corporations are an important element of systemic change, here too, we need more than just a voluntary opt-in model. Importantly, several countries are looking at broader reform to corporate laws including in the UK with the Better Business Act, Canada’s 21st Century Business Act and also elements of the Corporate Sustainability Due Diligence Disclosure (CSDDD) in the EU.
Another important aspect of Sistema B’s original vision that I have personally appreciated is recognizing the importance of education and including academic institutions in the model of change. Sistema B founded Academia B and there is also now a vibrant group of B Academics around the world. Through this work, thousands of next generation leaders are learning about these new models for responsible business and in some cases students are able to participate in B Corp certifications themselves.
This is how change in society happens. There is no silver bullet or magic wand, innovations occur on the periphery and then through hard work on multiple different fronts, they work their way to becoming the dominant model.
Defining what it means to be a sustainable and equitable business. To me, one of the bigger impacts of the B Corp movement lies in creating models and processes that demonstrate the kinds of environmental and societal impact that is possible and in many cases necessary.
Before B Lab's founding, there was a lack of detailed tools for companies to assess and demonstrate their impact on society and the environment. The original B Impact Assessment (BIA) was on a spreadsheet created by B Lab co-founder Bart Houlahan, and over the years through at least 6 major iterations, it has been developed into a sophisticated framework for assessing impact used by hundreds of thousands of companies and investors around the world.
While transparency alone is not enough to drive systemic change, measuring corporate impacts on society and the environment is essential. Without robust measurement tools, clear standards, and a mechanism for holding companies to those standards, progress would be impossible.
Importantly, here too societal change is a long process, and we need governments to effectively regulate and guide corporate behavior. For instance, the Corporate Sustainability Reporting Directive (CSRD) in the European Union which stands on the shoulders of the BIA and decades of other work, aims to provide a mandatory framework for accountability on a much larger scale.
There are questions recently about if some of the CSRD will be scaled back, and that will be regrettable, but the majority of the directive appears to be still staying in place and will provide a foundation for holding companies accountable for their social and environmental impacts.
Maintaining those standards at the core. Almost a decade ago, B Lab co-founder Jay Coen Gilbert visited a class I was teaching at Cornell. At the time, the movement was grappling with a significant challenge – with the advent of the benefit corporation law, existing B Corps would be required to become benefit corps if that option was available in their jurisdiction. At the time, many existing B Corps, including high-profile names like Warby Parker and Etsy said they were unable to convert to a benefit corp because their investors and boards were concerned about the uncertainty of such a new model.
My students worried that losing such well-known brands would be a setback for the movement and argued that B Lab should be flexible to retain them as B Corps and possibly introduce a tiered certification system like a "platinum/silver/bronze" model used by LEED in certifying buildings, to make it easier for these companies to remain affiliated with the movement.
However, Jay’s response was emphatic. While he understood the sentiment, he stressed that maintaining rigorous standards was non-negotiable. The integrity of the movement depended on not diluting its criteria for the sake of retaining big names.
Jay’s strong pushback on the students has stuck with me since then and I have kept this in mind when I have seen some of the challenges of growth in the B Corp movement both in number of companies and also the scale of those that are being certified. Recently for instance, there has been a lot of attention focused on the multinationals who are part of the movement and if these companies can genuinely meet stringent criteria.
It is through this lens that I see the updated set of standards – version 7 of the BIA – which will be rolled-out soon. B Lab has importantly shifted assessment from a focus on clearing a threshold of total points across different areas (so low performance in one area could be offset by strong performance in another – a common source of criticism) to mandating companies meet thresholds across 10 different areas.
To me, this represents another instance of how B Lab has continually evolved and worked to push the boundaries on impact. It has never been a perfect system, but I think B Lab deserves a lot of credit for pushing the boundaries on assessing impact, and when holes or problems are identified, working hard to address concerns and make the system better. This may not be as fast or comprehensive as some may want, but again, through this kind of effort is how change happens in society.
Incidentally, returning to Warby Parker, years later, after the benefit corporation model had become well-tested among investors Warby Parker ultimately rejoined the B Corp community before going public.
Working collectively for impact. Through my engagement with the movement, another powerful aspect is the meaningful connections that not only emerge between B Corps in common industries, and in localities and around the globe, but also how there are durable partnerships with many other organizations such as Conscious Capitalism and others. Change requires collective action and mobilization of many who are committed to societal impact is one of the strongest aspects of the movement, which the successes above in the legal, educational and entrepreneurial realms all attest to.
Ultimately, I believe the B Corp movement remains a vital force for change. Continuing to uphold – and push the boundaries on – rigorous standards, foster open dialogue, and focus on the broader goal of systemic transformation are all essential elements if we are to build a more equitable and sustainable economy.