B Corps Are One Piece of a Complex Puzzle

By Kenzie Love

Amid a growing market for climate change mitigation and adaptation planning, Sustainability Solutions Group (SSG) faces stiff competition when it responds to requests for proposals. The award-winning consultancy already has one significant differentiator from most of its competitors: it’s a worker co-op. But while this should be an indicator that SSG doesn’t do business as usual, the Co-op was still having some trouble standing out from the pack. So in 2023, it decided to certify as a B Corp.

“We needed a differentiator, ” says SSG’s Emi Do. “And unfortunately, our status as a worker co-op doesn’t communicate to the municipalities and regions and states that are reviewing our proposals what our values are and how we are unique in our approach to doing business, and so we needed to have something that demonstrated that.”

Founded in 2006 by a trio of entrepreneurs who believed businesses could be a force for good, B Lab, the nonprofit organization that confers the B Corp certification, has its share of critics. But while it may not offer a definitive solution to the issues it seeks to address, B Corps nonetheless appear to be one piece of the puzzle in building a more just and equitable economy.

When B Lab was initially founded, prospective B Corps had to achieve points across a series of social and environmental criteria to achieve their annual certification, one now held by over 8000 companies, including such well-known names as Ben & Jerry’s and Patagonia. However, new standards require B Corps to meet requirements across seven Impact Topics, a move away from cumulative point scoring, whereby a business could achieve a low score in one area but make up for it with high scores in another.  B Lab’s Clay Brown says the new standards “can serve as a roadmap for leadership on social and environmental issues when needed most.”

B Lab’s research suggests that certification has at least struck a chord with consumers. While worker co-ops seem to perpetually struggle with a lack of “awareness” around the model, one in three consumers in Canada and the US reportedly understand the B Corp label. But how much substance lies behind the “B” certified businesses can display on their storefront and packaging has led to accusations of “greenwashing”. Todd Schifeling of Temple University, who has explored B Corps in his research, says it’s inevitable that criticism of companies marketing their B Corp status would arise, and that the charge isn’t entirely fair.

“Whenever you put that message out there, there’s always the risk that it’s not substantive,” he says. “And I think that’s a healthy concern and a healthy criticism that can help drive progress forward, and in part, that’s reflected, I think, in the new standards that are coming out, which I view as a major effort to make the certification even more rigorous. I do think that there’s a trade-off, an inherent trade-off between setting such a high standard that it’s definitely not greenwashing, it’s definitely a very pure movement, but it’s a very small group that’s in there. Versus, on the other hand, having a big tent that has very low, meaningless standards, but everybody can join.”

While there has been criticism of large multinational companies being able to certify as B Corps, the tent in question certainly isn’t one “everybody can join” at this stage, given the cost and time required to ensure certification. While SSG intends to remain a B Corp for the foreseeable future, Do acknowledges this might make less sense for smaller worker co-ops, even if they already meet many of the standards

“I think certifications are definitely helpful when you are in a very competitive field where every type of differentiation opportunity gives you a leg up,” she says. “But if you’re a small worker co-op, the $2,000 to certify may feel a little bit like it’s not worth it. There might be other marketing mechanisms that are more worthwhile.”

Worker co-ops might indeed benefit from the marketing success B Corps have achieved. But there’s also a need to look beyond labels when it comes to both worker co-ops and B Corps and focus instead on impact. As Trebor Scholz observes: “Co-ops, unions, ESOPS, B Corps, DAOs, open co-ops, Exit to Community, and so forth, all have their proponents and detractors. But what matters most is not the form of the organization but the positive results that it achieves for people.”