Why Your Business Should Be a Benefit Corporation, or B Corp Brands leading with purpose will yield stronger reputations, brand affinity and bottom-line results.
By Randy Garn
Opinions expressed by Entrepreneur contributors are their own.
We live in an era of social responsibility, both on an individual and corporate level. This responsibility is not only felt from internal pressures but is heavily demanded by a conscientious consumer base. Many consumers will avoid buying from brands without social causes or give-back plans. This is why, if businesses today want to succeed, they must find a cause, champion it, and embrace the values that cause embodies.
When your business champions values and works for a purpose, it will be more profitable. That is the bottom line. But, something interesting and intangible also happens: your consumers will be more likely to recommend your business to friends and family, defend you in the event of a misstep or public criticism, and trust you implicitly. They feel like they're vicariously supporting your cause when they purchase from you, which will build brand loyalty. The 2020 Zeno Strength of Purpose found all these positives, and more, in their study of 75 brands and more than 8,000 consumers in eight countries.
Related: With a Public Benefit Corporation, Profit and Good Karma Can Coexist
In addition to building your bottom line, finding a specific, authentic purpose will resonate with your employees. Making CSR (Corporate Social Responsibility) a part of your corporate culture helps your employees feel connected to your organization and increases job satisfaction, according to the Center for Creative Leadership.
But how do you prove that your commitment to create change is truly authentic, rather than just jumping on a marketing bandwagon?
In many instances, people are more likely to trust the word of a third party, rather than the word of the business itself. Most states have a process to become a "benefit corporation," which shifts the model of shareholder primacy to stakeholder primacy. Your company must commit to CSR and the welfare of all stakeholders — employees, consumers, manufacturers — rather than those directly profiting through shares.
Becoming a state-recognized benefit corporation is a great first step, but the designation results from a self-assessment, which can leave consumers wanting additional reassurance.
In 2006, B Lab, a nonprofit organization, was founded on the idea that business can be a force for good. Their rigorous certification process and emphasis on third-party validation, legal accountability, and public transparency has helped usher in a new standard of corporate social accountability: the Certified B Corporation. This not only enhances consumer trust in a company's desire to give back, but reaffirms the company's desire itself.
From breweries to plastics manufacturers, to outdoor apparel makers, to bakeries — the scope of B Corp business extends far and wide. B Corps can be run by a sole proprietor or be a large corporation. They can be public or private, but all share a triple bottom line of people, planet, and profits.
Related: 5 Reasons to Become a Benefit Corporation
What does it look like to work for a B Corp? We interviewed employees at Malouf, a Utah-based B Corp certified by B Lab in 2019.
Malouf was already deeply committed to values and change-making. However, the marketing and legal team at Malouf made a business decision to go through B Lab's exhaustive certification process. Since its certification, the team has seen improvements they can specifically attribute to their new status.
Marketing director Scott Carr described the major areas where he has noticed change. "We've increased trust and loyalty from our current customer base, both with our business partners and our consumers. The certification has opened doors to new partnerships — large businesses and potential licensees are more willing to do business with a company that is making a positive impact on the world."
Carr also noted a concurrent change in employee engagement, stating, "We've seen improvements in talent, recruiting, and overall employee satisfaction. We've actually doubled the number of female applicants since becoming certified in 2019."
To learn more about Certified B Corporations, visit bcorporation.net.
The truth is, turning your business into a Benefit Corporation is much more than a consumer-driven expectation; it's an absolute necessity. Sure, it shores up your bottom line in an impressive way, but it also gives direction to decision-making, provides fulfillment to your employees, and creates an environment of service and give-back that will help your company thrive.
Related: A Benefit Corporation Can Have a Positive Impact on the World ...
