Corporate Social Review Magazine 1st Quarter 2013 | Page 22

Capitalism and Business Buzz
Social Responsibility.
Is the B-Corp the answer?
Tim Malone is the founder of
Innoventure (Pty) Ltd. He holds
a Masters Degree in Leading
Innovation and Change from York St.
John University.

2005, has allowed people
to form “community interest
companies”.
Similar
laws
are brewing in several other
European countries.

A B-Corporation (Benefit Corporation)
is a new type of corporation which
uses the power of business to solve
social and environmental problems.

The impetus for all this comes
from business owners who
believe that existing laws
governing corporations and charities are too restrictive. Forprofit companies often face pressure to abandon social goals
in favour of increasing profits; non-profit organisations and
charities are needlessly restricted in their ability to raise capital
when they need to grow.

To address society’s greatest
challenges, B-Corporations create value for society, not just
shareholders. As of April 2013, there were 737 B-Corporations
across 60 industries in 24 nations around the world. The
B-Corporation Certification is for sustainable businesses much
like Fair Trade is to coffee, LEED is to buildings and USDA
organic certification is to milk. B-Corps are certified by B Lab, a
nonprofit organisation dedicated to using the power of business
to solve social and environmental problems. B Lab drives
systemic change through three interrelated initiatives:
•

Building a community of Certified B Corporations to make
it easier for all of us to tell the difference between ‘good
companies’ and just good marketing;

•

Accelerating the growth of impact investing through use of
B Lab’s GIIRS Ratings and Analytics platform; and

•

This prevents socially minded organisations from pursuing their
goals as efficiently as possible. Existing laws for co-operatives
and mutual companies are inadequate - hence the need for
B-Corps and other novel structures. There is no tax advantage to
being a B-Corp, but there is to some of the new legal structures.
Whether these new legal forms will change business remains
to be seen. Supporters of existing corporate law say it does not
prevent firms from setting social and environmental goals or
rigorously reporting on their performance in delivering them and that pursuing profit is often the best way to benefit society.

Promoting legislation creating a new corporate form the benefit corporation - that meets higher standards of
corporate purpose, accountability, and transparency.

B-Lab provides the information as a public service and does
not receive any monetary or other support from companies,
attorneys, or third party standards in order to be listed. Any
company can become a certified B-Corp as long as they score
above an 80 on the online assessment.
A B-Corp creates the legal framework for firms to remain true to
their social goals. To qualify as a B-Corp, a firm must have an
explicit social or environmental mission, and a legally binding
fiduciary responsibility to take into account the interests of
workers, the community and the environm