The solar panel installer, the outdoor gear manufacturer and the software company are all certified B Corporations. The relatively new, socially conscious business designation – “B Corp.-certified” for short – is similar to the Good Housekeeping Seal of Approval for “green”-conscious companies.
Eighteen companies in the Boulder Valley have gone through the certification process created by the B Lab, a nonprofit group based in Wayne, Pennsylvania. Companies who want to become certified go through a free analysis that includes filling out paperwork and answering questions from B Lab employees.
They’re part of a growing cadre of more than 700 companies around the globe — including Ben & Jerry’s Homemade Holdings Inc. in Vermont — that want to go through the independent verification process of being socially and environmentally conscious.
While other certifications exist, B Lab’s appears to be the most common and has the most rigorous standards, based on anecdotal research. When applying for B Corp. status, companies must answer questions about their governance, labor practices, community involvement and other similar business practices.
Once a company is certified as a Benefit Corporation by B Lab, it pays an annual fee based on its revenue — $500 per year for companies that make less than $1 million up to $25,000 per year for companies that make $100 million an d more.
Seleyn DeYarus, owner of Best Organics Inc. in Boulder, said she was motivated to achieve B Corp. certification to show customers that hers is a “triple bottom line” business. “Triple bottom line” is used in socially conscious terms as a company’s focus on good business practices related to “people, planet and profit.”
In general, the “triple bottom line” idea is for a company to follow business practices that are fair to people and to the planet as well as to provide a greater economic benefit to the community.
B Corp. certification “is a great tool in assessing where you can improve and where you’re doing well at all levels,” DeYarus said. “Whatever kind of business you are … this provides a comprehensive, thorough overview of how you’re doing.”
The certification process is rigorous, and B Lab conducts onsite audits to make sure companies do the things they say they do, DeYarus said. That could include doing business with certain other socially conscious suppliers or making sure office supplies are made of recycled products whenever possible, according to B Lab information.
For consumers, the B Corp. certification label indicates that a company follows fair labor practices and other, similar standards, said Kim Couponas, co-owner of GoLite Inc., an outdoor clothing company based in Boulder.
Couponas compares the certification to an EnergyStar certification on an energy-saving appliance or a LEED (Leadership in Energy and Environmental Design – an industry standard for “green” building) certification for an energy-saving building.
GoLite customers in particular and outdoor industry product customers in general are getting more interested in buying from companies that practice various “green” activities, Couponas said.
“A certain consumer really values that, so it increases your brand loyalty and revenues,” Couponas said. “It’s a good thing, because (B Lab) makes sure that people aren’t ‘green-washing’ or putting up smokescreens and not telling the truth about their companies.”
Brook Eddy, founder of Boulder-based Bhakti Chai LLC feels similarly.
Even though it’s hard to measure the financial benefit of what the company might get back from being certified as a B Corp., it’s “the right thing to do,” Eddy said.
“It feels good. The return on investment for us is how we’re treating our community and the planet and the world,” Eddy said.
Bhakti Chai is on a mission to produce zero waste in its manufacturing processes of making chai tea, for example, and receiving the certification reflects that, Eddy said. She compared the certification to what a company might do to be certified as “fair trade” or organic.
B Lab employees “made sure that we were doing what we were saying,” Eddy said.
Steve Schueth at First Affirmative Financial Network LLC’s office in Boulder calls the certification “an element of our market positioning.”
“I don’t think it can hurt us, but I don’t think I can attribute any of our growth to it going forward,” said Schueth, president of the investment firm, whose main headquarters is in Colorado Springs. Schueth is based in Boulder with an office of five people, about $765 million in client assets under management and about $8.5 million in revenue in 2011. The office in Colorado Springs has 10 people.
Having B Corp. certification is “a credential. We’re a company that walks our talk,” Schueth said.
Ray Tuomey, a co-founder at Boulder-based Namaste Solar, agreed.
“In honesty, why you do this is not an ROI (return on investment) thing, but it is a side benefit,” Tuomey said.
As another side benefit, B Corp.-certified member companies trade discounted services among themselves.
Business schools at New York University, Columbia University and others also have become involved with the movement, offering various loan forgiveness deals to students whose companies are B Corp-certified who want to go to school to receive master’s degrees in business administration.
The nonprofit group was founded in 2006 by Andrew Kassoy, Jay Coen Gilbert and Bart Houlahan in Pennsylvania.
Separately, Colorado legislators recently passed House Bill 13-1138, a bill that was drafted in consultation with B Labs. It gives public benefit corporations legal protection to use some of their profits to pursue social and environmental standards. Gov. John Hickenlooper signed the bill into law in May.
The new law defines public benefits as corporate support for artistic, charitable, cultural, economic, educational, environmental, literary, medical, religious, scientific or technological causes. If a corporation has shareholders, two-thirds of them must consent to amending a company’s charter to become a public benefit corporation. The nature of the desired public benefit must be specified in a company’s articles of incorporation.
Traditional corporate structures call for companies to maximize economic returns to shareholders. So the new law protects a company from potential liability if it chooses to divert company resources to non-business causes, supporters say.