Benefit corporations, a new paradigm for business models
Benefit corporations are bringing an interesting and innovating answer to the question of which role should corporations play in our society.
An innovative birth-process of businesses
A Benefit Corporation (or B Corporation, as opposed to the traditional C Corporation or S Corporation) is a new kind of “for-profit” business which appeared in the United States during the second part of the 2000s. B Corporations are a new way to conceive business models, in the sense that making profit is only a part the corporation’s purpose. Corporations are comprehended as chain links of our society’s global structure. In consequence, the shareholders of the B Corporation judge its performance based on the company’s social, environmental, and financial performance – and a right of action is allowed to enforce the company’s mission when the business has failed to pursue or create a general public benefit.
In order to make that right efficient, a new legal status has been created for corporations in the United States. In September 2015, thirty federal states had passed the “Benefit Corporation” legislation, and in January 2015, 500 Benefit Corporations had been created in the US.
A certification to complement the process
Alongside with the legal status, a certification has been created, though it is not necessary to have the legal status in order to obtain the certification. The certification allows pre-existing companies to commit themselves to this movement. B Corp Certification was initiated in 2006 by the NGO « B lab », handled by 3 American entrepreneurs coming from Philadelphia. The certification process starts with a 200 questions survey on the company’s CSR performance. A minimum threshold must be reached. Once the test is passed successfully, B lab verifies all the information and gives a grade, which is updated every 2 years. The results and reports are accessible on the B Corp website. Final step: signing the « Declaration of interdependence » and paying the annual contribution based on the turnover of the company.
The certification is very interesting for the companies: it is a certification made by businesses for businesses. Only for-profit companies can be certified. The survey is entirely accessible on B Corp’s website, which makes the procedure very transparent.
Today, 1 600 B Corps are reported in 47 countries. Amongst them: Patagonia, Etsy, Ben & Jerry’s. In France, 11 companies have been certified, including Natures & Découvertes.