B-Corps: Doing Good and Making a Profit
By Julie Thibodeaux
When Gordon Gekko proclaimed “greed is good” in the 1987 movie “Wall Street,” the mantra appeared to inspire the business world for decades to come.
However, a new era is dawning as an emerging generation of entrepreneurs are saying that “doing good” can be profitable. One of the signs of the changing times is the rise of B corporations. The B stands for social benefit.
The B corporation certification is conferred by B Lab, a Pennsylvania-based nonprofit launched by three friends, Jay Coen Gilbert, Bart Houlahan and Andrew Kassoy, in 2007. They created the B Corp accreditation as a way to verify that companies were looking out for people and the planet along with profits.
More than 500 companies in the U.S. and Canada have received the B Corps certification from B Lab, including 13 in Texas.
Adbongo is a Dallas-based and eco-friendly green business incubator that specializes in accelerating sustainable businesses. The company is one of seven certified B Corporations in the Dallas-Fort Worth area.
“We became a B corporation because it is the only model that makes sense for our business,” said John Bush, president of Adbongo. “Our purpose matches the non-profit model while our structure lines up with the for-profit route."
Bush said he often found it difficult to explain to people how his company, which aims to create business eco-systems that strive for zero waste, was different. Having a new class of business helps define Adbongo’s vision.
“Because I was a for-profit company, people didn’t understand I had humanitarian mission,” he said.
To receive the designation, businesses must fill out an application that documents the company’s governance, employee compensation, products and services, suppliers, manufacturing and energy usage to determine the extent of the company’s social responsibility and environmentally friendly practices.
To qualify as a B Corporation, applicants must score 80 out of 200 possible points. In addition, they must pay an annual fee, based on net revenues. The fees start at $500 for a business that makes under $2 million.
Tom Kemper is founder of Dolphin Blue, a Dallas-based B Corp, which sells office supplies made from environmentally friendly and recycled material. He said the cost for the certification was affordable and the application was less daunting after he got started.
“For us, it was a no-brainer,” said Kemper. “It sets us apart from all the suppliers that do what we do.”
Lisa Taylor, the founder of Taylor-Made Press, a Dallas-based public relations firm that promotes the arts and nonprofits, said she received B corporation certification last year. She hopes B Lab will inspire others to change the way they do business.
“I’m glad it exists,” said Taylor. “People need this kind of nudge.”
Other Metroplex-area B Corps include First Rate, an Arlington-based IT software and services company; Helios Insurance Group, a business insurance company; and Satori Capital, an equity firm. In addition, EARTH-NT, a local sustainable business development, announced its B Corp status this month.
While B Lab offers third-party certification, seven states have enacted legislation to create a new class of businesses called Benefit Corporations, also called B Corporations, to offer legal protection to for-profit businesses that want to address social and environmental issues. Currently, corporate law in other states, including Texas, requires that businesses make decisions based solely on maximizing shareholder profit, opening up business leaders to being sued by shareholders for considering other factors. While B Lab offers credentials, this legislation provides businesses an option to charter a company that is legally bound to have a positive material impact on society and the environment.
B Lab lobbied to pass the legislation in Maryland, which became the first state to enact it in 2010, and supports extending it throughout the U.S.
While a state-administered Benefit Corporation doesn’t require B Lab certification, B Lab doesn’t view them as competition but complementing its mission to change the way the world does business.
“One doesn’t preclude the other,” said Katie Kerr, B Lab communications manager. “Overall, we want the movement to grow.”
Julie Thibodeaux is a Fort Worth-based writer covering environmental issues, green topics and sustainable living. Previously, she worked as an editor and writer at the Fort Worth Star-Telegram. Contact her at email@example.com.