Entrepreneurs, consumers, governments, and businesses are increasingly using market forces to solve social and environmental problems. B Lab, a five-year-old nonprofit, is attempting to turn that potential into a new kind of corporation that recognizes true corporate social responsibility. The organization works by providing a framework that companies must take in order to be certified as a “B Corporation.” And these aren’t just cosmetic steps like increased recycling; companies must write socially responsible policies into their charters and bylaws to qualify.
We had a chance to talk to two of B Lab’s founders at this week’s ACT II: Aspen Global Leadership Summit about how the cofounder of AND 1 (a basketball apparel and footwear business) and a private equity investor ended up trying to change the business world. The organization has, essentially, launched what cofounder Jay Coen Gilbert calls “LEED for business.” Certified B Corporations (the B is for benefit or “be the change you wish to see in the world,” depending on your preference) have to meet
rigorous legal accountability, environmental, and social performance
standards. It’s a way for companies to demonstrate to consumers,
investors, and anyone else who may be interested that they are doing
well by doing good.
As consumer interest in corporate social
responsibility has grown (and the financial crisis has started to change
the business community’s priorities), so has interest in B Corp–there
are now over 370 Certified B Corporations, up from 125 in 2008. Five U.S.
states recognize B Corporations as a distinct legal entity (like S
Corporations and C Corporations), and more are set to sign legislation
in the near future, according to Gilbert.
B Lab originally grew out of an Aspen Institute fellowship project. The Institute, an organization that encourages values-based leadership, asks all of its fellows to complete a leadership project. B Lab founders Jay Coen Gilbert and Andrew Kassoy are both fellows at the Institute–and the nonprofit was Gilbert’s big project.
Gilbert accepted the fellowship after being nominated by Kassoy, who was already a fellow. “The Henry Crown Fellowship finds people at inflection points in their life…where there is a crack of uncertainty,” says Gilbert. “I was at a point in my career where I knew I was leaving AND 1.” And so B Lab was born in 2006 out of a desire to put a framework around the social consciousness that was starting to grow in the for-profit world.
Gilbert and Kassoy have high hopes for B Lab. The other day, Gilbert was approached by an Aspen Institute fellow who works at Kleiner Perkins Caufield & Byers. The fellow recounted a conversation they had with a client, who called with the exciting news that their company had become a Certified B Corp. It’s exciting, Gilbert says, that “being recognized as a leader in a for-profit social enterprise is something to be proud of,” as well as something that businesses “would want to tell a mainstream Silicon Valley investor.”
B Lab couldn’t have succeeded, of course, without momentum in the business world. “We reached a moment when this was all happening anyway,” says Kassoy. “We put a name on what was happening.”