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Don't Expect 'Do-Gooder' Corporations to Save the World

B Lab markets their do-gooder stamp of approval as a sign of global citizenship and transparency. In fact, it's a half-measure signifying nothing.
Skyscraper big business

In 2006, in Louisville, Kentucky, Terena Bell opened a translation and language services company and called it "In Every Language." The company's motto was "Translating Words, Transforming Lives," and its goal was ambitious. As Bell wrote in a piece for the Stanford Social Innovation Review, she wanted to "solve two global problems at once: the language barrier and world poverty."

But not everyone in the community was excited about Bell's work. After her business was opened in 2006, non-profits in the area began criticizing her for-profit approach. "The director of one resettlement agency accused me of trying to take advantage of 'poor refugees' for personal gain," she wrote. "It didn't take long to understand what she meant. She didn't really think I was taking advantage of refugees; she thought I was profiting from them."

To counter this notion, in 2011, Bell finished the process of establishing her business as a B Corporation, a certification recognizing that a company's owner is using the business as "a force for good." This purposefully vague definition allows B Lab—the non-profit organization behind B Corporation—to certify companies as disparate as print publications (Good magazine), tea from Buenos Aires (INTI ZEN), and a hardwood furniture company based in Portland (The Joinery).

To get certified, a company needs to pass a few minor legal requirements, and then take a B Impact Assessment survey, a questionnaire concerning the company's impact across the categories of Governance, Workers, Community, and Environment. (Sample questions include: What percentage of energy used is renewable? How many days off do employees get? What percentage of management is from underserved populations?) If a company scores 80 out of a possible 200 points, they're in. The company can then choose to pay a fee—between $500 and $50,000, depending on the company's revenue—to get certified.

The idea behind a B certification might sound attractive at first: A company can use the certificate to brand itself plausibly as a force for good, in an age when consumers theoretically care about ethical consumption. Such a certification could help allay the fears of suspicious non-profits who see someone muscling into their field—but it's also about developing an ethos of global citizenship, one that will theoretically foster relationships with other similarly idealistic corporations, then expanding to sell their products to even more conscientious customers.

By numbers alone, the process has been a success. The front page of the B Lab site currently has a running tally of 2,133 corporations in 50 countries, representing 130 industries, that are official B Corporations. But Bell's In Every Language company is no longer among them.

While the veiled hostility from the other non-profits simmered down (either because of the certification, or simply because they became more familiar with the work being done), when it came time to renew the certificate, Bell chose not to. When I asked her why, she was blunt about how the cost for the certificate ("one-hundred-and-something bucks") didn't match what she got out of it ("we got jack shit"). "The cause is a valid one," Bell tells me, "but I could do something else with that money."

Why didn't it work for Bell, and could this certification ever be a good idea for other companies? One problem may be lack of awareness. B Lab describes its certificate as "what Fair Trade certification is to coffee or USDA Organic certification is to milk," but, as a member of said consuming public, I've known about its existence for only a month or so. It's impossible to support a business because it's a B Corporation when you don't know what that means.

Another problem may be the low barrier to entry. I don't care what test you're taking; if a passing grade is less than half (in this case, 80 out of 200), the test likely needs some work, as certain standards may not be up to par to what the definition of "force for good" means.

Conscious Company magazine

For instance, as a freelance writer, I was curious to see what publications qualified as a B Corporation. One of them was Conscious Company magazine, founded in 2014 as "a magazine for business leaders, entrepreneurs, and the next generation of professionals looking for meaning and mission in their work." According to its B Corporations profile, it scored a whopping 167 out of 200 on the BIA, placing it well above the median of 55.

Yet, when looking at the score breakdown for Conscious Company, I noticed they scored an "N/A" on its listing for workers. When I visited the magazine's submissions guidelines, I saw why. The editors don't use workers, but rather rely on a "community of forward-thinking, influential changemakers to help us co-create the content." Now, I don't quite know what that means, other than that they don't pay their writers. And from the point of view of this writer, it's tough for me to see how using free labor is a force for good.

But perhaps the biggest problem with B Corporation certification is that it doesn't quite see that "a force for good" and "business" are somewhat inherent contradictions.

"B Lab presents itself as a philosophy, but they're a business," Bell says. "They may file as a non-profit, but it's all about them getting so many checks in, and stamps out there, and they have their own bills to meet. It's not positive or negative, but it's like putting on flour that it has riboflavin inside. I just don't really care."

This contradiction is perhaps nowhere as evident as in the last paragraph on the company’s page explaining "Why B Corps Matter": "Collectively, B Corps lead a growing global movement of people using business as a force for good. Through the power of their collective voice, one day all companies will compete to be best for the world, and society will enjoy a more shared and durable prosperity for all."

While I have a hard time believing even the most grizzled oil company chief executive disagrees with the sentiments that business should be a force for good, and that they should compete for what's best for the world, it is telling that the italicized phrases themselves are trademarked, suggesting that some lawyer made sure the company has laid claim to ... the concepts of using businesses to be good.

Because really, you can't solve the unpleasant byproducts of doing business merely by using business as a solution. A business' secondary responsibility may be to the environment, or to its workers, or to helping out the community where it resides. But its primary responsibility will always be earning a profit. Logistically, if it doesn't do that, it can't do the rest. And as long as it's the No. 1 goal, the others can always be compromised.