B Corp Basics: What It Is, And Who Does It Best

If you’ve ever walked around a LEED-certified building, it soon becomes clear that they aren’t your average energy-hogging structures. Any number of features might tip you off to that fact, from the low-flow fixtures to the use of passive lighting to the solar panels.

But when it comes to corporate America, being able to determine if a company is as socially responsible as its marketing materials claim is far more difficult. That’s where B Lab comes in. The nonprofit has developed a framework in which companies can receive a special B Corporation certification. The “B” stands for “benefit” and the founders liken it to LEED-certification for businesses.

image via B Lab

While the concept of companies having a grander purpose beyond raking in maximum profits isn’t anything new, the formal certification process and third-party assessment for B Corps came about just six years ago. Already, sustainable outdoor retailer Patagonia and eco-conscious soap maker Method have joined the ranks of well-known certified B Corps.

Development of the certification was conceptualized when B Lab Co-Founders Andrew Kassoy, Jay Coen Gilbert and Bart Houlahan joined forces in 2006. With their backgrounds as entrepreneurs (Jay and Bart founded a $250 million basketball and apparel business) and investors (Andrew was a private equity investor) the three set out to change the way the corporate world functioned.

“We were realizing that there were some structural impediments in the marketplace and what B Lab should be doing is creating a new market infrastructure,” Kassoy said.

Kristy Hessman is a writer and native Oregonian who currently resides in California. Before starting her own company, she worked as a reporter covering business and politics for daily newspapers and The Associated Press.