What it is like to operate a B- or Benefits Corporation

    By | Small Business

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    When Rick Hunter founded his St. Louis-based alternative energy firm Micro Grid Energy six years ago, he wanted to build a different kind of company. “I wanted to go beyond traditional definitions of corporate social responsibility,” said Hunter,

    He found his template from a new corporate model called a benefits corporation. Thirty-one states (with another six considering) now have passed legislation recognizing benefit corporations. Hundreds of those have been certified by a New York-based not for profit called the B Lab. Certified B Corps hold themselves to higher standards of accountability and transparency and embrace what they calls the “triple bottom line” of serving not only profits, but people and the planet.

    Hunter said certified B Corps take into account not only shareholders (investors), but also employees, customers, the communities in which they operate and their environmental footprint.

    B is for Business

    His company has succeeded in purely financial terms. “We’ve doubled our revenues to $20 million and expect to double them again by next year. We’ve gone from 10 to 50 employees. And in the last 18 months we’ve expanded from Missouri and Illinois to seven other national offices,” Hunter said.

    But Hunter said he was never motivated only by money. Micro Grid Energy helps businesses in the commercial and industrial sectors save money on energy bills through efficiency upgrades using solar and other clean forms of energy.

    He said any company could become a B Corp. “It comes down to how you want to run your business. We’re more people and planet friendly than many clean energy companies. From day one we offered larger company-type benefits for our employees and have given them time off to work with community causes. We put our time and revenue towards community benefits.We took on added debt instead of laying off employees,” he said.

    Hunter said B Corps report and measure their achievements. “As a company we donated $10 million solar energy programs to non-profits that cost them nothing. We ‘ve done educational programs and work in schools that align with our mission,” he said. “With global warming and climate change, there is an urgent need for companies to scale up to clean energy for new and existing buildings. And we’ve gotten additional business we wouldn’t have had otherwise because we are a B Corp.”

    Lew White, a community specialist with B-Labs, likened the B Corp certification to fair trade for coffee beans or the USDA stamp for organic milk. “It’s a third party certification to tell the world that you don’t just talk the talk, but you walk the walk with the standards we’ve put in place,” he said.

    White said there 1,546 B Corps in 130 different industries. Some, like Ben & Jerry’s Ice Cream, the online art sales company Etsy, and hot firms like Kickstarter and Patagonia, are among the largest and best known B Corps, but most are smaller businesses.

    He said every time a large company publicly announces B Corp certification, the B Lab is inundated with applications. “Our companies not only want to be the best in the world at what they do, but the best for the world,” he said.  

    B is for Benefits

    B-Corp Greystone Bakery of Yonkers, NY, is a commercial bakery that has operated since 1982 and is owned by the Greystone Foundation. Greystone is a social enterprise that has made open hiring a keystone of its operations, hiring ex-convicts and people without education or even strong English language skills opportunities to work.

    Greystone Marketing Coordinator Kerry Sesil said new hires start as apprentices and after passing the nine-month benchmark, they become eligible for promotions to supervisory, quality assurance and other skilled roles. Sesil said Greystone, which employs 75, sells its brownies to firms like Whole Foods and Ben & Jerry’s Ice Cream.

    Greystone’s other programs include nine community gardens, workforce development and an early childhood learning center and daycare program. Greystone became certified as a B Corp in 2012 “because we thought it would be a great opportunity to join a community seeking to achieve the triple bottom line of people, planet and profit by employing people many other companies wouldn’t, and supplying a wide array of social services. We’re working to mitigate our environment impact by installing solar panels, which account for 20% of our energy use. We recycle our waste to a pig farm and grow and give away fresh organic produce at our community gardens.”

    Chris Grewe, founder and CEO of New York City-based B Corp American Prison Data Services, studied high school dropouts. The former educational publisher learned that dropouts who don’t obtain high school diplomas are eight times more likely to become incarcerated. “If you get a high school equivalency while locked up and learn a job skill, you have a good chance of not returning to prison,” Grewe said “But if you’re released without a degree or job skill, you’re much more likely to become incarcerated again.”

    He found that many prisons are constrained by a lack of brick and mortar classrooms and shortages of teachers and many feel uncomfortable using digital technology because of safety and security fears. “So we created a secure system and curated the best online educational programs and made them available safely and inexpensively.  Our mission is to make correctional institutions safer and more efficient in spending taxpayer money. Ultimately, we hope to produce better outcomes and better behavior, lower rates of recidivism and higher rates of successful reentry,” he said.  “If they really rejoin society and pay taxes, they contribute to society and stay out of prison.”

    B is for Branding

    Grewe said APDS has been a B Corp from its inception. “With every business I’ve been involved in, I’ve sought to do well and do good. We expect to create a return in value for our shareholders, but we measure our success with making the world a better place and wanted shareholders who shared that vision.”

    He said being a certified B Corp facilitates trust with its customers, government-owned correctional agencies.  He said some prison services companies have justifiably earned bad reputations for lacking transparency.  “By identifying  ourselves as a B Corp, we differentiate ourselves from the ‘bad actors’ operating in this space, companies profiting on the backs of exploited people,” Grewe said.

    And he said his firm has enjoyed unforeseen benefits. “Some municipalities, such as San Francisco, are offering advantages to B Corps in contracting,” he said. “In addition, it’s made it easier for us to hire talented younger people. We hired a guy who left Google because he believed strongly in our mission.”

    Red Rabbit, a New York City-based food company that makes fresh, in-house prepared healthy lunches for school systems, became a B Corp two years ago. “We’ve always had a social mission,” explained Chief Operating Officer Jacki Walters Park. “Being a B Corps aligns perfectly with our mission. The more healthy lunches we make, the healthier the kids are in the communities we serve.”

    Park said the 100-employee staff of the 10-year-old company prepares 20,000 daily meals in its Harlem kitchen. “As a B Corp we’re part of a rising tide of socially committed companies we’re learning from every day.”

    Carlos Flores, business development manager for the San Rafael, Calif.-based B Corp, Healthy Building Science, said the B Corp logo is great for his company’s marketing and branding. “It’s a unique way to grow your business,” Flores said.

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