For Many Founders, There’s No QuestionHigh-growth startups are investing months–even years–to certify their businesses as B Corps. Here’s why.

BY ALI DONALDSON, STAFF REPORTER@ALICDONALDSON

For Inc.

Photo Illustration: Inc.

The number of new B Corporations more than doubled in 2022, signifying a banner year for the stakeholder capitalist movement.

Last year, a record 2,047 companies got certified as B Corps, meaning they’ve met certain standards of social and environmental performance, accountability, and transparency. The latest class of socially conscious businesses, which includes Nespresso, fragrance brand Le Labo, Gen-Z darling Pura Vida Bracelets, and even the century-old maker of the little red wagon, Radio Flyer, brings the global total to 6,123 B Corps–the most since the nonprofit B Lab began authenticating companies nearly two decades ago.
Flexability CEO Nancy Geenen.

Flexability CEO Nancy Geenen.Photo: Courtesy subject

“B Corp takes a lot: It’s a commitment on behalf of the founder, owner, and leadership team,” says Nancy Geenen, founder and CEO of the Washington, D.C.-based equity and inclusion consulting firm Flexability, which got certified in 2021. “And it’s worth the effort.”

Activist consumer brands like Patagonia (Inc.’s 2022 Company of the Year), Allbirds, and Ben & Jerry’s were among the early adopters of the certification. Now B Corp membership, which boasts a 96 percent retention rate, includes the likes of a Yonkers bakery and a New Mexico ski resort. The logo–a black encircled B–has become increasingly prevalent on product packaging, company websites, and even storefronts.

The B Corp certification is rooted in stakeholder capitalism, in which companies make it their mission to weigh the impact of their activities on all stakeholders–employees, customers, the community, and the environment–rather than focus solely on shareholders and profits. The management theory has morphed into a movement over the past few years, such that founders and CEOs are now expected to be able to discuss more than just the health of their business. For executives who want to demonstrate their company’s social responsibility chops, the B Corp certification serves as a handy proxy.

“It’s a point of validation,” says Jake Danehy, co-founder and CEO of New York City-based apparel brand Fair Harbor, which recycles plastic bottles into beachwear and was certified in June 2022. “People can trust our brand because we do have that certification, which we worked hard for.”

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