Why We Became B Corp Certified
I got my MBA in the 1990s, back when were taught to bow down to Milton Friedman, the Nobel Prize-winning economist and advocate for free-market capitalism. The central idea is that capitalism is good and that businesses—unregulated by government restrictions—can unlock maximum human potential and innovation for the greater good. As Milton Friedman said, "There is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by the free-enterprise system."
Starting in the 1970s and continuing over the next few decades, the government was deregulating businesses across many industries. In business school, we saw so much opportunity in the banking and finance world, the airline industry, the telecom industry, the tech business! Our business school Dean, Professor Harry Davis, put on sunglasses when he first greeted our class of 1994, shouting, "your future's so bright, I gotta wear shades!"
He was right; we were optimistic about our future, and for good reason. Capitalism has brought about significant advances in our society. As Matthew Wilburn King wrote in this BBC article, Why the Next Stage of Capitalism is Coming, "Capitalism has fueled the industrial, technological, and green revolutions...It has lifted innumerable people out of poverty over the last two centuries, significantly increased standards of living, and resulted in innovations that have radically improved human well-being."
But we didn't know what we didn't know (and still don't, obviously). We didn't know much about climate change, forever chemicals, plastics in the ocean, and the pollution that would cause many health issues, particularly in poorer areas. We didn't all have computers in our pockets that could answer any question any time, anywhere (accurately or not). Social media had not yet amplified everyone's outrage.
I first became aware of the damage businesses were doing to our environment while I worked on Capitol Hill after graduating from college. I handled legislative issues on energy and the environment. It was a crash course in air pollution, water pollution, the non-profits that care about those things, and the debated legislation that was supposed to help.
But it wasn't until I read Paul Hawken's The Ecology of Commerce about a decade later that I realized businesses were a significant part of the problem. The fundamental reliance upon growth in earnings per share forces business leaders to make decisions that might be better for shareholders in the short term but not beneficial for anyone in the long run. Today's politics reflect a more divisive attitude towards businesses; many politicians, journalists, and influencers are part of an anti-capitalist movement. The fundamental principle of businesses--growth for the sake of growth--is morally devoid of meaning. So, what's a conscious capitalist like me to do?
To help resolve my cognitive dissonance, I decided to immerse myself in the sustainability world. As a sustainability consultant, I helped businesses do better financially by doing better with natural resources. I became a LEED Accredited Professional, and LEED Certified several million square feet of commercial and residential property. But LEED was only a little better than all other buildings. The more I worked with architects and building owners, the more I realized that buildings could actually serve communities. For example, the home of Kate and Mark Hanson (whose house I wrote about and featured here) produces more electricity than it consumes (even with their two electric cars), so they return energy to the grid. Their lot absorbs more stormwater runoff than it produces, helping the entire neighborhood and the city's water department manage heavy rainfalls.
That got me thinking: if a building can be of service to its community, couldn't an entire business? And why wouldn't it? Turns out I'm not alone: companies and brands have been stepping up to the challenge, with the outdoor retailer Patagonia as the shining star. (Thank you, Yvon Chouinard!)
Now, with Project Hive Pet Company, my husband and I get to author our own decisions on how we run our business.
We started Project Hive Pet Company to make a difference in the world. Sure, we love pets and bringing joy to pets and their parents by making great products, but we have a more significant reason for being that has to do with helping save the planet. Our mission is to save the bees. We do this by partnering with non-profits that plant healthy wildflower habitat on wide swaths of land.
When we formed the company, we decided to incorporate it as a public benefit company with the goal of becoming a Certified B Corp.
What is a Public Benefit Company?
A public benefit company is a for-profit organization that can pursue a public benefit purpose while also engaging in profit-generating activities. It means that the company exists not just to provide a return to shareholders, but to benefit all stakeholders, like employees, the community, and the environment.
A public benefit company is a legal formation that allows "companies to embed corporate social responsibility and sustainability in their corporate DNA," according to this article. It is seen as a natural evolution for businesses to respond to criticism and address the triple bottom line (people, planet, profits). According to a 2021 GreenBiz article, "Since Maryland became the first in 2010, roughly 40 states have enacted some form of benefit corporation legislation, and around 1,200 U.S. companies have incorporated as benefit corporations or PBCs."
So, almost any company become a public benefit company simply through their legal formation. Becoming a certified B Corp is a completely different thing.
What is a Certified B Corp?
The official B Corp Certification began in 2006 with the formation of the non-profit B Lab, "with the idea that a different kind of economy was not only possible, but necessary—and that business could lead the way towards a new, stakeholder-driven model." As B Lab describes in its brand guidelines, "Certified B Corporations™ (B Corps™) are for-profit companies that use the power of business to build a more inclusive and sustainable economy."
B Corps might just be the savior of capitalism. Why? B Lab explains, "B Lab creates standards, policies, tools, and programs that shift the behavior, culture, and structural underpinnings of capitalism." It's not greenwashing; it's a movement. And it's growing: over 4,000 companies have been certified, spanning 74 countries and over 150 industries.
Why are businesses becoming B Corp Certified?
According to a 2016 article in Harvard Business Review, "The qualitative evidence, gathered from firms' B corporation application materials, revealed that certifying firms believed 'the major crises of our time are a result of the way we conduct business,' and they became a B Corporation to 'join the movement of creating a new economy with a new set of rules' and 'redefine the way people perceive success in the business world.'"
How do businesses become B Corp Certified?
Becoming a Certified B Corp is a process that requires transparency, authenticity, and some grit! It starts with the B Impact Assessment. A company needs to earn at least 80 points in over 200 questions across five categories: Governance, Workers, Community, Environment, and Customers. Each question awards a certain number of points, even down to as few as 0.10 points. The biggest point earner? Being incorporated as a public benefit company, which, by itself, earns ten points.
We found going through the B Impact Assessment to be beneficial to our internal processes, as it required us to spend more time on things that a start-up business might not normally do. For example, we documented our Supplier Code of Conduct, enhanced our Employee Handbook, and conducted a Carbon Footprint analysis.
Once the B Impact Assessment is complete, B Lab assigns an evaluator who verifies the information over several months. Back-up data and documentation are required, and that's part of what makes it a credible certification: it's independently, third-party verified.
Is Project Hive Pet Company B Corp Certified?
Since we launched in 2021, we have been actively pursuing B Corp Certification. It has been our goal to join this group of progressive organizations committed to serving all stakeholders—customers, employees, suppliers, the community, the environment, and shareholders—in all business decisions.
So, we are buzzing with excitement to announce that as of December 15, 2022, we are officially B Corp Certified! We are honored and humbled to join this community of organizations going beyond "business as usual" and embracing the movement. We think businesses can (and should) be a force for good. Join us!