There is a new measure of success for corporations which considers far more than profits and presents a rigorous scrutinization process. B Corp certification is gaining steam.
Headquartered in Pennsylvania, the aim is to, “Meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. B Corps are accelerating a global culture shift to redefine success in business and build a more inclusive and sustainable economy,” according to their mission statement.
Furthermore it says, “The B Corp community works toward reduced inequality, lower levels of poverty, a healthier environment, stronger communities, and the creation of more high quality jobs with dignity and purpose."
B Corp measures a company’s entire social and environmental performance and provides certification once a certain level of compliance is met.
It is now in 50 countries and 2,500 companies have become certified.
Social and environmental responsibility are qualities that are desired in a large percentage of the population, but why would a company subject itself to such scrutiny and potentially make profit-conscious investors nervous?
According to Ken Janzen, CEO of PenFinancial, Niagara's most recent B Corp certified company, "It’s all about transparency."
PenFinancial officially received certification Wednesday when Kasha Huk, representative from the Toronto office of B Corp, made the presentation.
"I think more and more people are caring about how business got to where they are, especially young people," said Janzen in an interview with the ThoroldNews.
"They want to know what's going into your product, how you're making your decisions, how you're making your money and how you approach social causes. If you're just price shopping, you might not care, but for those who are engaged in social responsibility, this would make a big difference," he argued.
Janzen explained that B Corp is a worldwide movement and it's also about providing a living wage and looking at how you treat your employees.
B Corp urges corporations to use profits and growth as a means to a greater end: positive impact for their employees, communities, and the environment.
"We didn’t get certification to put a plaque on the wall. We’re using this as a road map, finding areas we can do better at," suggested Janzen.
When asked about potential reduction in earnings by focusing on employees, social impact and the environment, Janzen said that B Corp certification makes sense for his company.
"We're not naive. I think it’s (B Corp certification) a way of doing business and more companies are embracing that. Credit unions were starting to improve communities and to help the people within them and this helps us get there. It’s not just about how much money can you make all the time," he argued.
He added, "It doesn’t mean that because you’re trying to be socially responsible that you can’t be successful. We need to be sustainable, viable, offer a strong product and service but also meeting these ends and we take that very seriously. If you believe in this, then come with us. If not, then maybe we're not the place for you. Our end game is if we can help the lives, and promote the community, this is a better way for us to exhibit this walk."
B Corp certification is a rigorous process that takes months to complete.
"There is a vetting process. An extensive application is submitted which is scored and there is a full audit in the answers you give them." explained Janzen. "You get scored on environmental and social responsibility, governance, how you’re investing your money, and how you back up your data. It’s quite sophisticated."
Janzen reiterated his use of the process as a roadmap. "We can get better. It's not just that we achieved it. We will be scored and re-certified at times. So our goal will be to improve our scores to show we’ve grown and improved."