B Corporations

B Corporations is an initiative by B Labs, a “nonprofit organization that serves a global movement of people using business as a force for good (TM)” (ref).

I wrote about a similar UK-only initiative recently, but there’s an article about this organisation in April 2016’s CIMA FM magazine, which I just read, and I wanted to get a post down about it asap.

Said article quotes co-founder Andrew Kassoy: “B Corp certification is to business what Fairtrade is to coffee”. If they are unlucky, the comparison may well become appropriate. Without going into too much detail about the issues facing Fairtrade certification, I want to use it as an example of the hurdles facing B Labs.

– Self perpetuation. Both Fairtrade and B Labs use money from performing audits and offering guidance to current and potential certificated organisations to cover their running costs. Therefore it is not in their financial interest to investigate, understand and disclose factors that threaten this certification, e.g. if there were a drop in demand for goods bearing the symbol in times of recession (or following controversies with the certification body).

– Self undermining. These organisations aim to exhalt organisations that bring benefits to local communities, the environment and wider society, in order to lead by example and turn good practice into a cause for profits. But, by taking (sometimes hefty) fees for doing so, they hamper those organisations’ ability to deliver those benefits, and the financial incentive of profits.

– Re-intermediation. Often, improving impact on connected stakeholders involves cutting out the middle man, as it allows a higher price to be paid to suppliers, protects customers against higher prices and usually improves transparency RE: ethical practices and integrity. But, by controlling who gets the seal of approval and laying administration burden on participants, certificating bodies may actually cause the number steps in the process (if not the actual number of middle men) to increase.

Overall, I think schemes like this are a good thing – certainly in the absence of legal criteria of such practices, it is a way for consumers to know that they’re buying “not awful” products. In the future, I’d hope to see it superseded by clever, informed consumers demanding ethical practices from individual organisations, without needing to see a pretty stamp to know whether to cheer or boo. I can only dream.