Until North Carolina passes a Benefit Corporation Act, which was re-introduced in 2015, there is still a way for companies to be more committed to promoting the triple bottom line: becoming a Certified B Corporation through B Lab®.
It is a straightforward but demanding three-step process to become a Certified B Corporation ("B Corp"). First, a company must complete an impact assessment to prove it meets the performance requirements of B Corps. Second, the company must ensure that it has satisfied all legal requirements of certification. Finally, the company must make its commitment official by signing a B Corp Declaration of Interdependence and Term Sheet. Each of these steps is discussed in more depth in this article, and additional details can be found on B Lab's® website, https://www.bcorporation.net/become-a-b-corp/how-to-become-a-b-corp.
Step 1: The B Lab Impact Assessment
The first step to becoming a certified B Corp is to complete a detailed questionnaire that assesses your company's current commitment to social and environmental objectives. The impact assessment takes 1-3 hours to complete and focuses on factors such as corporate governance, worker compensation and demographics, and environmental impact. After completing the impact assessment, a staff member of B Lab® will conduct an assessment review with the company to go over the questions. If the company scores at least 80 out of 200 points, it must submit supporting documentation and complete a confidential disclosure questionnaire.
Step 2: Meet the Legal Requirements
A company then determines what legal requirements it must meet in order to properly conduct business as a B Corp. This may require amending governing documents in order to protect directors and officers from shareholder lawsuits and to hold them accountable to their new mission to promote public good. We recommend seeking legal advice to ensure that your company is in compliance with all applicable laws. If the company is a sole proprietorship with no corporate governance documents, it may skip this step and proceed to Step 3.
Step 3: B Corp Declaration of Interdependence and Term Sheet
The final step to certification is making it official. By signing the B Corp Declaration of Interdependence and Term Sheet, a company commits to a two-year certification period in which it will meet performance, transparency, and legal requirements for B Corp certification. To ensure compliance, B Lab® conducts random on-site reviews of 10% of certified B corporations every year. Companies must pay annual certification fees based on profits, ranging from annual fees of $500 for companies earning less than $1 million to $50,000 for companies earning over $1 billion.
More than 20,000 companies have used the B Lab® impact assessment and over 1200 are now certified B Corps, including well-known companies such as Patagonia, Inc. and New Belgium Brewing Co., Inc. North Carolina alone has over 30 certified B Corps. B Corps vary widely in kind, including restaurants, clothing and skin care companies, coffee producers, environmental firms, and even professional firms, such as real estate, consulting, architecture, software, and investment banking firms. Contact us today to discuss joining the ranks of these fantastic companies in their commitment to shareholder profits and public good!