Investing in B corps and Benefit organizations

B Corps and Benefit Corporations: Why They Are Important To Ethical Investors

Times are changing, with millennials driving a paradigm based on enduring values and sustainability. Entrepreneurs are solving world problems while maximizing their profits. These entrepreneurs consider their business responsibilities beyond their employees, customers, community, and environment.

The growth of B Corps is an example of organizational forms birthed from the paradigm, as investors, employees, and consumers demand social and environmental performance alongside the corporation’s main goals. Benefit corporations also function like B corps by considering the social and environmental impacts as part of their goals. B Corps confer legal status, while Benefit Corporations do not.

Read on to learn more about B Corps and Benefit corporations and why they are important to ethical investors.

investment opportunities for accredited investors

Force To Good

Investing in B corps and Benefit organizations means signing up as a force for doing good to society and the environment. B Corps-certified organizations meet high-level performance standards, transparency, and accountability on employee benefits, charitable giving, input materials, and supply chain practices. Through the power of collective voice, companies will start competing to be the best for the world, allowing society to enjoy shared and sustainable prosperity.

B corps and Benefit corporations are trying to prove that sustainability is not a business killer. The strict standards to becoming a B company further enhance their stability, making them attractive to investors. To qualify for certification, a company must meet the following conditions:

  • Demonstrate high environmental and social performance
  • Legally commit by changing their corporate structure to ensure accountability to all stakeholders
  • Exhibit transparency by accepting performance measurement against B Lab’s standards

Enjoy Non-financial Benefits

B corps and benefit corporations emerge as leaders in the economic systems change movement. These companies build trust with their communities, customers, suppliers, and employees. Their certification requires a verification process every three years, making B corps and benefit corporations good investment opportunities as their focus is continuous improvement, contributing to their long-term resilience.

Stand Out From The Greenwash Crowd

Greenwashing is a deception that an organization’s products, policies, or aims are environmentally friendly. B Corps and Benefit Corporations certification helps companies stand out from this deception and help consumers locate products and businesses that are truly environmentally and socially responsible. In addition, the B lab nominates and campaigns for the companies in their approval, enabling them to land top honors.

Investing in B corps and Benefit organizations

Even so, the increasing number of businesses pursuing B Corp certification has triggered accusations of B Lab Greenwashing and substituting good governance for accreditation. In response, B Lab took the criticisms and implemented reforms to improve accountability and transparency.  Further, B Lab required corporations recognizing the Benefits Corporations system to restructure and consider this a  logical step for companies that want to incorporate social responsibility in their DNA.

Become B Corps and Benefit Corporations

Location is key in becoming a Benefit corporation or B Corp. Some countries recognize Benefit corporations while others do not. If your state has limitations, you can adopt the B Corp as they catch up in implementing legal protection for balancing the shareholders’ interests. However, if you are in a state recognizing these structures, you can restructure your Benefit Corporation and attract investors.

Salman Zafar
Latest posts by Salman Zafar (see all)

Your Thoughts

This site uses Akismet to reduce spam. Learn how your comment data is processed.