The more companies proclaim their “sustainability,” the harder it is for consumers to distinguish between what is real and what is just greenwashing. Fortunately for us, we have certifications which, some more extensively than others, help us validate responsible decision-making. This is the case of Certified B Corporations (or as we like to call it, the Queen “B”), which can now be found in nearly every sector of the economy including, of course, fashion.
As you might have seen in the news, Chloé has become the first luxury fashion brand in Europe to achieve a B Corp Certification. With this milestone, the brand joins a small but growing group to which, until now, only brands such as Patagonia and Allbirds have belonged.
But what does it mean to be a Certified B Corporation? Will Chloé be the kick-off for the rest of the luxury brands to join this VIP club? If you are uninitiated in the realm of B Corps, you are in the right place. Let’s dive in! Shall we?
B Corporations and the social enterprise movement
B Corporations are best understood in the context of the broader social enterprise movement. While the roots of this movement began a few decades ago, it wasn’t until the late 1990s and 2000s that social entrepreneurship started receiving widespread acceptance.
Social enterprises seek simultaneously to have a positive impact on society and a return a profit. Even though they are emerging in increasing numbers, this is not without obstacles, especially legal ones. And here is where B Lab and B Corps come into play: a creative attempt to help social enterprises to overcome some of these obstacles.
What is B Lab?
B Lab is a “non-profit organization that serves a global movement of people using business as a force for good.”[1] Its goal? “An inclusive, equitable and regenerative economic system for all people and the planet.”[2]
It is undoubtedly a very ambitious goal, but with the right plan we don’t see why it wouldn’t work out. So, here’s the plan:
- Verification of credible leaders in the business community (i.e., through Certified B Corps).
- Creation of a supportive infrastructure and incentives for others to follow their lead.
- Engagement of major institutions with the power to transform our economy.[3]
What does it mean to be a B Corporation?
Let’s be honest, government and non-profits alone cannot tackle society’s most challenging problems. Thus, the private sector is a key player in the process of accelerating a global culture shift to a more inclusive and sustainable economy.
B Corp status is a third-party certification administered by the non-profit B Lab for companies that attest that such a company operates in a socially and environmentally responsible manner. But make no mistake, B Corps are not the same as Benefit Corporations, since the latter is a legal structure for a business, like an LLC. Some companies are both Certified B Corps and Benefit Corporations. To date, the B Corp community includes over 4,000 members in 70 countries and 150 industries.[4]
According to B Lab, “Certified B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.”[5] In turn, this certification helps the company attract likeminded consumers and investors.
What makes the B Corp certification such an innovative one (the Queen “B”) is that it doesn’t certify a particular product or service. Instead, it “measures a company’s entire social and environmental performance,” through the B Impact Assessment. [6]
Who can be certified?
Any for-profit entity with at least a year of operations can seek B Corp certification. Even though there are no size thresholds, requirements and conditions vary between big and small companies. For example, public companies and their subsidiaries have extra transparency requirements and make their entire B Impact Assessment public.[7]
Certification requirements
To be certified, companies must comply with B Lab’s certification requirements, and once they meet all of them, they must pay an annual fee. The three primary requirements are:
- Completion of the B Impact Assessment (BIA): Companies must complete the BIA, a free, confidential platform that measures and manages a company’s positive impact on their workers, community, customers and environment. The BIA assesses the impact of both the company’s day-to-day operations and its business model over the prior 12 months.[8]
- Ccompliance with the legal requirement: Companies must amend its governing documents to incorporate considerations of all their stakeholders (employees, the community, and the environment, among others) and not just shareholders. This legal requirement gives legal protection to directors and officers to consider the mentioned interests when making decisions, while creating additional rights for shareholders to hold directors and officers accountable to consider these interests.[9]
- Verification and transparency: After completing the BIA, companies undergo a multi-step verification process to determine if they meet the 80-point bar for Certification. Companies also must meet certain transparency requirements.[10]
Is it worth it?
The rigorous process of data-gathering and auditing that the certification requires can cause companies to question whether being a Certified B Corp is worthwhile. Short answer: it 100% is!
As we said before, this certification is not product/service-specific as it measures a company’s operations and business model impact to its workers, community, environment, and customers. Therefore, being certified as a B Corp is a huge milestone, because it proves that a business is meeting the highest standards of verified performance.[11]
For Andrea Mallard, Athleta’s chief marketing officer, B Corp is a great “symbol that you want to be held accountable for how your actions impact everybody.”[12] This is not to mention the resources B Corp provides, from outlining best practices to creating a community of like-minded companies.[13]
Finally, being a B Corp can help founders embed their mission into a company so that it lasts even if ownership changes hands.[14]
Can the B Corporations Certification save the fashion industry?
Since announcing its plan to become a B Corp, Chloé has made commitments to being genuinely environmentally sustainable. Now, with such an accolade the brand’s CEO, Riccardo Bellini, explains that “beyond the fact that [they] are proud of it as a company, [they] also aim to inspire many others to join.”[15] Which makes us wonder, are we at the beginning of an avalanche of B Corps?
Well, it wouldn’t hurt! But, although a useful tool and a good start, the certification alone isn’t enough to fix the fashion industry’s environmental problems.[16] We know it is one of the most pollutant industries in the world, so we must redefine the role of fashion brands in society while making it meaningful and lasting. We need to tackle society’s greatest challenges by accelerating a culture shift where corporate responsibility becomes a requirement rather than an option.
However, until that, it’s worthwhile to familiarize with certifications such as Fair Trade, Cradle to Cradle, Positive Luxury, and B Corp, among others.
Do you think Chloé’s certification is the beginning of an avalanche of B Corporations? Do you think Certified B Corporations are worthwile? Let us know in the comments below!
Great post! It’s so inspiring to know that there are important companies showing themselves being part of a solution, coming up with ideas to change the concept of how we see fashion and rolling up their sleeves to make it work. We don’t know for sure if this is going to make a big impact in short terms but it definitely encourages other companies to join this cause. As we all already know, we don’t have a plan(et) B