The driving force behind a for-profit company is pretty obvious: To make a profit for its owners and shareholders. The driving force behind a nonprofit organization is to do good—for society and the public. But what about companies that are somewhere in between?
It’s possible for a company to provide products and services at a cost, while also advancing efforts focused on public good—such as social justice, environmental sustainability, or inclusivity.
With a bright spotlight on environmental, LGBTQ+, and racial issues in the news and at the forefront of consumer’s minds, an increased number of companies are speaking out and stepping up as leaders in the fight to protect our planet and our people.
Two options exist for companies in this pursuit of doing well while doing good: They can become a Public Benefit Corporation (PBC) or obtain a B Corp. Certificate.
There is a common misconception that PBCs and B Corps. are interchangeable terms. While they have some similarities, may overlap, and are not mutually exclusive, they are not actually the same thing.
Let’s take a deeper dive into PBCs and B Corps.
What are Public Benefit Corporations?
A PBC is a type of corporation for social entrepreneurs—individuals who create business models benefitting both shareholders and society. PBCs adopt a corporate form that is legally recognized.
Typically, the purpose of a PBC is stated in the company’s formation documents, as the structure of PBCs is designed to increase transparency and accountability regarding their social and environmental impact. PBCs are required to measure their social and environmental performance and share those findings in an annual benefit report to shareholders, the state, and the public.
Being a PBC is a legal status that can only be conferred in 35 states.
What are B Corps?
While a PBC is a legal incorporation, a B Corp. is an organization that has completed and passed the B Impact Assessment, the certification process necessary to obtain B Corp. status. The assessment is created by the nonprofit B Lab. This rigorous testing by third-party auditing services ensures that applicants are achieving top scores for balancing profit and purpose. A B Corp. designation has no legal framework—it is a certification only that must be re-issued every three years and includes a membership fee based on revenue.
In short, B Corps support the triple bottom line of profit, people, and planet. As a result of meeting these rigorous standards, B Corps are awarded certain benefits. They enjoy discounts to B Lab’s partners, including SalesForce and Intuit, and can also receive pro-bono legal services. Examples of B Corps include Patagonia, The Body Shop, Bombas, and Athleta.
Can a Company Achieve Both PBC and B Corp Status?
A company can be a PBC but not a B Corp. if it adopts the legal structure needed to be a PBC but hasn’t gone through the rigorous certification process to become a B Corp. However, B Lab does require certified B Corps follow the legal requirement to become a PBC in their state, if the designation exists; not all states have a PBC legal structure available.
A company can be both a PBC and a B Corp. if it legally changes its corporate status and also successfully completes the certification process. Sunrise Banks is both a PBC and a B Corp.
Sunrise Banks’ Commitment to Corporate and Environmental Sustainability
At Sunrise Banks, we have achieved both PBC and B Corp. status. Sunrise Banks’ holding company, University Financial Corp., GBC, became a Public Benefit Corporation on Jan. 2, 2015—the day the designation became legally available in Minnesota. Sunrise Banks has been a certified B Corporation since 2009. The bank’s most recent B Corp. recertification was gained in October 2020 and will be valid until October 2023.
These designations, as well as our other social impact affiliations, represent Sunrise’s continued pledge to corporate and environmental sustainability.