Last month, we published a press release announcing that Sunrise Banks had once again been recertified as a B Corporation. This was big news for the bank; for others, however, it might not have registered right away.
The B Corporation movement has been gaining momentum around the world and currently consists of more than 3,500 registered B Corporations in over 70 countries. Unfortunately, though, not everyone is familiar with these mission-driven organizations. Part of that is due to the fact that a shareholder-primacy model still reigns supreme in much of the developed world; B Corporations’ focus on more than just the bottom line is a relatively novel business model.
Our hope is to educate not only customers but also the rest of the banking world. So if you’re completely clueless when it comes to B Corporations, not to fear. Here’s a look at what B Corporations are and why they’re different.
What Are B Corporations?
Certified B Corporations are businesses that go above and beyond to promote corporate social responsibility, especially as it relates to improving the environment, ensuring transparency, improving access to high-quality jobs, and reducing economic inequality. Some well-known brands are B Corporations, including Patagonia and Ben & Jerry’s. B Corporations follow a set of values, as outlined in The B Corporation Declaration of Interdependence:
- That we must be the change we seek in the world.
- That all business ought to be conducted as if people and place mattered.
- That, through their products, practices, and profits, businesses should aspire to do no harm and benefit all.
- To do so requires that we act with the understanding that we are each dependent upon another and thus responsible for each other and future generations.
Despite their similar names, B Corporations are not the same as benefit corporations. B Corporations earn their distinction by undertaking a certification process administered by the nonprofit B Lab, while benefit corporations must be created with a specific legal structure, making it more like an LLC or a regular corporation.
According to the B Corporation website, there are 21 B Corporations in Minnesota.
How Do Businesses Become B Corporations?
In order to become a B Corporation, a business undergoes a vigorous, three-step certification process managed by B Lab, a nonprofit organization.
The first step measures the business’s performance through the B Impact Assessment (BIA), which focuses on how a business interacts with its workers, customers, community, and environment. Upon receiving the certification, B Corporations will be required to make the results of their B Impact Report available on bcorporation.net.
The second step is to meet specific legal requirements that ensure stakeholder (not just shareholder) considerations are included in the business’s governance structure. Depending on the business’s existing structure and location, these requirements might include updating the business’s Articles of Association or reincorporating as a benefit corporation.
The third step is verification and transparency, in which B Lab certifies the business’s results from the BIA using documentation submitted by the business. A business must score at least 80 points to be considered for B Corporation status. To maintain certification, B Corporations must also retake the BIA every three years and verify their new score.
Why Do Companies Become B Corporations?
B Corporations verify their commitment to doing business for good and holding themselves accountable. Other advantages include joining a network of like-minded B corporations and sharing best practices across industries. B Corporations can also leverage their status to attract talented new employees and establish thought leadership among their clients and peers.
An added benefit of adopting a B Corporation legal framework is that companies can protect their social responsibility missions and commitments, even during significant business changes like capital raises, new leadership, or potential sale and liquidity.
Sunrise Banks’ B Corporation status is only part of our commitment to corporate social responsibility. We’re also a Community Development Financial Institution (CDFI) and have been named a Best for the World nominee for seven consecutive years.
Learn more about how our organization promotes a positive social impact.