Certified B Corporations and Benefit Corporations

by

Ke Cao, Joel Gehman

• LAST REVIEWED: 20 June 2023
• LAST MODIFIED: 26 May 2021
• DOI: 10.1093/obo/9780199846740-0203

Introduction

Over the past decade, Certified B Corporations and Benefit Corporations, commonly known as B Corps, have emerged as a global phenomenon. Both organizational forms are for-profit businesses. Whereas Certified B Corporations have been accredited for their environmental, social, and governance (ESG) practices, Benefit Corporations are a new legal form, currently available in thirty-eight states and jurisdictions in the United States (US) as well as in British Columbia (Canada), Colombia, Ecuador, and Italy. Both types were promulgated by B Lab, a US-based nonprofit organization. Founded in 2006 in the suburbs of Philadelphia, Pennsylvania, B Lab has sought to institutionalize business as a force for good. At present, certification is available to any business worldwide, and approximately 3,700 companies in seventy-four countries are currently certified. Prominent Certified B Corporations include Ben & Jerry’s, Danone North America, and Patagonia. Examples of Benefit Corporations include Data.World, Kickstarter, and Plum Organics. Overall, the B Corp movement’s radical aspiration to redefine business has garnered substantial attention from policymakers, media, businesses, nongovernmental organizations (NGOs), and academe. This article provides an overview of burgeoning scholarly work—ranging from general references and cutting-edge theoretical work to accumulating empirical findings and key pedagogical resources. A core focus is on enumerating the variety of theoretical perspectives that have been taken and the central research themes in extant work, including interdisciplinary publications. We close by discussing exemplary teaching materials and introducing other resources, such as the B Academics research community and available data sets for research.

General Overview

Cao, et al. 2018 provides a comprehensive review of B Lab’s initial founding, multifaceted strategy, and organizational progress, from its launch on July 5, 2006 through to approximately December 2016. Key milestones include the September 2006 release of the first version of the B Impact Assessment and the June 2007 introduction of the first cohort of nineteen Certified B Corporations. In April 2010, Maryland became the first jurisdiction to enact Benefit Corporation legislation. In September 2011, B Lab launched its impact investing platform at the Clinton Global Initiative. Expansion beyond the United States first occurred in February 2009 and has since grown to include companies in more than seventy countries. Honeyman 2014 provides interviews with and case studies about a broad mix of Certified B Corporations, including their self-reported motives for pursuing certification and insights on the certification process. Honeyman and Jana 2019 is a second edition work. In addition to expanded coverage of the B Corp movement, the authors examine B Lab’s efforts to build a more inclusive economy, including the “Inclusive Economy Challenge,” a program aimed at fostering greater equity, diversity, and inclusion (EDI) within the business sector. Marquis 2020a explores the rapid growth of companies choosing to certify as B Corps, both in the United States and internationally, and argues that B Corps will play an increasingly vital role in society. Gehman, et al. 2019 summarizes scholarly research related to B Corps through the end of 2018. The authors catalogue 226 scholarly articles and book chapters, with the first published research dating from 2009. Research initially focused on legal aspects of the Benefit Corporation legislation. Work in this area continues to be vibrant. Research from a general business and management perspective began in 2012 and has grown every year since. It is now the second-largest stream of research in this area. Finally, a small group of scholars have approached the topic of B Corps from an ethics perspective. This work appears to have peaked in 2016.

• Cao, Ke, Joel Gehman, and Matthew G. Grimes. “Standing Out and Fitting In: Charting the Emergence of Certified B Corporations by Industry and Region.” In Hybrid Ventures. Edited by Andrew C. Corbett and Jerome A. Katz, 1–38. Advances in Entrepreneurship, Firm Emergence and Growth 19. Bingley, UK: Emerald, 2018.

  DOI: 10.1108/S1074-754020170000019001

  Provides an overview of B Lab and its “business as a source for good” movement from 2006 to 2016. Analyzes the emergence of the B Corporation certification. Outlines a research agenda on hybrid ventures and highlights promising future research directions.

• Gehman, Joel, Matthew G. Grimes, and Ke Cao. “Why We Care about Certified B Corporations: From Valuing Growth to Certifying Values Practices.” Academy of Management Discoveries 5.1 (2019): 97–101.

  DOI: 10.5465/amd.2018.0074

  An incisive review of scholarly research on Certified B Corporations and Benefit Corporations published from 2009 to 2018.

• Honeyman, Ryan. The B Corp Handbook: How You Can Use Business as a Force for Good. San Francisco: Berrett-Koehler, 2014.

  The first edition of this popular handbook. Aimed primarily at practitioners looking to attain the B Corporation certification.

• Honeyman, Ryan, and Tiffany Jana. The B Corp Handbook: How You Can Use Business as a Force for Good. 2d ed. Oakland, CA: Berrett-Koehler, 2019.

  The second edition of this popular handbook. Updated with new interviews and case studies. Includes additional focus on how B Corporations engaged with B Lab’s “Inclusive Economy Challenge” regarding EDI practices.

• Marquis, Christopher. Better Business: How the B Corp Movement Is Remaking Capitalism. New Haven, CT: Yale University Press, 2020a.

  DOI: 10.2307/j.ctv15pjxg6

  This book provides an accessible look at the rapid growth of companies choosing to certify as B Corps, in the United States and beyond. Argues that B Corps will play an increasingly vital role in society.