Today there is more awareness and attention to company behavioral impact on society and the environment. The level of suffering across communities and environments has increased due to poor company actions that prioritize profit over social consequences. With global consumers aware of these actions, changes are being made to reduce the negative influence of problematic companies.
Of the actions being introduced to reduce the negative impact on society and the environment, ethical investors are making mindful decisions on the types of companies to invest in. On the business level, companies are doing their part to improve their actions so that they may profit without negatively influencing society and the environment. Businesses are going about these approaches as Public Benefit Corporations, either through obtaining certification from the B Lab or the State government, whereby the business name is registered as Benefit Corporation.
Here, we’ll go over b corps and benefit corporations so that you can get a clearer picture of what businesses are doing to improve their efforts toward creating a greener world. Likewise, you’ll learn how ethical investors review these businesses to make investment decisions. Read on to learn more about the processes for b corps and benefit corporations below.
Why Are Companies Improving Their Sustainability Efforts?
Many companies are taking steps to improve their business operations and effects by striving to obtain certification from B Lab. This organization gives out certificates to companies that meet their sustainability requirements. Companies strive for this certification because consumers and investors like to see that businesses are supporting efforts that promote a positive impact on society.
What Are PBCs?
Public Benefit Corporations (PBCs) are businesses with legal goals that aim to create positive public benefits for society, communities, the environment, and the treatment of workers. These goals work alongside traditional business goals, such as obtaining profit and maximizing that profit throughout the process. The law requires PBCs to examine their actions on society and the environment periodically, and in some places, requires that they submit reports explaining how their actions support social and environmental improvement.
Differences And Similarities Of B Corps And Benefit Corporations
The most significant difference between b corps and benefit corporations is that PBCs make changes based on legal requirements, while B corps do not. Both b corps and benefit corporations utilize measures of improvement that encourage businesses to strive to achieve greater sustainability. B Corps conducts the B Lab’s Impact Assessment to examine and re-certify companies every three years. With this in place, businesses are more inclined to continue making changes to keep up with their certification and positive influence.
Gauge Where Companies Can Improve By Increasing Your Knowledge
While the guidelines for social, environmental, and economic improvement are not strictly defined, the measures in place to gauge company progress can still positively influence humankind and the world. By increasing your understanding of b corps and benefit corporations, you can use your best judgment to gauge where company behaviors are making a difference and where improvements are still needed.
