The B Corp Handbook, Second Edition | Ryan Honeyman

Summary of: The B Corp Handbook, Second Edition: How You Can Use Business as a Force for Good
By: Ryan Honeyman

Introduction

This summary of ‘The B Corp Handbook’ takes you through a riveting journey of understanding what it means to be a B Corp and how it can transform the way businesses function. The book sheds light on the process of obtaining B Corp certification, highlights its perks, and focuses on social and environmental responsibilities, hiring practices, employee ownership, worker engagement, organizational inclusivity, and more. By the end of this summary, you’ll be equipped with practical knowledge on becoming a B Corp and joining a global community of businesses who are striving to make a positive impact on the world.

B Corps and Benefit Corporations

B Corps are for-profit businesses that undergo a rigorous evaluation to determine if they are serving humanity by improving social and environmental well-being. They can be any legal entity, excluding nonprofits, and seek certification regardless of location or structure. In contrast, benefit corporations must be structured as such to ensure broader stakeholder governance and maintain B Corp status beyond initial certification. B Corps aim to build an economy centered on being the best for the world instead of pursuing being the best in the world.

Becoming a B Corp: A Game Changer for Your Business

B Corp certification is a rigorous process that assesses a business’s legal accountability, public transparency, and social and environmental responsibility. This certification enhances a business’s brand, attracts motivated employees, and sets it apart from the competition. Investors and banking institutions also show more confidence in certified B Corps. The certification appeals to consumers who want to support socially and environmentally responsible firms and generates media interest, increasing consumer loyalty and awareness. Becoming a B Corp also comes with the benefits of joining a global community of like-minded businesses, receiving marketing benefits, discounts on products and services, and mutual support. The process of certification and recertification helps track progress, identify areas for improvement, and motivates companies to meet B Corp standards. Overall, becoming a B Corp is a game changer for businesses that strive to make a positive impact in society and the environment.

A Step-by-Step Guide to Becoming a Certified B Corp

Becoming a Certified B Corp involves a rigorous process of scoring 80 out of 200 points across five categories in the B Impact Assessment. The assessment can be taken online for free, and there is no obligation to pursue certification. A rough first draft of the assessment takes about three hours to complete with a person who knows the business thoroughly. An internal champion can be designated to coordinate the gathering of necessary information or a B Impact Team or B Corp consultant can be hired. The assessment helps establish a baseline for a company’s social and environmental practices, identify areas for improvement, and prioritize steps to raise the score to 80 or above. Once the policies and procedures to raise the score are in place, they can be added to the assessment and submitted to B Lab. B Lab schedules a review call and requests documentation for up to 10 assessment responses, with revisions allowed. A score above 80 leads to further documentation for additional high point value questions. The process of obtaining certification and recertification requires significant time, effort, and resources but leads to sustained benefits.

Empowering Employees for Business Success

The key to a successful business lies in empowering the employees. This can be achieved by giving them an ownership stake, providing a living wage that attracts and retains skilled individuals, and following fair hiring practices that increase workforce diversity. Health care benefits and paid caregiver leave ensure a productive workforce. Flexible work policies benefit both the employees and the company by improving productivity and reducing burnout. Investing in professional development, offering retirement benefits, and providing access to affordable credit and emergency funds promotes employee engagement and leads to a profitable business.

Promoting Inclusivity and Impact in Business

A diverse leadership, commitment to inclusive practices, charitable giving, and local supplier partnerships can promote community impact in business.

To make a meaningful change in business, it’s essential to create a leadership team that supports diversity. To do this, it’s necessary to fill open positions from underrepresented or excluded groups. Furthermore, businesses should publicly commit to inclusive practices and track their progress toward greater diversity. Regular pay equity analyses should be performed to ensure that all employees are compensated fairly.

The ratio of pay between the highest and lowest paid full-time worker should also be calculated. Most B Corps set this ratio between 3:1 and 10:1. By establishing programs that provide work for at-risk youth, homeless persons, or the formerly incarcerated, businesses can also give back to the community. Incentives should be provided for employees to volunteer, and businesses should formalize and publicize their policy on charitable giving, especially if matching donations.

Purchasing from local suppliers, particularly those owned by minorities or women, can also benefit the community and lessen the environmental impact of businesses. Suppliers should be disclosed publicly to help hold businesses accountable. Supporting local independent banks or credit unions can ensure lending within the community and make funds available to a broader range of borrowers. Choosing a bank that is certified as a B Corp or is a member of the Global Alliance for Banking on Values is a great option for those looking to make a positive impact in their community.

Minimizing Environmental Impact

To reduce the harmful environmental impact of your business, it is important to reduce greenhouse gas emissions by switching to alternative energy, utilizing telework, and evaluating the product lifecycle from sourcing to disposal. Choosing eco-friendly suppliers, properly disposing of hazardous materials, and exploring work-from-home policies can further decrease your environmental footprint. Running a financially sound business is necessary, but prioritizing reducing environmental harm is equally essential.

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