Valley B Corps embrace society, shareholders
- Published on 10/18/2012 - 9:52 am
- Written by Ben Keller
Somewhere between a for-profit business and a charity organization exists a new kind of legal entity that regards social and environmental causes over revenue.
Since January, hundreds of companies across California have filed to become benefit corporations following a state law that allows corporations to create or revise their policies for the purposes of alleviating hunger, promoting recycling or pursuing some other public good.
Unlike a traditional business, the shareholders and directors of a benefit corporation come aboard with the understanding that economic gains are not the only measure of success, while any legal recourse is weighed against the company’s social and environmental objectives.
Eleven states have passed such legislation since 2010, but the concept actually started out several years before that with a small Pennsylvania nonprofit that wanted to make a difference in the world through the power of the free market.
Launched by three friends from Stanford University in 2007, B Lab has now certified more than 630 companies in 15 countries as “B Corps” using its 200-point impact assessment showing how they help their communities, workers and the environment.
Evergreen Lodge near the western border of Yosemite National Park was among the first to achieve the status. Buying the property as an 18-cabin seasonal motel in 2001, co-owners Lee Zimmerman and Brian Anderluh had the vision of running a youth employment program.
Now expanded to 90 cabins, the year-round resort provides valuable work experience for 18 to 20 young adults each year, each of which will stay on for as long as six months if they’re needed.
“They come from a situation of limited family support and income and we try to help them get traction to move into adulthood,” said Zimmerman. “Also they’re living in a healthy community different from the city environment they’re used to.”
Evergreen Lodge also scored some points on B Lab’s environmental assessment. Among its environmental practices is a greywater system added a few years ago that takes used water from laundry showers and dishwashers and recycles it for landscaping purposes.
Spending around $200,000 so far to install and perfect the system, Zimmerman said it has saved up to a million gallons of water a year from being pumped from the ground.
“It’s not a financial return that we’re seeking,” he said. “It’s just the right thing we’re doing.”
Employment services and environmental passions are also driving general contracting firm GC Green to go after its B Corp certification.
Expanding to Fresno later this year, the San Diego-based company got started in 2009 with a mission to train and place military veterans looking for work on green projects involving solar and wind power, energy efficiency, biofuels and water technology.
So far, the company has worked on more than a dozen projects. In the past year, around 1,300 veterans have been trained for positions, both with GC Green directly and through its partners like San Diego State University, San Diego Gas & Electric and various workforce investment boards throughout the state.
Founder and CEO Elizabeth Perez is herself a Navy vet deployed in the Middle East before launching the business — an experience that she said gives her a unique understanding of the veteran work ethic and qualifies GC Green as a veteran-owned business that many contractors need to attain government funding.
Being accredited by the U.S. Green Building Council and certified as energy auditors with the state’s Home Energy Rating System also helps its veterans clients get the skilled, high-paying jobs they’re after.
“I want to be able to attract people that care about the community and I want that to be contagious,” said Perez, a Fresno native.
While still at the beginning certification process, Perez said becoming a B Corp was really a no-brainer for GC Green.
“You’re still able to be profitable in business but you can also make a positive impact and this is what is shifting out here,” she said.
Along with the goals of creating a better society and environment comes a greater degree of accountability and transparency as both B Corps and benefit corporations are obligated to report regularly to shareholders on the impact of its altruistic policies.
However, unlike a benefit corporation, which merely takes advantage of a legal safe harbor, B Corps have access to employment listings, resource guides, software services and other perks for an annual fee based on the size of the company.
B Corps are also exposed to an entire subculture of investors who do nothing but support social responsible entrepreneurs with long-term plans to improve their communities or solve global problems.
Many of those investors can be found at giirs.org where scores of venture companies rely on B Lab’s in-depth assessment of businesses to make financing decisions. So far, more than 7,000 companies have used the assessment just to see where they stand in measures of social consciousness.
According to B Lab spokesperson Katie Kerr, the impact goes way beyond just philanthropy as consumers are increasingly drawn to the good intentions of a business that uses its ingenuity for something other than economic gain.
“It’s a timing thing. People are finally realizing that short term capitalism isn't working and this idea of profit is changing,” Kerr said. “You can’t have a strong company if there’s no one in your community supporting you and you can’t have a successful company if your employees feel like slaves.”
B Lab is now looking to take the concept of responsible capitalism to emerging markets in Asia, Africa, Europe and South America. At last month’s Clinton Global Initiative annual meeting in New York, B Lab announced its commitment to certify 100 B Corporations in South America in 2013 by partnering with Russian investment company Sistema.