Benefit corporations and Certified B Corporations are often, and understandably, confused. Both are sometimes called B Corps by mistake or as shorthand. They share much in common and have a few important differences.
Certified B Corporation is a certification conferred by the nonprofit B Lab. Benefit corporation is a legal status administered by the state. Benefit corporations do NOT need to be certified.
Certified B Corporations have been certified as having met a high standard of overall social and environmental performance, and as a result have access to a portfolio of services and support that benefit corporations do not.
What are the commonalities between benefit corporations and Certified B Corporations?
- Accountability: Directors of both are required to consider the effect of decisions not only on shareholders, but also on other stakeholders, such as workers, community, and the environment.
- Transparency: Both are required to publish publically a report assessing their overall social and environmental performance against a third party standard.
- B Lab: B Lab is the nonprofit organization that helped to develop the benefit corporation Model Legislation and works with the community of Certified B Corporations and others to marshal support for its passage. B Lab is also the nonprofit organization that certifies and supports Certified B Corporations.
What are the differences between benefit corporations and Certified B Corporations?
- Performance: Each Certified B Corporation has achieved a verified minimum score on the B Impact Asessment (80 points out 200 needed). While benefit corporations are required to publish an annual report assessing their overall social and environmental performance against a third party standard, that report is not required to be verified, certified, or audited by a third party standard organization.
- Support: Certified B Corporations have access to a portfolio of services and support from B Lab to help them with marketing, sales, raising money, saving money, learning from and doing business within the community of Certified B Corps.
Availability: Benefit corporation is a corporate status legally recognized by 20 states and the District of Columbia as of the start of 2013. Certified B Corporation is a certification available to businesses in all 50 states and around the world. As of 1/1/14 there are over 900 Certified B Corps in 60 different industires.