It's interesting to see that B Corps are really beginning to hit the big time, with firms such as Coutts & Co announcing that they too have obtained the certification.
As discussed in our earlier article about the legal implications of becoming a B Corp, many forward thinking businesses are recognising that the environment and social causes are increasingly important to new customers and clients.
Businesses are discovering that B Corps are a great way to (a) pledge to operate in a way that will make a tangible difference and (b) help fend off any accusations of 'greenwashing' from being levelled against them. On the investor side, where ESG is key, a B Corp is an easy sell.
That said, setting the objectives of the company so directors have to have regard to materially benefitting society and the environment as a whole, in addition to its shareholders is a significant decision.
As a director your duty is no longer to operate the company in a way that simply delivers shareholder value, instead you have to look to the environment and society. Undoubtedly commendable, and an excellent marketing tool, but on the other hand one might ask whether it is a strictly necessary move - companies that deliver value to shareholders in the long run will know that the environment and social factors are important and will be adjusting their business strategies accordingly anyway; look at all the major car manufacturers, or companies such as Apple which has pledged to go entirely carbon neutral. They're not B Corps. But if it looks like a duck, it probably is one.
There have yet to be any real issues with becoming a B Corp, and whilst they are seen as being a great way of developing the agenda, there is unlikely to be.
However, as B Corp values become more mainstream, it will be interesting to see how (and if) directors deal with competing pressures from members as regards projects that can, for example, produce high returns but prove difficult to tick the materially benefitting 'society as a whole' box. Or if directors find themselves considering whether they are obliged to accept lower takeover bids from 'better' companies. Today, lenders often require corporate guarantors to provide explicit reference to how the transaction delivers commercial benefit; we may yet see similar requirements from lenders to B Corps as the area develops.
Much of this is, of course, conjecture, and maybe the point is to make directors stop and think, but it is worth considering the long-term implications of making these changes.
What do you think?