Sattie Clark, co-owner of Eleek, a B Corp in Portland.
Photo by Alexandra Shyshkina
Like many green companies, Elements Naturals, a Bend-based manufacturer of natural baby wipes, has pursued a variety of certifications verifying that its products are ecologically responsible. The ingredients for the plant-based wipes are approved by national organizations such as EcoCert and the Natural Products Association. Founded in 2007, Elements Natural is also the only baby-wipe manufacturer certified under the USDA Biopreferred program.
Still, co-founder and president Linda Naerheim wanted to do more. So last month, Elements Natural, which employs three people and is on track to gross $1 million next year, became one of about 30 companies in Oregon to be certified as a “benefit corporation,” a new class of corporation that is legally bound to consider social and environmental impacts in business decisions. More than a product stamp of approval, B Corp certification requires companies to actually amend their articles of incorporation to focus on “people and planet,” says Naerheim. “We are being held accountable,” she says.
Conceived in 2007 by B Lab, a Pennsylvania-based nonprofit, the B Corp community is growing rapidly nationwide.
A year ago, 350 companies had earned B Corp certification, says Jordan Chazin, a B Lab ratings associate. Today, there are 444. In Oregon, B Corp companies run the gamut and include Brightworks, a consulting firm; furniture maker The Joinery; and the Metropolitan Group, a marketing agency.
In a world rife with greenwashing, it’s easy to be suspicious of yet another corporate social and environmental responsibility initiative. B Corps aim to allay these concerns — and push the movement forward — by tweaking the legal structures that define the modern-day corporation, says Chazin. Under existing corporate law, company directors are charged with “honoring shareholders first and maximizing shareholder profit,” he explains. “If companies don’t do that, they can be sued.” B Corp companies, says Chazin, “make a fundamental change to legal governing documents” so they must consider other “stakeholders,” such as the environment, employees and charitable organizations.
The long-term goal is to incorporate benefit corporations into public policy. So far, five states have passed legislation creating a new filing status allowing entrepreneurs to codify social responsibility into their corporate mission. In Oregon, two such bills were introduced last session by Rep. Deborah Boone (D-Cannon Beach) and Sen. Jackie Dingfelder (D-Portland). Both died in committee but may be resuscitated in future sessions, says Andrea Cantu-Schomus, communications director for the Oregon Secretary of State.
What benefits do companies derive from B Corp status? “Underlying B Corps is the idea that we should be rewarding companies that provide social benefits,” says Sattie Clark, co-owner and director of marketing and sustainability of Eleek, a Portland design and manufacturing firm that was certified in 2009, in part because of the company’s recycling initiatives and health benefits paid to part-time employees. “Right now the field is tilted against us,” Clark says. “We pay our employees more, we pay more for materials.” But if benefit corporations become a special, state-recognized class, then policymakers can create incentives for socially responsible businesses, she says. “And that’s exactly what’s needed to get more businesses to go sustainable.”
Elements Natural has already reaped the benefits of certification, says Naerheim. “When you are looking for investors, you have to kiss a lot of frogs,” she says. The company’s B Corp status has not only attracted investors, it’s attracted “the right investors,” she says.
B Corp certification “gets at the heart of legal expansion of corporate responsibility,” says Chazin. But if the benefit corporation concept is helping evolve a new corporate ethos, creating and implementing those new legal structures is far from an exact science.
“The only thing we really know is what we are doing is not perfect,” Chazin says.