Limitations of CSR certifications

Consumers and businesses admire the B Corp movement’s idea of “Business for good” as an alternative to today’s capitalist corporate approaches to shareholder primacy. The movement promotes sustainable and equitable business practices to “benefit all people, communities, and the planet” (B Lab Global Site, n.d.). B Corp was started in the early 2000s by three Stanford University graduates. The founders, Jay Coen Gilbert, Bart Houlahan, and Andrew Kassoy, questioned the relentless pursuit of profits that they witnessed in the businesses where they worked. In response, the trio set out to change how businesses operate by establishing the B Corp certification. Since then, over 6,300 companies in 85 countries have become B Corp certified, and 2,000 of those companies are in the U.S. and Canada (B Lab U.S. & Canada, n.d.). This model is considered by some to be the antidote to traditional ways of doing business and a possible revised form of capitalism. 

Businesses that become certified are celebrated. People who work for B Corp companies express pride in their association with the B Corp mission. But there is also suspicion about the effectiveness of the certification and its impact on changing how business is performed. My research investigates these competing realities. Using ethnographic research and theory, I seek to understand the experiences of people who work for B Corp-certified companies and examine how the practices required by B Corp certification impact the cultures and employees of businesses. I am curious about the dissonance between what B Corp-certified companies say they do and what they actually do. This paper begins to explore these contradictions through the analysis of preliminary research data. 

Over the course of spring 2023, in preparation for my fieldwork, I collected data through participant observation and conversations. My access to the B Corp community in Colorado is a result of my professional experience. I’ve spent over a decade in business in the Denver and Boulder areas and have personal contacts in the B Corp community in Colorado who have connected me to research subjects. Leveraging my network, I talked to more than 25 people and participated in and observed three B Corp community events. The conversations I have had and the people that I’ve observed are all members of the B Corp community and include the three core groups of people that make up the community. B Lab and its employees define how B Corp companies will be measured and verify the B Impact Assessments. B Corp employees and executives are the people who work for B Corp-certified companies. And, B Local and the volunteers who run it, are responsible for bringing the B Corp community together through events. 

What I found is that businesses that are trying to operate outside of the norms of current corporate U.S. standards are likely to experience friction. As someone who spent over 10 years in business as an executive and entrepreneur, I know that the claims and requirements that B Lab imposes on B Corps don’t have a straight line to implementation. There is resistance when B Corp standards are instituted in corporations that still have to operate in accordance with U.S. corporate regulations that favor neoliberal ideologies. The U.S. financial and legal systems have established operating rules for corporate America that incentivize growth and consumption, and favor founders, executives, and boards. The idea that business can be structured in a way that de-prioritizes traditional business incentives is an alluring one but doesn’t seem realistic in our current conditions. Economic forces in the U.S. still reinforce scarcity and isolation and that works against new business models that propose innovative approaches. 

B Corp-certified companies are rewarded for business practices such as shared ownership or generous employee benefits, but these practices aren’t always easy to adopt. For example, it’s harder to set up a business as a cooperative than it is to establish it as an S or C corp. In fact, the cooperative entity option isn’t available in all states. When it comes to financing, the “business for good” approach becomes especially sticky. Much of the funding for businesses comes from Venture Capital or Private Equity. These two funding sources exist on a short-term timeline and operate to make money for their investors. Therefore, it becomes difficult to get financing from investors. This begs the question, if a B Corp company is committed to not prioritizing profits how does it fund its work? Another difficulty is simply the cost of doing good. The practices required for certification are expensive, especially for small businesses. Not only do companies have to pay a yearly fee to be a B Corp, but it also takes significant resources to get certified in the first place. Additionally, benefits, like extended parental leave or generous healthcare, are B Corp standards, but they aren’t realistic for small businesses that can’t afford them. For the businesses that operate in the U.S. where the private sector is responsible for public goods like healthcare, these benefits are important signals of doing good but are out of reach for many companies. 

I’m interested in these tensions. How do businesses shift their priorities from profit to include communities and the environment while still operating in a system whose conditions put profit first? Is the B Corp project even possible? The concepts of “business” and “good” are contradictory, but these frictions are where belief and action come to life. My work seeks to tease out the contradictions of the B Corp movement to see how they are revealed in the context of today’s B Corp movement. 

The Case for a Revised Capitalism 

I closed my business during the pandemic. My marketing agency was growing, we were hiring, and the business had a promising set of new clients, but I was burned out. I’d considered closing my business and leaving my marketing career since the beginning of the pandemic, but instead of closing in 2020, when the market tanked and businesses frantically reacted, I took a pay cut and worked to keep things afloat. Providing my employees with the security of a job through the pandemic was my motivation. After a year, my energy waned. The problems of the world consumed my mind. Income inequality and environmental degradation are caused by the very businesses I was helping to grow. I had rallied all the energy I could muster and discussions about how to get more marketing leads or launch a new software platform felt increasingly pointless. For a while, I silenced the internal conflict I felt when, for instance, I was expected to celebrate the $10 million fundraising round closed by a client, while considering how that money could be used for things that might change hundreds of lives, not just one CEO’s life. Eventually, the incongruity of how I spent my days and what I cared about got too hard to manage. In 2021, after five years of running the agency, I ended contracts with clients and helped my employees find new jobs. 

Since I closed my business, the economy has experienced upheaval. In 2021, after the pandemic, the “great resignation” (“Great Resignation,” 2023) occurred, when the jobs market went from disastrous to overflowing with opportunity and it looked like the tides had shifted in favor of workers. Then, in 2022, stories of huge layoffs (Vedantam, 2023) consumed the news and the power was back in the hands of corporations. And, now bank failures and a crashing stock market have everyone nervous (Russell & Zhang, 2023). These precarities impact workers the most. Right now, workers express feeling the worst about their finances (With Car Repossessions and Home Foreclosures Rising, Some Americans Are Living on a Financial Cliff, n.d.). And amidst all of the worry and pain that people are experiencing, corporations are still reporting record profits. It turns out that greed is potentially the cause of the inflation that is driving the interest rate hikes the Fed is imposing, making everything less affordable and life even more uncertain (Why Is Inflation So Sticky? It Could Be Corporate Profits - WSJ, n.d.). It feels like we’re in new economic territory. The forces of the free market have been left mostly unchecked for decades and we find ourselves in a distorted economy, society, and democracy. There are several groups working on solutions (Foroohar, 2023) and the B Corp movement claims to be one of them. On the “About the Movement” page on the B Corp website, it states, “We're building the B Corp movement to change our economic system - and to do so, we must change the rules of the game. B Lab mobilizes the B Corp community towards collective action to address society's critical challenges” (Building the Movement, n.d.). This is an ambitious goal and some, including myself, question if it’s possible to use business to solve society’s problems. 

I’ve been aware of the B Corp movement for a decade. Colorado has a high concentration of B Corp-certified companies. Many Colorado businesses were early adopters of the B Corp certification, including the co-working space where I rented a desk in 2012. When the space became certified there was a celebration and the symbol of certification was displayed around the space and on their website. As a member, I didn’t experience any material differences as a result of the certification. Similarly, when I led my marketing agency, a few of our clients were B Corp certified, yet, the only reason I knew of their certification was because they wanted it promoted in their marketing materials. I have long been suspicious of the efficacy of the B Corp movement’s claims and I’ve found that I’m not alone. When I decided to focus my research on B Corp companies, two friends said, some version of, “I can't wait to see what you find...many B Corps are still bad places to work.” As I’ve embarked on my preliminary research I’ve encountered people who are critical of the movement and I’ve found others who truly believe in its possibilities and have had great experiences working for B Corp companies. That’s what makes the community so interesting; it’s the most distinct approach to a revised version of capitalism with aims to restructure corporate priorities for good, yet it seems too good to be true. Some say it is, but others interpret the movement’s efforts as genuine and I can see why, its promise is powerful. 

Business for good is an attractive concept. Yet, as Ann Stoler shows us, concepts are often understood as universal when they are not. “The challenge is both to discern the work we do with concepts and the work that concepts may explicitly or inadvertently exert on us” (Stoler, 2016). Through my preliminary research, I’ve tried to discern the unexamined parts of “business for good” to find out if a revised capitalism is even possible. My intentions could be interpreted as activism, an effort to “trouble established frameworks” (Fortun, 2012). It’s not that I want to find out what’s wrong with the B Corp movement, but instead, I want it to be doing what it says it's doing. I believe that a revised capitalism or complete overhaul of our economic system is required if we’re going to deal with the big challenges of our time—inequality and climate change. Critics have pointed to a lack of government oversight and a corporate logic that prioritizes shareholder profitability and limitless growth as key factors contributing to these problems. Certified B Corps consider themselves to be part of the solution. 

There are many academics studying B Corp-certified companies. In fact, there is a dedicated membership group—B Academics (Home, n.d.). However, most of the research I’ve encountered is produced by business students and researchers who take a positivist approach to the topic. An ethnographic research approach brings a new perspective to the study of the B Corp movement. The looping and hesitations of ethnography that Fortun highlights "produce important openings for the kind of ethnographic encounter I want to help stage, encounters that would trouble established frameworks, facilitating slippage, so that new idioms and questions can emerge" (2012). The B Corp movement has power and I want that power to be truly used for the good of workers and the environment, yet, in order for that to happen, I sense that research needs to be performed in the spirit of Tsing’s “hair in the flour” (Friction, 2004). I take inspiration from the scholars that we’ve studied and hope to reveal new insights and questions by looking for “weaknesses, confusion, and gaps in business as usual” (Friction, 2004) to get us closer to a revised capitalism that truly is built to benefit people and the planet. 

The Power in Business for Good 

The B Corp movement is global. There are B Corp-certified companies in 85 countries and a network of B Lab organizations that work together to promote and certify companies all over the world. This group of organizations is known as the B Global Network and is said to “grow, engage, and mobilize their regional B Corp communities, ecosystems, and partnerships, and in turn, reshape their local economies to prioritize people and the planet.” The claim is that the network of B Labs brings their “global theory of change to life” (B Lab Global Network, n.d.) to change policy, advocate for business as a force for good, and alter the behavior of business. The global adoption of B Corp's ways of business is powered by the possibility that business can be a force for good. The B Corp movement understands its methods and the possible future it claims to work toward to be a social fact and the B Lab organization leverages expertise and measurement, through its certification to legitimate and make its work legible. 

The people who work at B Lab define the way that the B Corp system works. They create and maintain a standard that companies and the people that run them work hard to meet and once certified, companies govern themselves by the standards. The B Impact Assessment is the tool that B Lab has established to certify and standardize membership for B Corps. The certification is an arduous exercise—the assessment and the resulting certification can take a year or more to complete and determines if the business qualifies to be a B Corp and if so, how the business ranks across five areas—Governance, Workers, Environment, Community, and Customers. The highest score that a company can achieve is 200. A score of 80 is required in order to be considered B Corp certified. Representatives from within the certifying business work directly with B Lab analysts to prove that the work they are doing is worthy of the B Corp stamp of approval. The proof is often in the form of documentation that shows that the business has the policies and procedures in place that it claims to. B Lab dictates the terms of membership. The organization defines all of the standards and methods of the certification. The companies that want to be or are certified manage their business in accordance with these terms. 

At an event I attended in March, I had the chance to talk with members of the community. I struck up a conversation with a woman from a recruiting agency. Her company had just gone through the process of certifying to become a B Corp. I asked her why her company had decided to become a B Corp and she used a lot of the language I’d seen on the B Lab website, sharing that it was important to her and the company that the work they were doing was for good and that they operate in an ethical way. This is an experience I’ve had with other employees of B Corp-certified companies—the reasons for becoming a B Corp aren’t specific. Not everyone, but some people repeat the promotional language of B Lab. There is a reliance on the abstract ideas of “business for good” that the governing body of the movement promotes, without an interrogation into the impact of the actions endorsed by B Lab. For instance, many of the employees I talked to, who are proud of their association with the B Corp movement, don’t know what the certification requires. This means that they don’t have knowledge of how the companies they work for are operating any better or worse than non-B Corp-certified companies. Many of the people I’ve encountered at the B Corp community events, seem genuinely enthusiastic about the prospect of being a B Corp and the work that the B Corp movement is doing. Yet many of them don’t have a concrete idea of what that work is and how or if it actually is better for the people and the planet. 

I recently attended a lunch, hosted by B Local Colorado. I sat next to the organizer of the event and was surprised to find that this person, someone who is deeply tied to the community and an advocate for the movement, didn’t know what the B Impact Standards are. This person is a volunteer who spends his time bringing people together to strengthen and promote the B Corp movement and isn’t informed on what the requirements are to become B Corp certified. I don’t say this to shame the volunteer, he is in the majority, instead, I hope to highlight how powerful the concept of “business for good” is and its ability to obscure the details of how its revised version of capitalism works. When a company gets certified, the B Impact Assessment is usually managed by a small group of employees and it’s up to those employees to determine how much detail they want to communicate to the rest of the company. The people involved are usually executives and people in the human resources or social impact departments. Once certified, companies treat their status as a huge accomplishment. Celebrations are held, the B Corp Certified logo is displayed, and a sense of pride is exhibited. In my experience, there isn’t a lot of room for questioning what the certification truly means, especially if those questions come from workers. As Foucault says, “Each certitude is only sure because of the support offered by unexplored ground” (1997). It’s hard to contradict the ‘good’ that the company is doing. Not many people want to be critics of social and environmental impact efforts. 

The fact that so few people that I’ve encountered in the B Corp community actually understand the mechanics of the certification and yet still believe in the promise, tells me that there is a lot of unexplored ground in the movement. I believe that the clues to the unexamined areas of the B Corp movement lie in the contradictions that I’ve witnessed in my preliminary research. 

The Contradictions of Being Best for the World 

Every year, B Lab recognizes the top-performing B Corps creating great impact through their businesses. These businesses are named “Best for the World” and given awards to recognize their excellence in their impact area—Governance, Workers, Environment, Community, and Customers. One of the B Local events I attended was a celebration of the B Corp organizations that had been given the 2022 award for their impact on the environment. It was held at the offices of one of the winners. The gathering was small. There were about 25 people in attendance. After collecting our snacks and drinks everyone was invited into a conference room to listen to the CEOs of the winning organizations speak. One of the awardees is a well-known sustainable skincare brand. The CEO, a woman, sat at the head of the conference table and was the first to speak during the informal program. She shared the history of her business and her experience working to make their product and packaging more sustainable. One of the highlights that she shared is that she and her team found a way to make their packaging fully compostable. Apparently, they are one of the first companies in the skincare and beauty sector to accomplish this. She shared how important it is to her that, as a business owner, she makes business decisions that prioritize the future of the planet. The room celebrated her with applause. Then came the questions. The first question was, “What is the most important lesson you’ve learned about running a business?” Her answer was, “Cash is king.” Everyone laughed. I cringed. The disparity between the founders’ purpose and the capitalist realities revealed in the statement “cash is king” was disappointing. I guess, I had hoped that this founder, someone who was being awarded Best for the World for her work establishing a business that prioritized the environment, would have found a way to move beyond capitalist ideologies. Instead, I was reminded of what Stoler told us in her writing on topics of occlusion and colonialism, “... the task is to recognize the force field of colonialism’s conceptual web in which many more of us than often acknowledged remain entangled” (Stoler, 2016). This is the B Corp movement. The virtuous practices that we celebrate are still practices tethered to capitalist methods. 

In my early investigations of B Corp companies, it has become clear that the people involved in the movement are dealing with a condition of double binds. Karen Fortun describes double binds as “situations that create dual obligations that are related, are of equal value, and yet are incongruent with one another” (Fortun, 2001). B Corps are asked to do two contradictory things at once—make money and improve the world. The phrase “cash is king” indicates that even in a situation where a CEO is trying to operate in a way that prioritizes the natural world, the need to prioritize capital is a requirement. Can companies that have to operate in the capital-first model really do good? 

I talked to a lawyer about this contradiction. The lawyer works exclusively with businesses that fall into categories of shared ownership or B Corp-certified status. I asked him about the friction that his clients experience between traditional approaches to business and methods like those that B Corp companies claim. He said that because businesses in the U.S. are still governed by the traditional system of law, there can often be legal risks to operating a more virtuous business. For example, a company can be “too generous” with things like paid time off, and these generosities can be a risk if things go awry with an employee. He explained, “There are still underperformers in the workforce and it is difficult to know how to deal with them in a non-litigious way. 80 percent of employees will meet their shared commitments, but the other 20 percent are the ones that introduce the risk and take up all of the time and make businesses question whether or not it's worth it.” These are the operational limitations of “business for good.” Legal and financial systems put companies, who want to operate in generous ways, in a tough spot and make it difficult to genuinely change how business is done. 

In 2022, Nestle subsidiary Nespresso was awarded B Corp-certified status. According to an article in The Financial Times, the certification of a multi-national company that pays poverty wages to farmers and whose products create actual tons of waste created a controversy in the B Corp community. One of the people interviewed in the article, Erinch Sahan, the previous Executive Director at the World Fair Trade Organization, suggests that B Corps accessibility is both its strength and its weakness, “It doesn’t require the big changes in business that we urgently need.” “What they do really well is creating a community of business people who are passionate about sustainability,” adds Sahan. “When you tell everyone you’re now a B Corp . . . people expect that you really do prioritise people and planet. But that’s not necessarily the case” (Raval, 2023). Others interviewed in the article go on to criticize the B Corp movement’s shallow impact, suggesting that the standards don’t dictate how business is done and therefore can’t truly change businesses' impact, thwarting systems change. I brought this article up in conversations with a couple of people in my preliminary research and I would characterize their reactions as defensive. One person defended the practices of Nespresso, suggesting that their products are biodegradable. Another person defended B Labs, saying that they are trying to increase the size and scope of the businesses that are B Corp certified so they can expand the movement more quickly. These are just anecdotes, but it does reflect what I’ve seen across the broader B Corp community in Colorado—a resistance to criticizing the B Corp movement. It’s as if the slogan “business for good” creates an inherent understanding that to be critical of the movement would be in opposition to doing good. Challenging the claims of “business for good” makes you bad. This tension is another example of the contradictions in the movement. I might argue that the problems we’re experiencing today are partly caused by a lack of interrogation into corporate logic and that a movement that sets out to reimagine business might encourage a critical eye. 

Conclusion 

My preliminary research has shown me that the B Corp movement is rich with concepts and theories about business. I’ve found the areas of dissonance between what the movement says it does and what it actually does to be spaces that reveal the limitations and possibilities of the movement. As I enter my fieldwork, these are the spaces I plan to focus my attention on. I intend to take a cue from João Biehl and form theories by both thinking with the theories my research subjects use to make sense of the B Corp movement and by returning and re-interpreting my findings to “learn from my experiences anew” (Biehl, 2013). I am energized by the opportunity to use my fieldwork and an ethnographic approach to surface the lived contradictions and think beyond what B Lab presents as the facts about the movement. I take inspiration from Fortun in her suggestion to use ethnography “... to stage encounters—in texts, online, in the street, in conference rooms—that are productively creative, creating space for something new to emerge, engineering imaginations and idioms for different futures, mindful of how very hard it is to think outside and beyond what we know presently" (2012). By unraveling how the virtuous practices of the B Corp movement are tethered to capitalist methods, I hope to pave a path to new ways of thinking and understanding ways of performing business and capitalism. 

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