As part of our discussion “The Case for Corporate Citizenship,” NCoC is highlighting some ways corporations are engaging employees, giving back to communities, and integrating civically responsible business practices into their operations. This article features the B Corporation initiative and its multifaceted approach to strengthening corporate citizenship in America.

B Corporations are an increasingly expanding cohort of businesses that have attained a certification of social responsibility, as certified by the non–profit B Lab. B Lab, which stands for “Beneficial” Lab, launched its certification system in 2006 after consulting more than 150 entrepreneurs, investors, and academics. B Corporations have identified two major problems which they believe inhibit the formation of social and environmental impact through business: the existence of shareholder primacy & the absence of transparent standards. Therefore, the presence of transparency and shareholder interest play a large role in determining a corporation's “B Rating”, which is administered by an independent third–party.

The corporations are evaluated in a number of other categories concerning the environment, employees, community, consumers, and leadership. A corporation does not have to achieve strong scores in each of these categories but must rather have a qualifying overall composite score, giving the B Ratings System a flexibility that suits a variety of businesses. Businesses must achieve of a score of at least 80 out of a possible 200 to achieve B Corporation status.

While the B movement is still gaining ground, its current participants have demonstrated a strong commitment to corporate citizenship. As of 2009, 72 percent of B Corps used renewable energy, 82 percent had programs for volunteering in their local communities, 74 percent were affiliated with a local charity, and are twice as likely to offer health insurance and retirement plans.

In addition to creating the comprehensive 170–question survey that qualifies B Corporations, B Lab has been developing various incentive programs that encourage businesses to become B Corporations. For example, there are over 40 organizations or corporations that offer discounted services and products to the B Community, saving B Corporations over $600,000 a year in annually recurring savings.

B Lab is also turning to public policy and state legislation to further incentivize businesses to become B Corporations. Maryland and Vermont officially recognize B Corporations, which allows policymakers to provide tailored tax, procurement and investment incentives to these businesses. The City of Philadelphia also passed the first tax break for certified B Corporations in December 2009. Six other states have introduced or drafted legislature recognizing B Corporations, including New York, Pennsylvania, North Carolina, Washington, Colorado, and Oregon.

2011 will be an exciting year for B Lab as it continues to gain both corporate and state support across the United States, in its aim to look beyond “good marketing” and instead distinguish the nation's “good companies.”