Giving Compass' Take:

• Huge corporations have joined the B Corp movement, which aims to reform capitalism by making companies prioritize stakeholders, rather than just shareholders. 

• How can donors help fortify this movement? How can you navigate the broader critiques of this movement while still supporting the philanthropic efforts of corporations? 

• Read more about the larger companies engaging with the B Corps movement. 


Led by the nonprofit B Lab, the B Corp movement aims to provide a solution to the increasing recognition that corporations’ embrace of “shareholder primacy” is a root cause of many fundamental problems in the world today, including climate change, income inequality, the difficulty many regions have faced in responding to the COVID-19 pandemic, and even the racial injustices that pervade our institutions.

But critics of such commitments have questioned the extent to which they are just talk without action. For instance, Marriott, one of the BRT signatories, furloughed a large proportion of its US employees during the COVID-19 crisis while at the same time paying out more than $160 million in dividends to shareholders and seeking a raise for its CEO. The Council of Institutional Investors (CII) went so far as to dismiss such a shift in corporate purpose, saying that “accountability to everyone means accountability to no one.”

The B Corp model addresses this issue of accountability directly by providing the tools, methods, and legal frameworks for companies to align their operations with long-term values that consider all stakeholders. It also helps to build trust and brand value with the general public.

Additionally, going through the assessment has been shown to help companies engage in continuous improvement. Until very recently, however, B Lab has focused on small- and medium-sized companies, such as Kickstarter, Allbirds, Hootsuite, and Bombas. But if the ultimate goal is to develop “a global economy that aligns its activities toward achieving our common purpose of a shared and durable prosperity for all,” as B Lab states, the movement must get large, public multinationals on board.

Read the full article about the B Corp Movement by Christopher Marquis at Stanford Social Innovation Review.