Giving Compass' Take:
- B-Corps and Benefit Corporations each have their own criteria defining the social good efforts of corporations, although a single company can be both.
- How can you better support for-profit companies with a social-good mission? What criteria best match your vision and values?
- Read an investor's guide to B-Corps and Benefit Corporations.
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If you’re interested in social and environmental responsibility, sustainable business practices, and supporting a community of like-minded businesses, then you may be wondering about the difference between benefit corporations and B-corps.
Both types of entities are for-profit companies that seek to create positive social and/or environmental impact, but there are some important distinctions between the two.
Your company can be both a benefit corporation (depending on the state) and be B-Corp certified at the same time.
Keep reading to learn more about benefit corporations and B-corps, and decide which one(or if both) are right for your business.
What is a Benefit Corporation?
A benefit corporation is a legal status granted to for-profit companies that want to consider social and environmental impacts in addition to profit when making decisions.
Unlike traditional C-Corp or S-Corp status, benefit corporations are required by law to create a material positive impact on society and the environment.
This includes investing in employees, communities, and the environment; pursuing equitable treatment of all stakeholders; and transparency about social and environmental performance.
What is a B-Corp?
A B-Corp is a for-profit corporation that has been certified by the non-profit B Lab to meet certain social and environmental standards. In other words, it’s a business that not only seeks to make a profit, but also to do good in the world.
There are currently over 5,000 certified B-Corps around the globe.
The certification process is rigorous, and companies must re-certify every three years to maintain their status.
In order to become certified, companies must meet rigorous standards in five key areas: governance, workers, community relations, environment protection, and customer service & protections.
Companies must also provide evidence that their business operations are having a positive impact on society and the environment.
Read the full article about B-Corps vs. Benefit Corporations at Causeartist.