The B Corp movement started in 2006 after one of the co-founders of the movement, Jay Coen Gilbert realised the power of business to make an impact on the world.
Before launching the idea of B Corp into the world, Jay was also co-founder of basketball apparel brand AND1 where the seeds for the movement had been sown.
AND1 was a hugely successful business both financially but also with it’s positive impact.
It was ahead of the curve when it came to the idea of business as a force for good. They were doing CSR and socially and environmentally responsible business before it was a thing and way before the idea of conscious consumerism.
They did this by providing benefits beyond requirements for their workers, suppliers and the local community. Employees benefitted from better working conditions such as parental leave, personal care options like on-site yoga classes and employee ownership schemes.
Their supply chain was well looked after and regulated by world-class codes of conduct, ensuring the highest standards of worker health and safety, wage conditions and other worker benefits.
And in their local community, they had a standing commitment to donate 5% of profits to local charities.
Let’s face it, there are not that many businesses that could claim to be doing that today even!
In 1999 the team at AND1 hit their first major bump in the road. Preparing for more growth they had received investment in the business. Soon after this unfortunately a downturn in the market coincided with increasingly intense competition from their biggest competitor Nike.
This combined with a stall in sales ultimately led to pressures on their profitability and their first-ever round of staff layoffs.
The next hurdle was going to be a bigger and more personal one for Jay as he received what I call the existential wet fish to the face.
On September 11th 2001 Jay realised that his sister was in one of the Twin Towers in New York. Fortunately, though she was one of the lucky ones to get out alive.
Not so long after this, one of his friends and colleagues at AND1 passed away.
These two moments were the existential shock he needed for him to ponder on his own mortality and if he was doing enough with his life.
Over the next few years, Jay and Bart Houlahan (CFO/COO and President of AND1) got the business back on track and things were looking good again..
Fast forward to 2005 and Jay and Bart decided that they were going to put AND1 up for sale. Going to the market though they were quickly told that whilst the brand had value they were leaking profit because of all the employee, supply chain and community initiatives they’d implemented.
They went through the sale but came out the other side heartbroken as they realised that all the good they’d put into the business was seen as worthless to the money people. Worse than that the new owners quickly put an end to them.
It was obvious to them that shareholder primacy, caring only about the stock price at the cost of everything else, leads to a toxic short-term mindset. Jay felt that wasn’t something that he wanted to be a part of anymore.
Jay and Bart got together with a like-minded connection from Wall St called Andrew Kassoy to think about how they could challenge the status quo.
Initially, they pondered on creating a new business, in the mould of AND1 but built from day one with the intent of creating a positive impact.
But they felt that just one more business doing good wasn’t going to be enough…
Having experienced first-hand the benefits of running a company that aimed to balance purpose and profit they began to imagine the change that a movement of businesses with this aim could do.
And so they decided they were going to start an organisation that would allow companies to apply for a designation that would publicly hold them accountable for the ways they benefitted workers, communities, the environment, and customers.
In 2006 they launched B Lab and working with like-minded entrepreneurs, investors and other advisors they began creating the B Corporation Certification framework. The first cohort of companies successfully completed the Certification in 2007.
Why B? Well, the B stands for “benefit”, as in businesses providing a benefit to all its stakeholders, not just its shareholders.