The B Corp movement began in 2006 when three college friends decided to create B Lab: Jay Coen Gilbert, Bart Houlahan, and Andrew Kassoy.
B Lab is the non-profit association behind the B Corp certification system, one of the most exciting and potentially significant movements to gain momentum in the business world in decades.
Jay Coen Gilbert and Bart Houlahan’s first venture was AND 1, a US-based athletic footwear company. Although the company ended up folding in 2005, it gave Gilbert and Houlahan a chance to apply some of the concepts of social responsibility that would go on to inform the B Corp movement.
Gilbert and Houlahan subsequently joined forces with Kassoy to embark on a new business venture together. This time they had a clear objective: to benefit society.
What Gilbert, Houlahan, and Kassoy soon realized, after speaking to hundreds of entrepreneurs, investors, and opinion leaders, was that in order to accelerate growth and promote a responsible business sector, two basic elements had to be in place: firstly, a legal framework built on innovative values to help companies grow while staying committed to their mission, and secondly, standards that could be measured.
This was the seed for B Lab, a non-profit organization dedicated to transforming the global economy through private enterprise, thereby benefitting all people, communities, and the planet.
B Corp is a certification which recognizes the inclusive introduction of positive impact. Companies that obtain B Corp certification guarantee their compliance with a series of specific standards on corporate governance, employees, clients, and environmental policies.
What sets B Corp apart from other business certification programmes is that it measures the entire social and environmental impact of a company.
The process begins with a confidential B Impact Assessment, which lets the organization understand the requirements it must meet in order to become a B Corp certified company.
All of the companies that participate in the process must maintain total transparency from the start and adapt their corporate governance to include considerations from all stakeholders, not just shareholders, in their decision-making. This is known as “stakeholder governance”.
Another important prerequisite for becoming a certified B Corp company is completing the disclosure questionnaire, which consists of a series of non-weighted Yes/No questions that allow a company to confidentially reveal any sensitive sector, practices, fines, or sanctions related to their business or companies.
The process can take anywhere from six months to several years, depending on the size of the company. Some companies decide to delay the certification process to maximize their B Impact Assessment score, whereas others apply and start the certification process as soon as they reach the 80-point benchmark, the minimum required for certification.
According to an article in Forbes, wineries that opt for the B Corp route often base their engagement on implementing low-impact agricultural methods and resource management. They commit to the fair and responsible treatment of workers, the community, and the natural environment.
Today the number of wineries deciding to join the B Corp movement is on the rise. A clear example of this is Cielo e Terra, a winery with a well-established family winemaking tradition, founded in 1908 and currently helmed by the fourth generation. Cielo e Terra produces wines that are primarily aimed at large distribution channels and the hospitality sector in Italy and more than 70 countries worldwide.
Giampietro Povolo, PhD, responsible for managing the winery’s financial department and supply chain, confirms that the winery obtained its B Corp certification in 2020.
The winery decided to take this path in order to become part of the B Corp movement. The certification process also allowed them to establish a useful framework for implementing sustainability initiatives, including quantitative information to support certain statements (e.g. the company reduced its water use from 2 to 1 litre per bottle).
Among the benefits obtained after completing the certification process, the winery highlights the reduction in water consumption at its facilities, as well as becoming a company that benefits the public by taking social and environmental well-being into account.
In this case, no changes in the corporate governance structure were required, so the certification process only took 18 months.
Since wineries operate on a business model whose financial profits derive fundamentally from the sale of alcoholic beverages, they must confront this problem during the B Corp certification process, given the negative effect alcohol can have on the health and well-being of individuals and their communities.
To this end, they must not only comply with current legislation on the sale of alcoholic beverages, but also introduce standards in their internal policies to ensure the responsible consumption of their products and prevent alcohol abuse.
In the wine and grape sector, B Corp certification is an essential tool that can assist wineries in organizing their internal processes and improve their business relations with all stakeholders. In striving to improve their production process, wineries often focus their efforts on environmental standards, but fail to address improvements in how they relate to their workers and clients.
B Corp certified wineries can provide tangible proof that they comply with the highest standards of verified social and environmental performance, public transparency, and accountability, which allows them to balance profits with purpose.
In light of the many benefits to be gained from joining the B Corp movement, a growing number of companies in the wine and grape sector are taking this route. After all, this movement is making it clear once again that companies can lead the change towards a different, stakeholder-driven economic model.
Marta Juega, PhD