“B Corp” coffee companies – what and why

by on January 28, 2014

You may have seen companies promoting the fact that they are “B Corps,” including many coffee companies. What are they? Which coffee companies are B Corps? Should we care?

Benefit corporations — the legal kind

First, there are “benefit corporations” or “B corps” for short, which are legal corporate forms recognized in 20 states plus the District of Columbia as of this writing.  Benefit corporations are for-profit companies which have chosen a governance that also requires them to consider the social and environmental benefits of their corporate actions. These companies have transparency requirements including publishing a public annual report on their benefit efforts.

certified-b-corpB Corps — the certified kind

Whether a legal benefit corporation or not, a company can go through a qualification process to become a certified B Corp, verified by the non-profit B Lab. The organization certifies companies once they have met standards of social and environmental performance and have changed their bylaws to take into account the impact of their decisions on the environment, community and employees. The non-profit also supports the enactment of legal benefit corporations, and created GIIRS – Global Impact Investing Rating System — a rating and analytic tool to measure social impact of companies, much like financial metric ratings such as Morningstar.

The process involves a self-assessment by the applicant company. The assessments are developed and updated by an independent advisory council. This is followed by a phone review by B Lab staff to clarify points, and if the company scores 80 out of 200 points on the assessment, a request for documentation of key points. Companies then are required to amend their governing documents to reflect their commitment to social and environmental impacts. Finally, they sign a declaration and pay. Certification costs $500 to $25,000 a year depending on a company’s annual sales. Certification is good for two years.

How rigorous?

I’m generally uncomfortable with corporate self-assessments, although they are a starting point for a strong review. However in this case, the initial scoring review and any on-site review (only 10% of companies are chosen at random per year for the latter) are not done by an accredited third-party auditor.  I’m also a bit leery of a certification where 40% is a passing grade, but it depends on what is actually being scored.

I was most interested in the environmental assessment and scoring.  The assessment questionnaires are not posted online, as there are 40 different versions tailored to company size, sector, etc. I think this is positive, because a one-size-fits-all approach is less likely to be meaningful. The B Lab staff let me go through and review a self-assessment such as might be used by a medium-sized coffee roasting company. For the most part, the environmentally-oriented questions dealt with the physical plant and overall company operations. For instance, there were questions on:

  • LEED certification or other green building initiatives
  • Recycling at the company, as well as use of recycled and other green supplies and materials
  • Monitoring environmental impacts of company operations (water use, solid waste, greenhouse gases), and reduction of the company’s carbon footprint by commuting practices (allowing use of telecommuting, encourage carpooling, public transportation, etc.)
  • Overal energy use and conservation, including monitoring, the use of renewable energy sources, and so on.

Product-oriented questions were aimed at recycled packaging, energy use, and waste generation/reduction in production; the use of Life Cycle Assessments, and things that seemed a bit on the periphery of what we as consumers might be interested in as far as coffee as a product.

When I ponder a coffee roaster’s sustainability efforts, I admit I generally think about their sourcing and whether they purchase coffee that is sustainably grown. Of course, the company’s own efforts at being environmentally responsible are important, too, and a high score in this category gives an indication of how deep the commitment goes. Perhaps many of the questions (at least in the version I poked through) are not entirely appropriate to many small specialty coffee roasters and retailers.  The B Lab folks completely get that, and request comments on content, wording, scope, or focus through a feedback link on each question.  Thus, the assessments can continue to evolve and become more customized to different businesses.

The final positive aspect to the assessment process was that it contains benchmarking, best practices, and tools and resources to improve scores.

If a company completes an honest assessment and then provides feedback and fully utilizes the resources available through this process, I think it says something meaningful and is a worthwhile designation. I’m not totally convinced there is a way for a consumer to really evaluate a company’s efforts just by looking at their scores, and especially if they just see the B Corp badge on a website. But I like the concept, intent, and spirit of the B Corp movement. Since it is a work in progress and still evolving, I think it has some real potential to help consumers assess the companies they do business with.

There are currently nearly 900 certified B Corps. Here are the coffee roasters and importers with their overall and environmental scores.

And here is the 2013 list of the companies of all types in the top 10% for environmental impact, divided by company size.

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Revised on March 23, 2014

Posted in Background information,Retail and specialty roasters

Tim Stiffler-Dean January 29, 2014 at 6:58 pm

This is great information. I agree that there are some points that aren’t altogether comfortably sitting with me, but I like the intent behind the movement and can see it evolving well if the right people are supporting it. Going to keep an eye on that website and see if my own company can get involved in the future. Great write-up!

JulieCraves January 31, 2014 at 6:30 am

Thanks, Tim. And I’d be interested in anyone’s first-hand experience with going through the B Corp assessment, as well as what consumers think.

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