The entrepreneur behind the coveted B Corp label shares why he's partnering with the UN to solve our most pressing workforce problems
- B Lab cofounder Jay Coen Gilbert is one of Business Insider's 100 People Transforming Business.
- B Lab grants B Corp certification, which indicates that a company benefits employees, the environment, communities, and customers, in addition to shareholders.
- The group has partnered with small companies and the UN to develop tools that large, multinational companies can use, making B Corp certification easier to achieve.
- This article is part of Business Insider's ongoing series on Better Capitalism.
- See the full list of the 100 people transforming business here.
If you live in the United States, there's a good chance you've come across a "Certified B Corp" icon on a pint of ice cream or a carton of milk - that's because there are now 2,800 B Corp companies (the B stands for "benefit"), and include brands like Ben & Jerry's, Dannon, and Patagonia.
The label shows that a company has proven itself to benefit not only shareholders, but workers, communities, the environment, and customers. The visionary behind the movement is entrepreneur Jay Coen Gilbert, and we've selected him as one of Business Insider's 100 People Transforming Business. In a recent interview, he told us that his nonprofit, B Lab, is working to get more large, multinational corporations to become B Corp."We can't create an economy that works for everyone if the biggest companies in the economy are moving in a different direction," he said. "That doesn't work. One indicator of progress is this continued meaningful engagement of large publicly traded companies like Danone, Unilever, The Gap, and others, into this space."
To make this happen, B Lab is partnering with innovative small companies and the United Nations to develop tools that all companies can use. "Part of our job is to create pathways for them to do that in a meaningful way, and not allow the B Corp movement to get co-opted. We can't run to meet them. We have to create pathways for them to meet us."
Coen Gilbert was one of the cofounders of the basketball apparel company AND1. After selling the company in 2005, he decided that his next project would be an attempt to help end shareholder primacy. It's a theory that states a public company's sole purpose is to benefit shareholders, with the idea that everyone else benefits from this pursuit. Coen Gilbert believed this didn't play out that way in practice, and instead resulted in a toxic short-termism that ended up hurting all stakeholders, including shareholders, over the long-term.
He and another AND1 executive, Bart Houlahan, teamed up with a Wall Street connection, Andrew Kassoy, and launched B Lab in 2006. Their work took on a legal component as well, and they successfully lobbied 30 states (and eventually all of Italy) to pass "benefit corporation" legislation, which is separate from the B Corp certification but legally binds a company to the same ideals. There are now more than 8,000 of them.
Coen Gilbert told us that he thinks the wholesale transition from shareholder primacy to a stakeholder approach is inevitable, but thinks B Lab can accelerate it. That's why he needs those big companies he mentioned on his side. He shared with us a few of B Lab's current projects that he's looking to adapt to companies of all sizes.
B Lab is working with the small Vermont-based company Rhino Foods on creating a nonprofit that will focus on spreading Rhino Foods' innovative "income advance" program to other companies.Rhino Foods' leadership met a growing request from employees for loans through the program, launched in 2007.
In its current iteration, an employee struggling with an unexpected payment can apply internally for up to a $1,000 loan. This employee has to be in good standing and have been with the company for at least 60 days. Once HR approves the application, the employee opens a savings account with a local credit union and agrees to maintain a minimum balance of $50. The credit union then disburses the low-interest loan, usually on the same day. Rhino Foods handles the payments through weekly payroll deductions. The company also provides the employee with accompanying personal finance education.
From its inception through 2017, 34% of employees took out 379 loans for a total of $380,040 with a default rate under 4%. The company's retention rate increased 36%, and most of those employees continued using their savings account, putting away a total $42,000.
Hiring formerly incarcerated people
From day one, back in 1982, Greyston Bakery has had an "open hiring" policy, where anyone willing to work is able to take a job. And the Yonkers, New York-based bakery has been successful, most notably as the brownie supplier for Ben & Jerry's ice cream, with around $20 million in annual revenue.
One of Greyston founder Bernie Glassman's main reasons for starting this policy was to help ex-convicts, who have traditionally been shut out of the workforce. At Greyston, employees start as apprentices and spend 10 months not only learning the job, but developing a career path tailored to their needs.
Greyston launched the Center for Open Hiring last year for the purpose of showing other employers the benefits of accepting formerly incarcerated people looking for a second chance, and for sharing best practices on how to onboard these employees in a way that benefits both them and the company.
Meeting sustainability goals
The United Nations developed 17 sustainable development goals (SDGs) in 2015, with the intention of reducing inequality and addressing climate change among member states.These were of, course, developed for countries, but Coen Gilbert said, "increasingly they're saying, 'We aren't going to be able to meet the SDGs without the private sector doing its share.' Then the companies are saying, 'Well, what the hell do I know about the SDGs? How do I translate that into a business practice?' And that's kind of like the B Lab's sweet spot."
B Lab partnered with the UN to find ways to adapt the goals to the private sector, so that companies can adopt proven processes for increasing gender equality and reducing their carbon footprint. Coen Gilbert said B Lab will launch an SDG navigator for companies by early next year.
The purpose of the navigator, as well as the other two projects, is to get large corporations to recognize that becoming a stakeholder-based company will not only make it more appealing to customers and employees, but make it better run
The first step, Coen Gilbert said, is "we have to change the operating environment of those companies, and the way to do that is to change their orientation to being purpose-driven." B Lab will be there to help make that shift as easy and appealing as possible.