By Ted Wachtel
Jay Coen Gilbert and Bart Houlahan, in 2003, sold their sports apparel business for a quarter-billion dollars and joined with Andrew Kassoy, a successful private equity investor, to co-found B Lab, a non-profit corporation they claim “serves a global movement of people using business as a force for good.”
B Lab has developed self-assessment tools and a certification process for companies who want to meet high standards of ethical governance and positive social impact. In 2012, with Unilever’s support, Ben and Jerry’s Ice Cream went through B Lab’s certification process and in doing so, formally joined the caring capitalism movement that the ice cream company itself had inspired.
In the meantime, B Lab invented the benefit corporation—a hybrid corporation merging the social goals of the traditional non-profit with the financial goals of a profit-making corporation.
Some critics see the benefit corporation as a threat to shareholder property rights—claiming that it’s socialism. But all the ownership and decision-making stays in private hands and—in the spirit of the free market—investors now have another choice.
Consumers also have a choice. Many would prefer to buy from what they consider ethical companies. Some people believe that capitalists are inherently greedy. But that attitude is contradicted by the growing interest in benefit corporations and in B Lab certification. This suggests that caring capitalism may be coming our way.
Although it was only in 2010 that Maryland authorized the first benefit corporation, 30 states now offer the option. B Lab Europe launched in 2015. Recently, Italy became the first country in Europe to authorize the benefit corporation. There are now almost 2,000 B corporations in 50 countries in 130 industries, and more than 40,000 companies worldwide are using B Lab’s free assessment tool.