What Are B Corporations?

Facts About B Corporations

Certified B corporations are a new type of corporation which uses the power of business to accomplish social and environmental goals. B corporations meet comprehensive and transparent social and environmental performance standards and high legal accountability standards. Many corporations choose to become B certified in order to leverage the influence of their business beyond their industry and geography, and because it makes good business sense.

To become a B corporation, a company must take and pass the B Impact Ratings System test. This test sets a benchmark for social and environmental impact. Adopting the B corporation legal framework is also required, and signing a term sheet will make the certification official. The vision behind Be corporations is to create a new sector of the economy that will provide individuals with greater economic opportunity, and move society closer to achieving a positive environmental footprint.

B Corporations Social Impact Bonds

Since B corporations are for-profit businesses, they currently cannot use tax relief to raise capital through social impact bonds. While donations to charities by philanthropists and corporations attract tax breaks, investments in social bonds do not. This means that cash to get the pioneering projects of B corporations off the ground is not as forthcoming as some say it should be.

Because B corporations provide many benefits to their communities, it can be argued that governments should provide tax advantages to encourage these companies to expand. So far, though, most have not done so because the sector is still so new. In the last UK budget, chancellor George Osborne did allow B corporations to keep community investment tax relief, which allows investors in community development finance institutions to reclaim up to 25% of their investment over five years.

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