Beats | July 28, 2017

Why don’t more public companies become B Corps?

ImpactAlpha
The team at

ImpactAlpha

Etsy, the online handicraft marketplace, is one of the first public companies with “B Corp” status, and it is becoming Exhibit A for why there aren’t more companies certified for their social and environmental performance. After ousting CEO Chad Dickerson for slow growth at the online craft marketplace, investors are pressuring the firm to act more like a conventional company.

KKS Advisors explored the obstacles to certification as B Corps for public companies. The biggest barrier is the most obvious: B Corps certification (by the nonprofit B Lab) recognizes companies that take into account their whole range of stakeholders, including employees and the community. That bucks both short-termism and the primacy of shareholder returns.

An advisory group of larger companies, including Unilever, Danone, Campbell’s Soup, Natura, Suncorp and Bancolombia (one of the largest banks in Latin America) is trying to square the circle. Their report is due to report by the end of the year.