While B Corps haven’t carried cachet for brands for long, interest in the designation is ramping up as sustainability becomes one of fashion’s “It” item.
And the certification, which measures a company’s social and environmental performance, has hardly been adversely impacted by COVID-19 — ethical fashion, it seems, may be more covetable than it has ever been.
“In the wake of the pandemic, we’ve seen unprecedented growth,” said Anthea Kelsick, co-chief executive officer of B Lab, a nonprofit organization that certifies companies deemed deserving, speaking broadly of the growth across industries. “We saw a 60 percent increase in certifications from 2018 to 2019, and we’re expecting that to be even larger in 2020.”
Fashion, though it still accounts for a small portion of the 3,522 certified B Corps spanning 74 countries — with just 150 companies in the community — is increasingly contributing to the growth. More and more, brands are looking to join leaders such as Patagonia, Allbirds, Athleta and Another Tomorrow in the B Corp club. Since March, B Lab said “around 1,000” companies in the fashion industry have signed on to use its B Impact Assessment, one key element of the certification process.
“Certification is carrying cachet across many industries, and I think for industries that traditionally have outsize negative impacts on society, whether it’s on people or on the environment, I think it even has increased cachet,” Kelsick said. “As it pertains to the fashion industry, which creates culture and also has some of these outsize impacts based on things like supply chain or manufacturing…where companies are able to show up with the B Corp certification, which is what tells people that, yes, this is a company that is responsible as it pertains to how it treats people and the environment, absolutely it has outsize value.”
To become a certified B Corp, companies must achieve a minimum verified score on the B Impact Assessment, a rigorous tool B Lab uses to evaluate and score business impact in five key areas: governance, workers, community, environment and customers. It takes 80 points out of a possible 200 to pass, and the results of the impact report must be posted publicly as part of a commitment to transparency. (So far, the rankings have created a sense of healthy competition in what has become a race to the top.) The final arm of the trifecta of B Corp requirements is the legal accountability, which either means structuring the company as a benefit corporation (an alternative to an S Corp or a C Corp) to build positive stakeholder impact into the company mission, or otherwise integrating stakeholder considerations into the governance structure, depending on what’s available where the company is incorporated. Businesses have to recertify every three years to maintain their B Corp status, and ongoing improvements, which B Lab advises on, are key to improving scores over time.
Detractors say B Corp certification is one among many in a sea of sustainability initiatives, and that the voluntarily sought designation — though third-party certified — lacks teeth without government oversight and little accountability beyond what’s owed to shareholders.
But changing times are making more things public and fewer things passable, and most companies aren’t subjecting themselves to a B Corp-level undertaking for the sake of greenwashing.
Sustainability, whether it’s sought through B Corp certification or not, is now fashion’s biggest mandate.
“The game of sustainability is rising for all of the companies,” said Federica Levato, partner at Bain & Co. and coauthor of the consulting firm’s annual luxury study. “All of the companies need to take a stance on this important topic and not only have a role in decreasing the level of unsustainability in fashion, but also really be activists and stand for something in sustainability. B Corps are now in the spotlight because they are the epitome of sustainability…they have become and are becoming phenomena in fashion.”
Another Tomorrow, a sustainable luxury line that has gained quick traction since its January 2020 launch, is among the B Corp in crowd.
For a former finance executive like founder Vanessa Barboni Hallik to enter fashion’s fray at a time when the industry has been battling for relevance amid manifold challenges, including shrinking margins, building the brand around sustainability had to make business sense, too. From the start, she established Another Tomorrow as a legal benefit corporation so its internal ethos and external commitments would align with what its shareholders would expect where environmental, social and governance factors are concerned.
“It was really important for me to have that architecture for accountability, and that’s really the way I think about B Corp and other things that we do internally as well, because I’ve just seen firsthand how it goes wrong in the absence of that,” Hallik said. “It’s not enough to say that you’re going to do x, y or z, it’s actually adopting those binding frameworks.”
For Another Tomorrow, which focuses on creating “desirable, functional” product with an emphasis on style and quality that contributes to longevity, B Corp has been just one piece in its sustainability puzzle, with transparency and ensuring living wages being the other critical pieces at play. The brand has also partnered with Internet of Things company Evrythng to help authenticate its product for resale to ensure circularity is part of its efforts, too. And in June it signed on to Brother Vellies founder Aurora James’ 15 Percent Pledge to hold itself accountable for being anti-racist and incorporating more people of color into its supply chain. It’s a model built on purpose as well as profit, and something B Corps are only just beginning to garner external attention for.
“I think B Corp still feels like it’s a fairly early stage discussion within the industry, but I’m excited to see that there’s a lot more energy around it. And much in the way that food and CPG really led in terms of sustainable sourcing, we’re starting to see Fortune 500 companies in the food and CPG space really adopt B Corp as well [Danone is one of them]. And I think that will really start to lead the conversation,” Hallik said. “In terms of sustainability overall, there’s definitely a different understanding today than there was even a year ago that this is not optional. If we care about a positive, shared, equitable vision for the planet, these are not nice to haves. These are things that are existential for the industry.”
The hope, she added, is “that B Corp becomes kind of a toolkit and a framework for the industry to move more quickly than it might have otherwise.”
Among the 200 questions the B Impact Assessment asks, like “What percentage of energy (relative to company revenues) was saved in the last year for your corporate facilities?” and “What percentage of management is from underrepresented populations?,” it also seeks to gauge things like how much of a company’s product mix comprises sustainable fibers. It’s geared toward making companies know their operations intimately and helping them understand what metrics need the most work when it comes to their sustainability journey.
For Patagonia, which became a B Corp in 2012 before there was any buzz about it in fashion, participation in the collective of certified companies, according to company vice president of social and environmental responsibility Cara Chacon, has kept the brand in check in terms of progress toward its mission: “We’re in business to save our home planet.”
“In terms of proving to ourselves that we’re doing a good job, or showing us where we’re not doing a good job, that’s what it helps us with. But it also is a third-party certification that shows the world we’re not just a bunch of people talking the talk, that we’re actually walking the walk,” she said. “On a more granular level, for our team especially, it helps us understand where do we need to go next. It helps us with our strategic planning annually and long-term planning, setting goals.”
As B Corps, fashion companies are part of a collective movement toward greater sustainability and accountability that Chacon says is growing. And one that knows profit alone won’t win.
“It’s old thinking to think that to turn a profit, you have to externalize environmental and social responsibility,” she said. “You can actually become more profitable by showing, and walking the talk, that you care about people and you want to make products that are meaningful and don’t exploit human beings and don’t damage our natural resources.”
The truth of the notion has been proven out by Athleta, too. Fashion doesn’t have to be a battle of sustainability versus style or profit versus planet.
“As one of the largest fashion B Corps, we are an example that it is possible to balance people, planet and profit with scale,” Athleta president and ceo Mary Beth Laughton said. “We take that responsibility very seriously.”
Having realized a few years back that many of its missions to focus on sustainability and empower women both in its upstream and downstream business align with what B Corp certifications seek, Athleta pursued the designation, and Laughton said it has been a boon that extends beyond branding.
“Recognition felt good, but it was also humbling, because we knew we could — and must — do even more,” Laughton said. “Our B Corp certification has helped us continue learning and improving upon our efforts to build a well-rounded business. We do that by showing up end to end — from the development of our product, to what we practice at headquarters and our retail stores to our distribution centers, and what we market.”
In the future of fashion, people, planet and profit will have to be on equal footing for brands that hope to sustain themselves, whether it’s being a B Corp that gets them there or not.
“I would love to see the B Corp movement become the A-list of the apparel industry. I think it’s slowly getting there and I’m seeing other signs of hope from other types of initiatives, like Fairtrade certification and using preferred materials, more sustainable materials like organic cotton and recycled polyester,” Chacon said. “I see B Corp as one ray of hope, but I’m also seeing so many others that are related to B Corp that all kind of shows me that the new A-list for fashion is having these meaningful certifications.”