Every year, four million Millennials — Generation Y, born between 1982 and 2002 — set out on their own to join the workforce. This generation, which makes up about quarter of today’s population, is one of the most diverse, technologically connected and well-educated group in history — and they have strong opinions about corporate authenticity, transparency and responsibility. According to a recent survey by Net Impact, eighty percent of 13-25-year-olds want to work for a company that cares about its impacts. In the same survey, more than half said they would refuse to work for an irresponsible corporation.
We see the strong opinions of Millennials fundamentally changing the way companies do business. Some of this change can be seen in today’s corporate social responsibility (CSR) movement. Over the past 25 years, the country’s largest companies have created new functions and departments to report annually on CSR measures relating to worker safety, fair pay and environmental sustainability. For many companies, CSR reporting has become just part of the way they do business.
While many of the country’s 23 million small businesses do not have the resources to do CSR reporting, they can look to a voluntary certification or legal classification that mimics big companies’ CSR reporting: becoming a B Corporation.
Both of our companies are B Corps, because being both socially and environmentally responsible is part of our DNA. In the process of certification, however, we’ve also found tangible business benefits.
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1. Reporting Made Easy
Becoming a B Corp is a confidential, manageable and, most importantly, efficient way to report on your social and environmental commitments without the onerous CSR costs. The initial B Impact Assessment (which kicks off the B Corp certification) can easily be done by a member of your team, and for some businesses, with the help of your accountant.
And, once you have completed the assessment and implemented the actions for certification, you can take the assessment every few years. Doing so benchmarks and tracks your performance while setting internal and external goals to tackle in the future — just as CSR reporting does. To ensure accuracy and compliance, a certain percentage of B Corp businesses are audited once a year.
2. Keep the Best and Brightest
Researchers have found that better performance on the job is often linked to people believing they are doing “meaningful work.” In one study, people who were satisfied in their jobs because they believed in what they were doing were found to have 16 percent better overall performance, 125 percent less burnout and 46 percent more job satisfaction than their peers.
Millennials as a generation appear to value meaningful work even more than the generations that came before them. A 2011 study comparing managers to Millennials (management still largely consists of older Gen Xers and Baby Boomers) found that only 28 percent of Millennials valued high pay at their jobs, compared to half of all managers. And yet a third of Millennials wanted their jobs to provide them with meaning, compared to just 12 percent of managers.
The B Corp certification, which hardwires economic, social and environmental aspirations into the structure of a business, is a proof point for any company seeking to hire Millennial talent. It helps our companies attract, and keep, the people we want working for us.
3. Attract New Customers
Millennial customers are especially attuned to the company ethics you communicate. According to the 2010 Cause Evolution Study, “… 83 percent of Americans want more of the products, services and retailers they use to support causes.” As Millennials become a bigger part of the marketplace, they need to know you’re being socially and environmentally responsible before they buy. The B Corp certification is a signal that helps Millennials purchase goods aligned with their values.
Millennials value collaboration, “flat” organizations, working in teams and authenticity from colleagues and management. B Corporations commit to creating environments where transparency in company decisions and policies is a priority. Information and power are no longer held by a very few at the top, providing motivation and inspiration for employees throughout an organization.
5. Keep It Local
Part of the B Corporation assessment asks companies to be transparent about sourcing, with extra points given for using a high percentage of local suppliers. Buying locally and supporting other small businesses is something we believe in and helps build our community. We have also found incredible support from other B Corps in our state, with our certification as common ground from which to build partnerships and mentoring relationships.
In the U.S., eighteen states — most recently Delaware — have enacted benefit corporations as a regulatory classification, which means that businesses are legally structured to follow social and environmental guidelines while being protected by state law. As more and more companies seek to distinguish themselves as value-driven businesses, those already bearing the B Corp certification (including brands such as Patagonia, Method, Ben & Jerry's and, as of this week, Beanfields Snacks) will undoubtedly find it easier to then convert to a benefit corporation, as the criteria for both are closely aligned.
We expect the move to B Corps to accelerate as more Millennials move into the workforce, become managers and start their own businesses. We look forward to helping this trend get to the next level as more and more businesses value environmental and social goals right along with profits and revenue.