CHRISTOPHER BOOKER: A tour through the New Belgium Brewing Company in Fort Collins, Colorado, passes through the bottling facility and brewhouse, before ending at the bar.
New Belgium is one the largest craft breweries in the country, distributing beer to all 50 states.
When you buy its best known brand, Fat Tire Belgian style ale, that “B” on the label doesn’t stand for beer, it’s stands for B Corp, a designation given to businesses dedicated to more than profit.
KATE WALLACE: I think when you get together with people you realize you have a lot of the same values.
CHRISTOPHER BOOKER: Katie Wallace is New Belgium’s assistant director of sustainability.
KATIE WALLACE: If you’re running a business that’s not considering the impact that you have on the environment and society, or the impact that those things have upon your business, then you’re not operating a business that’s really going to be in existence in the future.
CHRISTOPHER BOOKER: New Belgium is privately owned and profitable, selling nearly a million barrels of beer a year and generating $225 million a year in revenue.
KATIE WALLACE: For a long time we felt that we kind of stumbled into this for values-based reasons but then found that economically it was a really powerful business model and has been a key ingredient of our success over time
CHRISTOPHER BOOKER: New Belgium took its dedication up a notch in 2013, when it became a certified B Corp, submitting to a rigorous audit of its community impact by the Pennsylvania based B Lab.
B Lab likens the certification to “Fair Trade” for coffee and the “LEED” certification for buildings with environmental and energy-efficient design.
Beyond charitable giving, companies can score more points for making eco-friendly products, offering robust benefit packages, and being transparent in their corporate governance.
New Belgium earned its certification in large part because of its environmental practices: generating 12 percent of its electricity from solar panels and biogas, a fuel they create by the wastewater produced when they make beer. After one year on the job, employees are given bikes to commute carbon free and given shares in the company, which is now employee owned.
KATIE WALLACE: B Corp has given us a way to measure things that aren’t inherently quantitative, but we know are important to us. Like providing 100 percent of our health care premiums for our co-workers or putting solar on site or biogas. It helps us to bring that into a measurement space where we can compare ourselves against other companies and see are we really being leaders in this area or is there a way we can improve?
CHRISTOPHER BOOKER: Believing business can function as “a force for good,” B Lab has certified 22,000 companies worldwide since 2007. Subjecting mostly small and medium-sized, privately held companies to a 200 point assessment.
The list includes ice cream makers Ben & Jerry’s, eyewear manufacturer Warby Parker, and outdoor clothing giant Patagonia.
There are 99 B Corps in Colorado. That includes businesses that don’t manufacture anything like Denver law firm moye white. Attorney Dominick Sekich oversaw its B Corps application.
DOMINICK SEKICH: There are a lot of opportunities that, say, manufacturers have that, as a service organization, we don’t have. We can’t really point to a supply chain that we’ve improved, because our supply chain is fairly short and concrete.
CHRISTOPHER BOOKER: Moye White acheived B Corp certification after it improved a number of employee benefits, expanding paid parental and family leave, increasing flex time, and starting an employee community service group that volunteers with organizations like Habitat for Humanity.
Sekich says each time an employee takes advantage of their three-month paid family leave benefit, it can cost the firm between $20,000 and $50,000. But the firm believes it’s worth it.
DOMINICK SEKICH: We’ve had some clients approach us asking us how we’ve committed to the environment, how we’ve committed to our communities, and we’re able to point to our certification as a B Corporation as part of that effort.
CHRISTOPHER BOOKER: When Moye White was working toward its B Corp certification, it turned to B Lab’s Kim Coupanous for assistance.
KIM COUPANOS: If you look at society in general and all of the good things that capitalism has brought to civilization and humanity over the last hundred plus years, there’s been an equal number of really negative things. Massive income divides biotoxicity, greenhouse gases, you name your kind of social or environmental ill. Capitalism has kind of created that.
CHRISTOPHER BOOKER: Before joining B Lab, Coupanous ran an outdoor clothing company for 16 years.
KIM COUPANOUS: I agree with the profit motive and there’s no bones about that. I also know that the power of business to transform society is huge. And we are going into this new century facing some pretty challenging problems that haven’t been solved by the nonprofit sector or the government sector. And at the same time, there’s this kind of spirit of innovation and optimism, especially among Millennials who say we can do better than this.
CHRISTOPHER BOOKER: Economically, Colorado is doing better than most states. Its 2.3 percent unemployment rate is the lowest in the country. The Denver skyline is filled with cranes constructing new apartment buildings for some of the 60,000 people who move to the state every year. Most settling in the relatively affluent greater Denver and Boulder areas.
Will this be relegated to areas that are already populated by the upper middle class, the educated, the tech sector? I can think of many corners of America that they just want jobs. They’re not even having the ability to think about how does this save water.
KIM COUPANOUS: Certainly it really can’t be relegated to the realm of upper middle class progressive city. Because if we are trying to create shared and or durable prosperity for all it means cities that are depressed. It means, you know, local businesses, nail salons, and moving companies, and the local garage.
CHRISTOPHER BOOKER: The B Corp movement is not without its skeptics.
KENT GREENFIELD: It is a band aid on a cancerous patient.
CHRISTOPHER BOOKER: Boston College law professor Kent Greenfield applauds the intent of b-corps but fears the B Corps movement may mask the need for far greater changes to the way American companies conduct themselves.
KENT GREENFIELD: Let’s be honest the real bad actors in the corporate world are not those who are voluntarily opting in .
CHRISTOPHER BOOKER: Greenfield argues that there must be changes in corporate governance to legally support companies working to be better citizens.
KENT GREENFIELD: As long as it’s voluntary, then it’s still gonna leave bad actors aside. So if you’re a Wall Street hedge fund manager, are you going to prefer companies that are B Corps? Are you gonna prefer companies who are saying, “no, we don’t think that being a B Corp is conducive to the shareholder value?” So I think our efforts need to be aimed at a more fundamental adjustment in the way we think about corporate obligation and the way we govern corporations.
CHRISTOPHER BOOKER: Despite the lack of federal or state regulation compelling companies to function as better actors, there is a way for companies who pursue both profit and social good to be legally protected.
With a push from B Lab, Colorado and 32 other states have passed legislation allowing companies to incorporate as a public benefit corporation, which enshrines their social mission into their articles of incorporation.
This spring, food and beverage company DanoneWave became the largest public benefit corporation in the U.S., with 6,000 employees and $6 billion in annual revenue. A subsidiary of French multinational Danone, DanoneWave makes organic products like Horizon milk, Silk almond milk, and Wallaby yogurt.
DEBRA ESCHMEYER: We encourage dietary practices that improve the health of people through food.
CHRISTOPHER BOOKER: Deborah Eschmeyer is the vice president of communications and community affairs.
DEBRA ESCHMEYER: When folks go to the grocery store, they want to know that the products are actually doing right by the employees and by the people and the planet.
CHRISTOPHER BOOKER: Its production process is increasingly using natural ingredients and the company has spent money to reduce its waste and promote animal welfare.
Eschmeyer says DanoneWave believes the upfront costs pay off in the long run.
DEBRA ESCHMEYER: These are things that help the bottom line. Because waste reduction, for example, is great for the bottom line. It’s also great for the planet. We have this greater goal of showing that you can meet the financial shareholders’ interests and do right by the people and the planet.
CHRISTOPHER BOOKER: DanoneWave is arguably providing a test case for scale.
DEBRA ESCHMEYER: Yes.
CHRISTOPHER BOOKER: How difficult is it to go through this process with such a large company
DEBRA ESCHMEYER: Yeah, I mean, we’re definitely proving the case. We want to make sure that large companies can do this, and we can do this at scale. And DanoneWave is now one of the top 15 food and beverage companies in the United States. And so when we do this, it’s a challenge to other companies to step up as well.
CHRISTOPHER BOOKER: Six more states are now considering benefit corporation legislation. B Lab says it will certify its 100 Colorado company as a B-Corp next week.