A few weeks ago, I published a story on the paradox of coffee pricing. In the piece, I pointed to a current issue complicating rising coffee costs: multinational corporations increasing their profits and C-suite salaries while pushing higher prices onto consumers, and blaming those increases on supply-chain delays, inflation, and demand for better wages from front-line workers:
As a reader and a consumer, headlines like these can be distressing. If you go to Starbucks every morning and read that they’re raising prices while posting record-breaking profits—along with spending exorbitant amounts of money on union-busting firms and consultants to slow down the shop’s nationwide unionization effort—you might ask yourself: Where else am I supposed to go? How can I find an ethical coffee business?
This question can apply to any food you purchase. Wine, bananas, chocolate—how are we as consumers supposed to make good decisions about the things we buy? For many, certifications seem to be the answer.
There are myriad ways a company can signal that what it sells is high-quality or special. Some are official and conferred by a designated group, like “organic” or “fair trade,” the latter of which is conferred by Fairtrade International, a nonprofit product-certification organization that works with producers of coffee, as well as goods like bananas, sugar, and cocoa. Other labels are unofficial, like “direct trade” and “relationship-driven,” phrases that might carry a generally agreed-upon meaning but aren’t formally defined.
The promise of any of these certifications—official or otherwise—is that you’re purchasing an item that has been sourced ethically in some way. However, none of these certifications is holistic. There are a lot of reasons to criticize Fairtrade International that go beyond the scope of this piece, but one major failing is that Fairtrade places its attention on one portion of the supply chain without considering the long journey an item takes to get into the hands of consumers. And because many of the organizations utilizing certifications like “fair trade” are still large corporations, such labels can function as an attention-grabbing way of selling a business or product as more ethical than it really is.
For example, a company can say it purchases its raw materials in a so-called “ethical” way by working with fair-trade suppliers and paying a few extra pennies, but it still needs to meet shareholder expectations. Not only is the impact of using “fair trade” products fairly marginal given the size of many of these corporations, they might also feel the need to compensate for the extra expense by making cuts in other areas of its business, like slashing benefits for workers. The bottom line is still a driving factor. The puzzle is still the same, and certifications can be a way to simply reorganize the pieces.
B-Corporation, or B-Corp, is a certification program run by the nonprofit organization B-Lab. One of its taglines is, “Measuring a company’s entire social and environmental impact,” and it focuses on sustainability initiatives that affect all stakeholders—not just shareholders who stand to make a profit, but also workers, customers, and the environment.
B-Corp certification is, for the most part, well-regarded and highly sought-after. Companies in almost any industry can become B-Corp-certified, and big names in the food and beverage world have already hopped on the bandwagon, from Stumptown Coffee Roasters in Portland to Maker’s Mark, the largest B-Corp-certified distillery in the nation.
I get a lot of emails telling me a business is “bad,” so I wanted to use this article to ask if there’s a way to tell if a company is “good”—or at least “better” than the other options that are available. With the popularity of B-Corp certifications and their focus on holistic measures of fairness and equity, I thought this might be an answer—not necessarily a panacea for all bad business practices, but something that moves us in the right direction.
However, even that feels difficult to draw a line under. I can’t say that B-Corp certification is a total failure (maybe the certification process does create important internal change for some businesses), but it certainly doesn’t seem like all it’s cracked up to be.
First off, we can’t ignore greenwashing, or the practice of selling consumers on a product by making it seem more environmentally friendly than it is. For example: Starbucks engaged in greenwashing back in 2018 when, amidst scrutiny over the use of plastic straws, it made a strawless cap for cold beverages that actually used more plastic than a regular lid and straws (the article notes that the new caps are recyclable while straws are not, but just because an object is recyclable doesn’t mean it gets recycled—and Starbucks then pushes the burden of being environmentally conscious onto the consumer rather than tackling its own wasteful practices). Slapping a B-Corp seal on a product is a way for consumers to feel better, even virtuous, about the things they buy, while potentially obscuring the path those things took to get there.
Secondly, it seems embarrassingly easy to achieve B-Corp certification, and there’s not a lot of oversight once certification is granted. An article from The Conversation states, “Certification is done chiefly over the phone, with around 10% selected for more in-depth review … A business can fill out the initial B Corp Impact Assessment in a few hours, and complete the certification process in between four and eight weeks, finally paying a certification fee of between US$500 and US$50,000, depending on revenue.”
One of the biggest requirements of B-Corp certification is to give equal weight to all stakeholders—and make that commitment legally binding. “Certified B Corporations are legally required to consider the impact of their decisions on all of their stakeholders,” its website states. “The legal requirement ensures that B Corps remain legally accountable to all of their stakeholders - workers, communities, customers, suppliers, and the environment - not just shareholders.”
However, that legally binding commitment isn’t actually legally binding. From The Conversation:
While B Corp claims that certification balances the interests of shareholders with the interests of workers, customers, communities and the environment, B Corp standards are not legally enforceable. Neither the board nor the corporation are liable for damages if a company fails to meet them. Even the changes in company bylaws remain secret.
We’ve also seen B-Corp-certified companies do crappy things. A notable recent example is BrewDog, a B-Corp beer company that has been accused of inspiring a “culture of fear” and has faced allegations of sexual misconduct. BrewDog became B-Corp-certified in February 2021, and although it seems like its status is being reevaluated, it has yet to be revoked. Right now, if someone picks up a can of BrewDog’s beer and knows nothing about the brewery’s ongoing problems, they can still make assumptions about the company’s values.
Being a B-Corp also doesn’t prevent wrongdoing. In 2021, Tony’s Chocolonely, a B-Corp-certified chocolate maker, “admitted that at least 1,700 child laborers were involved in making its confectionery last year.” Tony’s Chocolonely has been B-Corp-certified since 2013.
I think the biggest issue here isn’t the certifications themselves (although there are a lot of problems with the way B-Corp is structured—certifications are done through phone calls?), but the way they force consumers to distill information. You’re supposed to see a symbol printed on a bag or label and accept it at face value, without digging any deeper. It isn’t an invitation to learn more about the process of gaining said certification, but rather a free pass to feel good about the purchasing decision you made. I wonder how many people, when picking up a B-Corp-labeled product, could actually articulate what the designation means.
I know I wouldn’t have been able to. I wrote this article because someone asked me about B-Corps, and I realized that I knew very little about them, except that they were supposed to be good—but I never thought to question what it takes to achieve that certification, and I never would have thought to be critical of them otherwise. I think that’s where certifications fail. Furthermore, if the power of a certification is its ability to signal that a business is somehow worthy, that simplistic designation can also provide cover for a range of other harmful practices nobody would think to question.
Ultimately, certifications are just one tool. They can be misused and misunderstood, and they can also be helpful for the people who care to utilize them well. But when it comes to the end consumer, the best thing we can do is be skeptical of how certifications can simplify issues that are incredibly complex.
It’s also important to analyze who is left out of these certifications, and what that means. If I worked at a company pursuing B-Corp certification that refused to fork over the few thousand dollars it’d take to do something that would make my life easier—say I worked at a coffee shop and the owner refused to give people raises, or buy a tool that would aid in day-to-day operations—I’d question that decision. Perhaps other companies should weigh these choices and focus on making internal changes that aren’t codified in a handy decal.
I’ve mentioned his work before, but in his book, Winners Take All: The Elite Charade of Changing the World, Anand Giridharadas writes about the idea of companies doing less. Instead of embarking on very public social initiatives, can the focus instead be on reducing harm? Ultimately, it’s a question of optics—a company putting its head down and taking care of its employees rarely makes headlines the way that a grand gesture, like a donation to a local charity or a prestigious certification, does.
It’s a shame that these slower, quieter ways of making a real difference aren’t what we routinely celebrate. Until then, I think we have to view certifications as a tool rather than a designation, and be willing to investigate the businesses we interact with.
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Originally, I wrote this line as, “if someone picks up a can of BrewDog’s beer and knows nothing about the brewery’s ongoing problems, they can still look at the label and make assumptions about the company’s values,” but I couldn’t verify if BrewDog actually prints the B-Corp label on their cans. However, they did release a beer called B-Corp…so that’s a choice.
Love when the conversation turns to certifications! A couple interesting points:
- the negative implications of certifying via phone. I definitely get that (could be super easy to be super sketchy) but as a co-owner of a small business in Guatemala, I also understand the costs of certification are REAL. Flying someone in to do the inspection for so many days, having to pay for their time and lodging and everything… it’s made certifications completely out of our reach.
- the mention of recyclable straws pushing too much of the responsibility on to the consumers. 100% agree companies, especially large companies with influence, must be proactive in making changes that are socially, environmentally, and ethically driven so those options are more accessible. However, the realities of the capitalist world we live in make doing responsible business expensive. Consumers have to be the source of change as it is their decision (to purchase) which is the financial incentive and reward, i.e. a business that survives. Maybe I’m jaded but it just doesn’t seem like there are enough consumers who truly care enough to demand that their products do as little harm as possible by being willing to pay for that model. The big box model seems to be winning at every turn. So agreeing that certifications are lacking and consumer’s should educate themselves on what they actually do (and don’t) certify, do you have any ideas on how a small business can communicate aspects of their business and model that they’re proud of without a, shall we say, stamp of approval? Focusing on making sure internal factors are as great as can be is of course excellent, and should be done regardless because that’s just right, however it also is a great way to connect with like minded folks who might support your product. How can those cool values and practice be communicated to help ensure the survival of the business (and therefore those ideal practices)?
PS: Thanks for the great conversations always!
Anyone can go to the Bcorp site and start an assessment. Its free and very enlightening and educational. One thing that becomes clear is how cross cutting ethical business issues are. It’s an excellent tool and the verification process is not accurately portrayed in this article. No mention is made, for instance, of the documentation that must be submitted.