It’s Time For Your Business to Become ‘Good for Michigan’

 

Metro Detroit’s economy has been steadily growing since the Great Recession of 2008. Detroit Future City reports that the local economy has nearly rebounded, particularly with regard to the increase in the number of jobs as compared with those that existed in the region in the early 2000s. However, despite the growth in the region, the report outlines how jobs alone have not been enough to create genuinely equitable outcomes for people of color in the region.

 Research on building a more inclusive and equitable economy in Detroit has often focused on equitable hiring practices, increasing accessibility to different job opportunities, providing training and educational support, and other such initiatives. Arguably, omitted from the equation is the role of business structures used for economic growth and their ability to impact economic equity. Considering about half of Detroiters are employed by small businesses, the structures of these businesses play a vital role in the growth of an inclusive and sustainable economic environment in Metro Detroit.

So you must be wondering, what can your small businesses do to not only signal its commitment to equitable economic growth, but be a part of the change? It’s simple: be Good for Michigan and strive to become a certified B-Corp. 

The Certified B-Corporation 

            For-profit businesses are able to be certified as a B-Corporation, or B-Corp for short. If your company meets a certain high standard of social, environmental, and economic impact, it is considered as "doing good” and may be able to receive a B-Corp certification. It is a certification available worldwide. 

Who Certifies a Company as a B-Corp? 

The non-profit organization B Lab certifies all B Corps. It is an organization that “foster[s] and mobilize[s] a growing community of people and businesses working towards a more fair and inclusive economy in the United States.” B Lab, thus, not only recognizes businesses that balance both profit and purpose of making a positive impact, but also provides credibility to businesses operating in an increasingly scrutinized economy. B Lab’s process of certification ingrains corporate social responsibility in accessible ways, allowing businesses to remain competitive. 

How Do I Get Certified?

            The first step to becoming a B-Corp is to take the B-Impact Assessment. By scoring at least 80 (and a recommended 85) on the assessment, your business can become eligible to undergo a review by B-Lab for certification. For businesses with a gross annual revenue of less than $500,000, the submission fee is $150. 

During this second stage, B-Lab will not only verify that you meet their standards for social and environmental responsibility, but they will also ensure that your company meets their legal framework requirements. Specifically, B-Lab will verify that your business has made a legal commitment to all of its stakeholders through the rules governing your jurisdiction. For example, Limited Liability Companies and cooperatives can include such language in their operating agreements. Generally, S and C Corps must first register as a benefit corporation. However, Michigan does not recognize benefit corporations under state law, and so this requirement need not be fulfilled.

 Finally, B-Lab will review that your business meets transparency requirements, including that you have published your company profile and Impact Report in the B-Corp Directory. After submitting all necessary documentation, your company will be certified for three years until the renewal process begins. For businesses with a gross annual revenue of less than $500,000, the annual certification fee is $2000.  

Is There an Alternative Path? 

            If the national B-Corp certification process seems daunting or too far out of reach based on the status of your business, you can opt to become a locally Good for Michigan business. Good for Michigan is B Lab’s B-Local community group — the localized partner of the national organization. Good for Michigan allows companies to use the benchmarking tools that B-Corps use without the formal certification process. You may even choose to become Good for Michigan as a first-step in becoming a certified B-Corp in the future. 

            To become Good for Michigan, your business must either finish 25% of the B-Impact Assessment, or complete the SDG Baseline (a confidential tool that allows you to assess your impact based on the United Nations’ goals for sustainable development).

             You will then review your assessment results and make individualized business goals to improve your social impact and sustainability. The Good For Michigan organization will connect you with resources to help with specific impact areas and connect you with other businesses working towards similar goals.

             For a detailed review of the process, watch this Good for Michigan’s training. 

 (https://www.youtube.com/watch?v=mZVFrnxCHdw)

  What’s the Big Deal Anyway? 

            You may be wondering what any of this will do for your business — what tangible benefits does being a B-Corp have or being Good for Michigan have? Firstly, doing so signals to consumers in a credible way that your small business is working to be sustainable and equitable. Millennials and Gen-Z make up 43% of the U.S. population and 49% of the global population. Not only do Gen-Z shoppers demand sustainability, even willing to spend 10% more on sustainable products, but they also want to shop with companies that ensure employee and consumer safety. 

            Studies also show that workers are choosing to work for companies that reflect their values. Millennials, who will make up 75% of the workforce by 2025, look for businesses that focus on social responsibility. According to the Core Communications Millennial Employee Engagement Study, not only would 64% of Millennials not take a job if their employer doesn’t have a strong corporate social responsibility (CSR) policy, but 83% would be more loyal to their company if it contributed to environmental and social issues. 

            In addition to attracting employees and consumers, becoming certified also ensures your business is built on a solid legal foundation for the long-term. According to McKinsey, investment professionals would pay a 10 percent premium to acquire a company with a positive record on environmental and social issues. A B-Corp certification can effectively increase the value of your company. And, B-Corp certified businesses are 63% more likely to survive a recession.

By: Kavitha Babu