How To Evaluate Impact In A B Corp

The B Corp is distinct from a traditional corporation in two key ways.

First, the purpose of the company is much broader, shifting from a narrow pursuit of pure profit maximization to creating benefit for all stakeholders.

Secondly, B Corps have a higher standard of transparency and accountability regarding their social and environmental performance.

All B Corps are required to report their social and environmental performance through their annual benefit report. This annual benefit report is an opportunity for a B Corp to transparently share how they actually performed socially and environmentally with their stakeholders and the public.

In most states, B Corps are required to measure their social and environmental performance against an external standard, known as a third-party assessor. These third-party assessors have essentially created an objective set of metrics to quantify a company’s social and environmental performance. Think of it as measuring yourself with a yardstick created by experts.

There are a number of these third-party assessors, and the B Corp is free to choose whichever they like. Some are free and some require a fee.

In Colorado and Delaware, you can choose to measure your purpose however you want, either with a third-party assessor or by creating your own custom evaluation tool. But, you are required to measure the purpose and share the results in your annual benefit report

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