B Lab: Building a New Sector of the Economy

Abstract

The founders of B Lab are on a mission to create a new sector of the economy, and are specifically focused on a three objectives: 1) building a community of Certified B Corporations (B=Benefit) that legally expand their corporate responsibilities to include consideration of diverse stakeholder interests, 2) advancing the public policies necessary to create a new corporate form called a Benefit Corporation, and 3) creating an investment rating system to help drive institutional investment to the emerging asset class of "impact investments." The case considers the challenges associated with achieving each one of these objectives, let alone all three at the same time. Is B Lab's tripartite strategy its secret sauce or its albatross?

Learning Objective: To understand processes of institutional change and the challenges of balancing social benefit and business value.