Hartford Business Journal

10 HARTFORDBUSINESS.COM | JULY 24, 2023 Jenn T. Grace is the co-founder of B Local Connecticut, an organization that aims to increase the number of certified B Corp businesses in the state. HBJ PHOTO | SKYLER FRAZER Double Bottom Line Nearly a decade after CT established benefit corporation legal structure, few companies embrace it By Skyler Frazer sfrazer@hartfordbusiness.com W ith the state's benefit corporation law nearing its 10th anniversary, a new nonprofit is hoping to boost the number of for-profit companies that want to double-down on their commit- ment to social and environmental good by becoming certified B Corps. But advocates of the business type and certification may face an uphill battle. Nearly a decade after Connecticut legalized benefit corpo- rations, only 241 companies have adopted the ownership model, which requires businesses to do things that generally benefit society and the environment, or create specific public benefits. And just 26 companies in the state are certified B Corps, an additional process that requires businesses to formally commit to certain social and environmental goals through a third- party assessment and certification. While some nationally recognized brands such as ice cream maker Ben and Jerry's and outdoor-clothing retailer Patagonia are certified B Corps, just a few dozen Connecticut businesses have gone through the process, including some well-known names like Athletic Brewing, Bigelow Tea and Ideal Fish. B Local Connecticut formed in September 2022 to try to change that. The nonprofit provides networking and consulting services with the goal of increasing the number of certified B Corps in the state. "We have two target audiences," said Jenn T. Grace, co-founder of B Local Connecticut. "People who know what a B Corp is and want to be somehow involved in the space. And then there are the folks who we call 'B curious,' who are curious about what it means to be doing business sustainably, or what it means to be environmentally conscious, and putting those choices at the center of the decision-making process within your business." Supporters of B Corps and benefit corporations say they're a good way to highlight and promote a company's commitment to social entrepreneurship. However, some say the complexity of the legal structure and hurdles for official certification outweigh the benefits. Businesses can pursue their commitment to social responsibility without the designation, critics say. "I think there are other ways to do it now, and other ways to take advantage of all our learning over the past ten years since the statute was first passed," said Nancy Hancock, a business attorney with law firm Pullman & Comley. "A well-run corporation now takes into account stakeholders in addition to its shareholders quite routinely." B-corp vs. Benefit corporation There are two different socially-con- scious designations Connecticut for-profit companies can consider. B Lab is an international nonprofit that certifies businesses as B Corps. To qualify for the designation, compa- nies need to submit assessments that meet "verified standards of social and environmental impact," such as having recycling or donation initia- tives and diverse hiring programs. Certified companies also have to commit to transparency requirements related to their business' impact and operations, and be legally accountable to all of their stake- holders — employees, suppliers, the community, etc. — not just investors or shareholders. Companies must recertify every three years to make sure they're living up to their commitments; there's also an annual certification fee based on a company's gross revenue. The fee starts at $2,000 for companies with up to $4.9 million in annual sales. "Basically, the certification is really a forcing function," Grace said. "They have a very rigorous process that tracks and measures everything that you are doing in your company that has a direct impact to either socially-responsible practices or environmentally-responsible practices." Grace opened her Hartford-based for-profit publishing company, Publish Your Purpose, in 2015, and quickly became interested in becoming a certified B Corp, she said. She connected with Jenifer Gorin, founder of consulting firm Impact Growth Partners, to learn more about the certification process, and was certified in 2020. Grace, Gorin and Kerrie McDevitt, also of Impact Growth Partners, eventually partnered to co-found B Local Connecticut as a direct affiliate to B Lab. As a book publisher, one way Grace's company fulfills its envi- ronmental mission is by promoting electronic and audiobooks to reduce paper consumption. A benefit corporation, on the other hand, is a legal business structure that Connecticut permitted in 2014. It has many of the same principles as a B Corp — legally requiring a Nancy Hancock

• Cover