Taiwan’s growing number of B Corporations are embracing rigorous certification standards to prove that profitmaking can go hand-in-hand with social and environmental impact.
Writing this article is somewhat of a full-circle moment for me.
Back in February 2017, my previous employer and AmCham member Winkler Partners became the first law firm in Asia to be awarded B Corporation certification. At the time, just 17 companies in Taiwan had received the certification from B Lab, the U.S. nonprofit organization in charge of granting it. The “B” stands for benefit, representing the positive social impact of companies.
In August 2016, our coordinating partner Peter Dernbach returned to the office from an AmCham luncheon held with three of Taiwan’s earliest B Corporations and asked me to investigate what certification would mean for the firm. It was the first time I’d heard of B Corps. After doing some preliminary research, I found that it seemed to fit well with the firm’s mission.
We spent months collecting data on employee compensation and benefits, the number of hours of professional training we provided, amounts donated to charities, energy usage, carbon emissions, and a variety of other factors. Some data was readily available, while other data points necessitated back-and-forth explanations of the required information and who was responsible for finding it.
All this information was needed to complete the more than 200 questions included in the Business Impact Assessment (BIA), the platform developed to evaluate companies’ performance. Hopefully, we would reach the 80 points required for certification.
The BIA is divided into five categories – Governance, Workers, Community, Environment, and Customers – and evaluates a company’s impact on each of these areas. Points are progressively scored based on the answers provided. Critically, companies must submit supporting documentation. Further explanations and supplementary evidence are often requested by the B Lab reviewer assigned to the company. Once a company has passed the review, it can officially join the list of more than 7,000 certified B Corporations worldwide.
Reassessments take place every three years with the expectation that companies will work to improve their performance over time. All scores are publicly available on B Lab’s website, showing the breakdown for each area and the progression of total scores. Accountability and transparency are important to keeping companies honest about their performance and are one of the ways the B Corp movement aims to distinguish itself from unverifiable self-reported CSR projects or more nefarious greenwashing.
For inBlooom, a popular textiles and lifestyle brand that achieved certification in September 2022, moving through the certification process was both rewarding and difficult. “There were times when we felt quite disheartened, as we thought we were already doing quite well,” says inBlooom Co-Founder and Creative Director Yi-Yu Shen. “Yet when we applied the B Corp metrics, we realized that we weren’t as exemplary as we imagined. To be candid, it can be a somewhat discouraging process. However, this also fueled our motivation to improve.”
Premium skincare and soap brand Yuan obtained certification in April 2023. CEO Chiang Jung-yuan says that achieving certification brought a sense of enormous pride and was an important milestone for the 18-year-old company.
“Now when I give out my business card, people ask about the B Corp logo next to my own, and they are curious about the certification process,” says Chiang. “They realize that Yuan’s brand image is not just puff pieces on the Internet, but our reality.”
Despite the difficulties of obtaining certification, the movement has caught the attention of some of the world’s largest brands. Ben & Jerry’s ice cream, outdoor clothing brand Patagonia, dairy producer Danone North America, and online education platform Coursera are some of the more recognizable multinationals that have obtained certification. But although these global brands headline the movement and bring it visibility and credibility in the boardroom, the vast majority of B Corps are small and medium-sized enterprises.
While Europe (3,200) and North America (2,000) lead by the number of certified corporations, B Corps are present in 160 industries in over 90 countries. Joining this global movement earlier than its neighbors, Taiwan currently boasts 46 certified organizations and is projected to reach 50 by the end of this year.
B Lab Taiwan, the official nonprofit partner of Pennsylvania-based B Lab, explains that companies thinking of becoming a B Corp must be strongly committed to completing the process. Certification often takes more than six months to complete. When asked, most Taiwanese B Corporations say that their main desire to achieve certification is to identify potential areas of improvement.
One of these companies is sustainable footwear brand Ccliu, which was certified in November 2022. CEO Wilson Hsu says that the process helped his company pinpoint areas where the company could do better.
“We were already on the right track because our business model is structured in a way to contribute back to society and the environment, and our products are made of recycled or upcycled materials, but where it helped us was when we looked at our systems and management,” he says. “Meeting structures, workflows, the number of managers who are female or minorities – we still have a lot to improve to get a much better evaluation.”
“The decision to apply for certification was the easy part,” says inBlooom’s Shen. “Since we founded the company, our ethos has been ‘good for us, good for the earth.’ However, the textile industry is a sector that significantly depletes social and environmental resources. We aspire to have our designs not only craft ‘beauty’ but also ensure that the production process adheres to ethical and sustainable principles.”
And it’s not hard to see why this approach also makes good business sense. In a 2023 study conducted by National Cheng-chi University, 54.8% of Gen Z (those born between the mid-1990s and 2010s) reported knowing what ESG (environmental, social, corporate governance) meant. Most respondents said they would accept paying up to 10% more for environmentally friendly products. Consumers were most concerned with the environment (45%), followed by social responsibility (38%) and corporate governance (18%).
Similarly, a 2022 report by Tatler Asia magazine found that people in the region placed higher value on issues with a purpose, such as female empowerment, sustainability, equality, LGBTQIA+ rights, philanthropy, and entrepreneurship. For many businesses, enhancing and promoting their social and environmental credentials can mean an expanded market share, elevated brand image and awareness, and increased revenue. Hsu says that while the sustainable footwear sector is currently only worth 2.4% of the total US$ 498 billion footwear market worldwide, it is growing much faster, at around 9% a year.
For Taiwanese companies that may struggle to complete the BIA on their own, help is on hand. B Lab Taiwan in 2021 initiated an accelerator program to assist companies attain certification. In comments provided to TOPICS, the organization said that its accelerator program can reduce the certification process to an average of three months. Workshops, mentoring, information sessions, case studies, and Chinese language materials are provided to companies in need of support.
And this support is critical for many companies, particularly the many SMEs with limited resources undergoing the certification process. Some of these companies are also under pressure to improve their sustainability performance by customers further up the value chain. Others operate in the fast-moving consumer goods market and want to attract shoppers to their more environmentally friendly product offerings.
“I believe that B Corp offers a tangible framework to guide us toward becoming a ‘better’ company,” says Shen. “InBlooom lacked measurable benchmarks. Once we worked through the BIA assessment questions and with guidance from B Lab Taiwan, we now have a clear structure. We know how to enhance various aspects of our company’s operations and have set standards for self-improvement.”
Yuan’s Chiang says his company utilized the BIA standards to identify areas of self-improvement. Yuan now sources more than 50% of its materials within an 80-km radius of the company’s Tamsui headquarters in New Taipei City. Doing so supports local suppliers and their immediate community and reduces the brand’s carbon footprint.
Beyond quantifiable metrics, the B Corp community offers camaraderie among its members. “Everyone is from different industries and backgrounds, but the common thing is that everyone has the same heart and the same goals,” says Ccliu’s Hsu. “There’s a lot of knowledge and other information we can share among each other. Right, and we learn from each other, and we keep developing, in order to be even better companies.”
Besides Ccliu, inBlooom, and Yuan, a list of Taiwanese B Corps on B Lab’s website shows a variety of industries represented, from household name brands like Greenvines, Chatzutang, Come True Coffee, and O-Bank to a Kenting-based dive school, a family-run accounting firm, a vegan restaurant in Taipei’s Guting area, a renewable energy company, and a veterinarian-founded dairy producer.
Fundamentally, B Corporations differ from other organizational types that aim to do good. Unlike non-governmental organizations, they are profit-seeking. The social or environmental good of B Corps is a secondary goal alongside profitmaking, and they are not accountable only to shareholders but must also consider the impact on all stakeholders in decision-making.
In many places, there is a legal distinction between benefit companies and regular enterprises. Since legislation was first passed in Maryland in 2010, benefit corporations now exist in state corporation laws of thirty-five U.S. states and the District of Columbia, as well as in Colombia, the Canadian province of British Columbia, Italy, and the United Kingdom.
Companies incorporated as benefit companies must submit to audits by the authorities much like public companies do. There is also a set of legally defined requirements for companies to follow and penalties for those failing to comply. For companies operating in jurisdictions without a legal framework for benefit corporations, certification provided by B Lab remains a compelling alternative.
To ensure that B Corps remain beneficial, B Lab revokes certification for companies that don’t live up to the spirit of the movement. Such was the case for British craft beer brand BrewDog, which lost certification in 2022 after employees reported a “culture of fear” and bullying by management.
While the Taiwan government has made efforts to recognize and support new business types, it has stopped short of including benefit companies in legislation. The Company Act was amended in 2018 to include wording that a registered company “may take actions which will promote public interests in order to fulfill its social responsibilities.” Though not defined or enforceable, the step was seen as encouraging businesses to think more about their impact on society and the environment without providing for a separate business type under the law.
In terms of government support for businesses that wish to fulfill their social responsibilities, B Lab Taiwan notes that help is available through the Ministry of Economic Affairs’ Small and Medium Enterprise and Startup Administration and Energy Administration. However, these programs tend to focus on environmental performance, and support for social and governance aspects is lacking.
Hsu is hopeful that more companies will consider certification but says that for Taiwan’s manufacturing base, it will take a lot of persuading.
“Most manufacturing businesses focus on increasing production, and lowering costs,” he says. “This is the nature of traditional manufacturing.” Many manufacturers will likely question whether they have the time and resources to also care for their community and the environment. “But don’t they realize this is all tied together?”
InBlooom’s Shen encourages companies that don’t intend to pursue B Lab certification to still utilize the BIA and associated tools as a means to benchmark themselves against other companies.
“Companies often tend to believe that they have already done enough, or are doing well, and may use rhetoric or marketing techniques to make themselves appear better than they really are,” she says. “The BIA serves as an honest mirror that allows companies to measure their actual performance. Of course, if a company is inclined towards a sustainable direction, pursuing B Corp certification is undoubtedly a valuable goal.”