The Problem with B Corp ‘Conscious Capitalism’

You may have seen the letter “B” within a circle on the packaging of brands such as Horizon Organic, Silk, or Ben & Jerry’s. You’ve noticed this logo on websites ranging from arts and entertainment company Meow Wolf to the beloved outdoor clothing and gear company Patagonia. The symbol represents that the company is a certified B Corp, or a for-profit corporation certified as such by the nonprofit B Lab. You reach for these products and pay for these services because you want to support a social mission, not destroy the environment, and think workers should be taken care of. You believe that we need to be doing business better.

B Lab was founded in 2006 and has since served as the overseeing certifying body for B Corps. They determine, set, and regulate the standards of operations, social and environmental performance, public transparency, and legal accountability that certifying corporations need to adhere to. As of 2022, 5,000 companies collectively pay millions of dollars to B Lab in annual fees for certification and marketing. Their dues also contribute to the salaries of the Standards Management team, which conducts investigations into companies following stakeholder (worker and/or community) complaints.

B Corps claim to support and imagine a new economy, by balancing social, environmental and financial responsibilities. But as the pandemic has revealed the deepest levels of inequity, and with fresh waves of workers advocating for better labor rights, it’s become clear that the dreamy, triple-bottom-line ideology that B Lab has propagated doesn’t actually exist. B Corps may “consider” stakeholders such as workers, communities and the environment in their decision making, but at the end of the day, they are actually accountable, like all corporations in a capitalist system, to only a financial bottom line, which begs the question: Are B Corps the best version of conscious capitalism? And if they’re not, what could replace it that actually has workers, social equity, and the planet in mind?

“To continually idealize B Corps as a way to do good through capitalism, is still perpetuating a system that does not adequately distribute wealth. To dress it up is just slicker marketing,” said Gina Maciuszek, writer and former employee of Meow Wolf.

Meow Wolf, for instance, followed the movement to B Corp certification in 2017, scoring enough points within the Governance, Workers, Community, Environment, and Customers, categories of a confidential assessment to earn B Corp status. At the time, they said they “firmly believe that accomplished artists must be compensated on an equal level with other skilled, in-demand professionals.”

Meow Wolf Workers Collective (MWWC) Organizing Committee member Carrie Taylor came to Meow Wolf from the nonprofit theater world in Chicago, after years of struggling to make a living wage in the arts. But three years after certification, Meow Wolf employees formed the MWWC, joining the Communication Workers of America Local 7055, precisely because the company was not supporting their employees’ well-being.

“There’s this unspoken rule when you’re working in the arts that you’re doing more than a job, or that you’re participating in a movement, which I think is true to some degree,” explained Bargaining Committee member Emily Markwiese. “But I also think that narrative and that rhetoric causes people to look past the fact that they often don’t have basic worker rights. It was time for a really critical look at the working conditions of creative workers in our country.”

Labor activist and organizer Puja Datta agrees. “Most people get paid very little money, and they’re told, Well, you should just be happy to be doing this job because you’re doing it for the movement, or you’re doing it for people, or you’re doing it for the love of making art or whatever the excuse is, right? People are just told bullshit. They’re gaslit.”

When issues of collective leverage come up, B Corps position themselves as an alternative to unions. In 2020, Meow Wolf’s co-CEOs at the time, Ali Rubinstein, Carl Christensen, and Jim Ward, referred to their B Corp status as the reason a union was not necessary. “The policies, practices, and culture already in place make our company a great place to work and we value our ability to work directly with employees. As such, we feel Meow Wolf works best without a union.” This anti-union language is common among corporations, B Corp or not.

On Labor Day 2021, Meow Wolf made waves when a picture of a HR job posting from Paylocity circulated across social media. One responsibility of the position read: “Labor Relations and Union Avoidance. Effectively manages labor union relationships and implements effective union avoidance campaigns in union-free parts of the organization.”

This isn’t an anomaly. Each B Corp assessment includes a “Disclosure Questionnaire” where companies are asked questions, such as “Has your company taken a public stance against unionization, engaged in activities that may be perceived as taking a stance against union organizing, or prohibits workers from freely associating and bargaining collectively for the terms of one’s employment?”

It is unknown what disclosures or accountability Meow Wolf has made to B Lab, since none exist on their directory page. In fact, none of their lengthy public litigation or arbitration history is disclosed there either. B Lab has not reached out to MWWC in the year-plus since they formally became a union; not even when MWWC filed unfair labor practice charges against Meow Wolf with the National Labor Relations Board at the end of 2021.

Datta explains that workers need the ability to collectively bargain for themselves because they are the only ones truly invested in what’s happening to them. “There’s no one that’s in it to advocate for the worker except for the worker themselves,” she says.

After 16 months of being stalled at the negotiating table on issues largely concerning money, the Meow Wolf Workers Collective signed their first contract March 18th. This win for workers didn’t occur due to benevolent B Corp bosses and CEOs; it was fought for tooth and nail by the workers themselves.

Employees aren’t the only ones left out of the B Corp balancing act of profits and people. Independent suppliers, contractors, and in the case of Danone North America, farmers, are deprived of collective organizing rights. In 2018, the $10 billion valued Danone North America was certified by B Lab, becoming the world’s largest B Corp. Danone’s North America’s portfolio covers brands familiar to conscious consumers in health food aisles, such as Silk, So Delicious, and Horizon Organic. Falling under a parent umbrella in the Danone North America B Corp assessment, Horizon is a recognized B Corp unto itself and has a roster of 89 organic dairy farms across the Northeast who act as suppliers.

In August 2021, Horizon Organic sent a letter to those dairy farms, announcing that their contracts would come to an end in 12 months. Cloaked under the greenwashed rhetoric of “reduced footprint”, Horizon would be moving to large-scale industrialized Midwest operations and leaving the Northeast small dairy farms that span from Vermont to New York. Farmers were left with no individual leverage, unable to speak out (some being directly warned to not speak on social media), or be at risk of losing the remaining months of contract, according to Nicole Dehne, certification director for the Northeast Organic Farming Association of Vermont.

Dehne said the impact of Horizon’s decision underscored how beholden these farms are to these corporations. “They have no power. They really don’t have any other options.” she said.

Small to medium-sized producers of organic milk, the very narrative and image that Horizon and Danone are selling, will be put out of business. And unbeknownst to consumers intending to align their values with their spending, in a year’s time, they’ll begin to support a massive 14,000 cow industrial dairy operation that utilizes agri-business loopholes.

The farmers impacted by Horizon Organic with support by Northeast Congressional Members, Reps. Peter Welch (D-VT), Chellie Pingree (D-ME), Jared Golden (D-ME), and Annie Kuster (D-NH),

utilized B Lab’s external complaint filing system, submitting a formal complaint, and further, requested reinstatement of their contracts. In December 2021, following B Lab’s private investigation, they received a decision statement. It read, “We have determined that Danone North America’s certification is upheld with disclosure of this situation required on its B Corp public profile in order to be transparent with stakeholders around the reasoning for and impacts of its decisions and document the management practices in place so that stakeholders can make their own informed judgment about its impact and the adequacy of measures taken.” This disclosure was added here. The internal investigation was not transparent and was decidedly closed.

Since this announcement, Horizon has made a few closing concessions including extending contracts for an additional six months. The farmers have lost and the integrity of the organic label will degrade.

The issue at hand isn’t isolated to Meow Wolf and Danone. The problem lies in the fundamental makeup and foundation of B Corps and the idea that conscious capitalism is possible.

“There is no profit to be made when you think about trying to make a worker’s life better,” Datta says. “Paying more for your workers to have more money, more benefits, more time off… It takes away from the end result, which is the profit that you’re making right? It hurts their bottom line to think about what’s best for the workers.” In short, the idea of conscious capitalism from a business perspective is fundamentally at odds. Instead, we have to introduce a new paradigm that is outside of the container of capitalism altogether.

“If you’re working with a toxic rotten model, it will always come back to monetize every last thing that is sacred and special.” says Maciuszek.

There is no consciousness within a capitalist economic system. We can however, actually create new economies predicated upon mutual aid, equitable distribution and allocation of resources, and worker ownership models. We can hold producers responsible for the life cycle of environmentally destructive practices and products. We can call out neo-colonial businesses and shut down our financial support of them. We can imagine non-hierarchical ways of structuring new models for our labor and collective capital. We have to believe that another way is possible.