In the Gulf Arab states, a region with a population of over 50 million, there is only one B Corp. Luxembourg, a microstate with fewer than 600,000 people, has two.
B Corps aim to use “business as a force for good,” committing themselves not only to earning profit, but also to addressing social or environmental issues. B Corps are businesses held to a rigorous internationally recognized standard of excellence by social, environmental, accountability, and transparency metrics. They are held to these standards by B Lab, an international NGO. B Corps range from major international companies like Patagonia, Athleta, Danone UK, and Eileen Fisher, to small, local businesses like Washington, DC-based Soapbox Soaps and a Singapore-based snack subscription service, Boxgreen. They work across the globe creating a network of social enterprises and making an impact in their communities and on the world.
Why the Gulf Needs B Corps
Social entrepreneurship in the Gulf is thriving. Companies like Tam, an LLC focused on creating competitive opportunities for innovators, Glowork, aimed at connecting Gulf women with job opportunities, and Organic Oasis, a local organic produce subscription service and health education company, are flourishing. They are helped along by consultancies like C3, which helps social entrepreneurs across the Middle East comply with U.N. Sustainable Development Goals, and incubators like Impact Hub, which guides innovative start-ups and builds a collaborative environment for entrepreneurs.
Given this growing community and strong support infrastructure for social entrepreneurship, why does the Gulf need B Lab? Impact Hub already builds networks of entrepreneurs and supports them in their start-up phases. C3 has already developed a metric to measure the performance of its clients, one that is tied to internationally recognized standards of sustainability.
This existing support system is a strong foundation that has helped many of the Gulf’s social enterprises achieve their social goals. But, these organizations do not hold the same international recognition and clout that B Lab does. B Corps have been discussed widely, in publications like The New Yorker and Forbes, and are recognized by the global business community, becoming an ingrained part of some business schools’ curricula. Becoming a B Corp also expands the network of Gulf social enterprises to encompass a community of nearly 2,000 businesses around the world. Social enterprises in the Gulf could benefit from this global network for collaborations, to facilitate entry into new markets, and to gain advantages from lessons learned.
Further, B Lab can fundamentally improve the way Gulf social entrepreneurs do business. To become a B Corp, a business has to pass rigorous testing. Companies that meet the threshold work with B Lab to chart a path for greater social impact and sustainability. A central piece of this is determining the business’s corporate structure and the appropriate legal framework for its operation. To ensure that they maintain B Lab’s standards, B Corps are audited every two years.
This rigorous process not only ensures that B Corps are doing their utmost to benefit the community and world around them, but it also presents a unique opportunity for Gulf governments to update their legal frameworks to make room for social enterprise. In the United States, the benefit corporation, a legal framework for companies to incorporate with an explicit commitment to social responsibility, in addition to profitability, is recognized by more and more states.
Similar legal frameworks are being developed globally to accommodate the growing number of social entrepreneurs. In 2015, The National called on the UAE government to make such a legal distinction, stating that many social entrepreneurs are incorporating as limited liability companies because there is no legal framework into which they can fit neatly. Because becoming a B Corp entails working with B Lab to determine the appropriate legal structures under which to incorporate, a boom in B Corps in the Gulf could put pressure on governments to address this gap in the legal system and protect the missions of Gulf social entrepreneurs. In addition, B Lab’s expertise could help Gulf governments determine how to build the appropriate legal framework for social enterprise.
Why B Lab Needs the Gulf
B Lab has partners in over 60 countries and is represented across six continents, but with only one registered B Corp in the Arab world, Marmalade Fish, headquartered in Dubai, with outposts in Hong Kong and London. The company has also partnered with major entities in the region, like Careem, the Oman Oil Company, and the Emirates Nuclear Energy Corporation, in addition to key global players like Merck and HSBC. Marmalade Fish’s notable global success is instrumental to B Lab’s own, and the Gulf has the potential to produce many similar success stories.
B Lab could also benefit from the youth population in the Gulf that is already building a thriving social enterprise scene. This large, diverse pool of talent and ambition can no longer rely on government jobs, creating a fertile breeding ground for social enterprise found in few other places in the world.
In addition, the strong culture of philanthropy in the Gulf states is highly conducive to a thriving community of B Corps. According to the Arab Giving Survey, 90 percent of the Gulf’s population made charitable donations in 2016. But, there is a gap in trust between charitable organizations and donors, largely because donors do not have a clear picture of where their money is going, particularly with Gulf charities. B Corps are required to be highly transparent, allowing investors to see exactly where their money is being spent. Investors also have the ability to earn their money back with a dividend. This dividend could be achieved through commonly used Islamic banking practices to avoid the payment of interest.
What B Corps Can Build
B Corps across the globe are using business to make pressing changes. They help contribute vital services to developing countries, promote environmental protection, address social and humanitarian issues, and support and guide other socially conscious businesses. They could play the same role in the Gulf states at this pivotal time. The Gulf already has a foundation in its existing community of social enterprises, but it could be expanded and elevated, truly using business as a force for good.