They sold their company and watched every social commitment vanish within months.
In the 1990s, Jay Coen Gilbert and Bart Houlahan built AND1, a basketball footwear company that became the second-largest brand in its category by 2001.1 The company offered on-site yoga classes, generous parental leave, widely shared ownership, and donated five percent of profits to local education charities. When the founders sold the company in 2005, every one of those commitments was stripped away within months.
The experience revealed a structural problem. Corporate law in the United States was widely interpreted as requiring company directors to maximize shareholder value.1 A company's social or environmental commitments had no legal protection once ownership changed hands.
Gilbert, Houlahan, and Andrew Kassoy founded B Lab in 2006 as a nonprofit organization in Berwyn, Pennsylvania.1 The "B" stood for beneficial. B Lab created a certification system requiring companies to meet verified standards of social and environmental performance, accountability, and transparency.
The B Impact Assessment measures a company's impact across five areas: governance, environment, workers, customers, and community.2 Companies need a minimum score of 80 out of a possible 200 to certify.3
B Lab also pushed for legal infrastructure. Beginning in 2010, states began passing benefit corporation legislation, creating a new corporate form that legally permitted directors to consider stakeholders beyond shareholders.4 By the early 2020s, benefit corporation statutes had spread to dozens of U.S. states and several countries.
Certified B Corporations include Patagonia, Ben and Jerry's, and Danone North America. As of 2026, the B Corp community included more than 9,000 certified companies in over 100 countries and 162 industries.5