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B Corps

The B Corporation community has enjoyed a huge rise in popularity since the original B Corp was formed in 2007. There are now almost 4,000 B Corps in existence across 74 countries, including American giants Eileen Fisher and Ben & Jerry’s.  But what is a B Corporation? Should you consider becoming one? How does an entity become B Corp certified?

What is a B Corp?

Certified B Corporations are any form of business enterprise (including LLP’s, partnerships and sole traders) verified by B Lab, a non-profit organisation, which are designed to meet the highest standards of verified social and environmental performance.

The purpose of B Corporations is to accelerate a global culture shift to redefine what  ‘success’ means for a business. The idea is to build a more inclusive and sustainable economy which focuses on: creating value for non-shareholding stakeholders, creating a positive impact for employees, public transparency, and legal accountability to balance profit and purpose. B Corp status allows an entity to demonstrate at a glance that it operates with a different ethos to traditional corporate philosophies.

Should we considering becoming a B Corp?

Becoming a B Corp can have many benefits, such as a positive impact on brand equality, greater recruitment and investor appeal, and more favourable publicity. It can also provide some less obvious benefits such as increasing how ‘sellable’ an entity is (not least because the rigorous vetting process means an entity’s house is likely to be in order when it comes to due diligence).

There is also increasing evidence supporting a strong economic rationale for B Corps. Consumers are increasingly driven by sustainability, and companies who are able to demonstrate high standards of ethical responsibility are consistently out-performing their competitors in a number of markets. As the economic impact of these ‘conscious consumers’ continues to become more apparent, so the turnover and value of B Corps increases. Developing a relationship of trust between companies, ethical consumers and investors ultimately drives more opportunities for growth through employment and investment.

How do we become a B Corp?

B Corporation status can only be achieved by receiving accreditation from B Lab. There are 5 ‘areas of impact’ that are assessed: Community, Customers, Environment, Governance and Workers. For certification to be granted an aggregate  score of at least 80 (out of 200) must be reached (each impact area is assessed independently with each area contributing towards the overall target of 80 points, meaning an entity must excel in multiple areas to achieve certification).

The first step is to complete an on-line assessment (called a B Impact Assessment). After completing this assessment, B Lab then assesses and verifies whether an applicant’s score meets the certification standards.

As part of this process, you meet virtually with the B Lab team to submit any confidential documentation and also to run through each of your responses to the assessment. Next, each applicant completes a disclosure questionnaire which gives a corporation the chance to be transparent about any sensitive issues it may have. From there, B Lab carries out a final background check on the corporation in regards to its public records.

The application process is rigorous and requires a degree of ‘soul searching’. It is not to be undertaken lightly, but nor is the expectation to ‘pass first time’. More often than not, accreditation involves resubmissions in a number of different areas of impact, and B Lab encourages an open dialogue as to how to address any concerns or issues. There is no stigma (or publicity) attached to failing.

Once passed, accredited entities are listed on the B Corp register, and are entitled to display the B Corp stamp on their products and materials, indicating to customers and stakeholders they can trust in its practices, and affirming an entity’s place in a community of forward-thinking companies adapting to a more socially conscious business world.

Certification is not particularly expensive, with annual fees starting at £500 and scaling upwards depending on revenue. That said, if you’re considering making an application, don’t underestimate the amount of internal management time needed to commit to the process. Certification must be renewed every three years.

If you would like any more information on B Corps or how they are formed, please contact Eoin Broderick on +44(01892) 765 410.

Posted in: Business