In an area such as ESG, full of complexities, the B Corps movement emerges as a model to be followed by implementing a methodology that links business to positive socio-environmental impact.
By bringing together a certification and a movement of companies, the B Corporation is increasingly becoming a synonym for a new reality, where society demands environmental, social, and governance responsibility from businesses.
But after all, what is a B Corporation and how can I become one?
What is a B Corporation?
A B Corporation is a new kind of business that balances purpose and profit by considering the impact of its decisions on its workers, customers, suppliers, community, and environment.
B Corporations are committed to a continuous development plan, which moves from the idea of harm reduction to a logic of positive impact generation.
Here, the power of business is at the service of building an inclusive, equitable, and regenerative economic system for all people and the planet.
What is the B Lab?
B Lab is a non-profit organization responsible for coordinating the B Corps Movement and organizing the certification of companies. It operates globally, but has local partners in several regions of the world.
The goal of the B Corporation Movement is to “Redefine the concept of success in the economy and in business.” An economy in which success is measured by the well-being of people, society, and nature.
Worldwide there are more than 5 thousand certified companies, and more than 100 thousand companies have used its platform to evaluate their impact.
How to become a B Corp?
To become a B Corporation, a business must meet the following requirements:
- Achieve more than 80 points in the B Impact Assessment, a platform for evaluating a company’s social and environmental performance.
- Make its B Impact Assessment score transparent in the B Corporation directory.
- Make a contractual change, inserting the B clauses that guarantee the company’s commitment to go beyond its financial and economic interests in its decision-making. The company reinforces and protects its mission to commit to social and environmental responsibilities throughout its operations.
- Be a for-profit entity.
- Have more than 12 months of operations, as the evaluation takes into account the last fiscal year. (Note: Companies with less than 12 months of operations can apply for the Pending B Corp seal.)
- Operate in competitive markets, not acting as a monopoly or being controlled by the government.
B Impact Assessment
The B Impact Assessment is a tool developed by B Lab to measure a company’s social and environmental performance, considering all its stakeholders. Through an open, online, free, and confidential platform. The criteria takes into consideration global guidelines for sustainable development and also local aspects specific to each country, sector, and area in which the company operates.
The company is evaluated on two levels (operational practices and impact business model) and in five impact areas (governance, employees, community, environment and customers).
The completion of the B Impact Assessment is the first step to becoming a Certified B Corporation: by reaching a minimum of 80 points it is already possible to go through the review process with B Lab and apply for certification.
Governance
Governance assesses a company’s overall mission, engagement around its social and environmental impact, ethics, and transparency. This section also assesses a company’s ability to protect its mission and formally consider stakeholders in decision making through its corporate structure (e.g., benefits corporation) or corporate governance documents.
Workers
Assessment of a company’s contributions to the financial security, health, safety, well-being, career development, and engagement of its employees. In addition, this section recognizes business models designed to benefit workers, such as companies that are at least 40% owned by non-executive employees and those that have workforce development programs to support individuals with barriers to employment.
Community
Evaluation of a company’s involvement and impact on the communities in which it operates, contracts, and sources. Topics include diversity, equity inclusion, economic impact, civic engagement, charitable giving, and supply chain management. In addition, this section recognizes business models that are designed to address specific community-driven problems, such as poverty alleviation through fair trade sourcing or distribution through microenterprises, producer cooperative models, locally focused economic development, and formal charitable giving commitments.
Customers
Evaluates a company’s stewardship of its customers through the quality of its products and services, ethical marketing, data privacy and security, and feedback channels. In addition, this section recognizes products or services that are designed to solve a specific social problem for or through its customers, such as health or educational products, artistic media products, underserved customers, and services that improve the social impact of other businesses or organizations.
Environment
Assesses a company’s overall environmental management practices, as well as its impact on air, climate, water, land, and biodiversity. This includes the direct impact of a company’s operations and, where applicable, its supply chain and distribution channels. This section also recognizes companies with environmentally innovative production processes and those that market products or services that have a positive environmental impact. Examples might include products and services that create renewable energy, reduce consumption or waste, conserve land or wildlife, offer less toxic alternatives to the marketplace, or educate people about environmental issues.
Why Be A B Corp?
Lead the movement of change in the economy
The need for a company to comply with ESG standards is already a reality. By becoming a B Corporation you will be part of the leadership of this movement, becoming a reference for the market by conforming to high global standards of social and environmental impact.
Build relationships
Be part of a community of companies that believe in the power of business to generate positive impact. B Lab promotes several events to connect B Corps, generating networking that enhances cooperation between companies that aim to make the world a better place.
As an example of this cooperation between companies we have the B Beauty Coalition, an international alliance of B Enterprises that aims to implement profound changes to improve the social and environmental footprint of the cosmetics industry.
Attract talent
The social and environmental impact of a company is increasingly taken into account by talent when choosing a company to work for. In a survey conducted by Robert Half, 83% of professionals stated that the fact that a company has good environmental, social, and governance practices is an important factor when accepting a job offer. It was also found that 1 in 2 professionals do not change jobs because their current company has ESG practices that motivate them to stay with their company.
Transparency
By using the Certified B Corp Seal on products or other material you send a message that your impact has been assessed and audited to high social and environmental impact standards. In addition, your company’s assessment is available in the B Lab directory, as explained above. This makes investors, employees, suppliers, and consumers more confident in the actions of your business.
Protect your mission
The legal structure of a B Corporation helps protect your mission in cases of capital increases and leadership changes, and offers more flexibility when evaluating possible sale options and business liquidity. It ensures that your company is backed by a solid legal foundation for the long term.
Business Alliances
B Corps have comparable, verifiable and reliable metrics that bring clarity to the dialogue with impact investors and ESG investors, also generating new opportunities for business alliances and collaboration with other companies.
I didn’t get 80 points in the B Impact Assessment, what can I do?
When you finish answering the B Impact Assessment it is important to note that far beyond your score, you will have a complete mapping of your company’s impact in the five available categories.
The tool itself generates an “Improvement Report”, with several actions you can take to improve your performance.
Being a B Corporation requires a continuous improvement thought, it is a challenge to increase more and more your positive impact. However, one should not be in a hurry to get certified; we see that the companies with the greatest resilience are those that integrate impact into their business model, and then certification becomes a consequence. It is important to keep in mind that being B is not a position, but a direction!
How does being a B Corporation make your company better?
The B Corporation movement is much more than a certification.
The B Corporation seal is the most tangible result, but it is much more than that because to really be a B Corporation, you need to incorporate it’s principles and thus become a multiplier of a new economy.
And this is the goal of the movement, to redefine the concept of success in the economy.
Being B is not like getting an ISO or any other certification, it is a process of organizational transformation, of you see the evolution of the business and your industry.
It is not just a checklist for completing actions, being B is a transformation of the culture and leadership of an organization as a whole, in search of positive impact.
How much does certification as a B Corporation cost?
Certified B Corporations pay an annual certification fee, which licenses them to use intellectual property like the Certified B Corp logo.
This fee varies by region and may also be subject to additional costs depending on size and structure.
Visit your local B Lab website for further information.
We at We.Flow have been working with B Lab since 2015 and we are a certified B Corp. In addition, in the year 2022 we received recognition from B Lab as Best For The World in the category of Costumers!
Our expertise is to assist organizations that are interested in becoming a B Corporation, through an efficient and tailored approach to help your organization start and accelerate the journey to becoming a better company for the world.
If you would like to learn more, please visit our page about our B Corp Journey.
