Benefits and barriers to B Corp certification

What is B Corp Certification?

B Lab is a non-profit organisation behind the B Corp movement, who create certification standards that companies must meet to become a B Corp.  

B Corps are a global community of businesses across the world, where companies are led by their purpose and work together as a force for good. This is done by measuring, monitoring and improving their social and environmental impact. 

B Corp certification is achieved by completing an online tool called the B Impact Assessment. This contains approximately 200 questions which are tailored to the size, sector and location of the company. The B Impact Assessment tool is available to companies that are for profit and have been operating for one year. 

As well as a company’s mission and governance, the assessment also measures impact that organisations have on key stakeholders. This includes the environment, workers, customers and community in which the organisation operates. 

To become a B Corp, you must achieve 80 points out of a potential 200. The framework is due to be updated in January 2024, and the new proposed requirements are expected to be more stringent. 

How can becoming a B Corp benefit my organisation? 

Becoming a B Corp and completing the B Impact Assessment offers several competitive advantages:

Organisation position and security:  

To start, the in-depth assessment allows you to analyse your current position and benchmark against your peers. This provides essential understanding as a baseline, including where you’re currently making progress and where you can improve. Between 2017 and 2020, B Corps saw an average growth 5 times higher than that of an average UK business! 

Identifying improvements: 

After gaining understanding, you can begin to identify both quick wins and longer-term improvements aligned with your strategy and growth. Compared to the 5% growth of an average UK company, B Corps saw an average growth of 26% between 2017 and 2020. Leading on from this, the annual Impact Reporting required of B Corps allows you to monitor progress on your initiatives, measuring their effectiveness and demonstrating your organisation’s sustainable commitments for people and the planet. 52% of all SMEs state that they formally track business performance, however this increases to 84% for certified B Corps.  

Promoting progress: 

The assessment and score highlight your organisation’s compliance with relevant social and environmental regulations. This can often attract talent and demonstrates the transparency and positive action that customers and investors are demanding, plus promote employee engagement. B Corps reported an average staff attrition median rate of 8% in the past year, compared to a range of 16-20% for the wider UK business population. B Corps also have a higher percentage of leadership teams with at least one woman, plus 4% average gender pay gap compared to 15% for the average UK business. 

Access to a community of like-minded organisations: 

By joining the B Corp movement, you unlock various community benefits such as collaboration opportunities, networking, events and alignment with B Lab and the B Corp community on global issues. Furthermore, the certification allows you to clearly demonstrate, explain and engage clearly the mission that you have under a recognisable name. UK B Corps are one of the fastest growing communities of B Corps worldwide – are you ready to join them? 

Graph showing increasing number of certified B Corps between 2013-2023. There is are currently approximately 1000 B Corps, projected to be nearly 2000.

Source of graph and statistics: B Lab UK 

Whilst we’ve discussed the benefits of certification, it is important to be aware of some of the challenges that you might face when applying to become a B Corp, such as: 

 

Rigorous Assessment: 

The process of becoming a B Corp involves a comprehensive evaluation of a company’s impact on its workers, customers, community, and environment. Achieving the required minimum score of 80/200 can be challenging for many businesses who are earlier in their sustainability journey. 

The assessment and the subsequent verification process can be time-consuming, requiring significant resources and commitment from the company. This can be particularly challenging for smaller organisations. 

Legal Requirements: 

Companies may need to alter their legal structure or adopt new governance standards to meet B Corp certification requirements. This could involve amending articles of incorporation or adopting new accountability standards. Challenges may also arise from understanding the legal implications and how it will affect their fiduciary duties, decision-making processes, and overall governance. Louise Harman from Bates Wells discusses the legal requirements in further detail, available to download on at the bottom of this page.  

Ongoing Commitment: 

B Corps must recertify every three years, demonstrating ongoing commitment to high standards of social and environmental performance, accountability, and transparency. Furthermore, B Corps are encouraged to continuously improve their impact, which likely requires ongoing investment in sustainable practices and people initiatives. 

Market Understanding: 

Educating stakeholders including customers, employees, and investors, about the value and significance of B Corp certification, is also time consuming. Companies must work to differentiate their genuine commitment to social and environmental responsibility from instances of greenwashing and/or purpose-washing in the market. 

Financial Implications: 

The direct cost of certification, including the B Corp certification fee, can be a challenge for small businesses or startups. Indirectly, achieving and maintaining B Corp status may require significant ongoing time, resource and cost investment in sustainable practices, employee benefits, and community initiatives. 

What support is available to me to become a B Corp? 

There are several resources available on the B Lab website to support you in the process of certifying, or simply finding out more.  

Wherever you are on your journey, we can support directly. As a certified B Corp and sustainability consultancy, our expert consultants can offer more tailored approach and support, including: 

  • Analysing your current positioning and score, plus helping you to gain a comprehensive understanding of your organisation’s impact 
  • Pinpoint necessary stakeholders to ensure engagement 
  • Identifying “quick wins” to elevate your score 
  • Compiling an improvement and implementation report 

If you haven’t already, you can now watch our ‘B Corp Basics’ webinar in collaboration with Bates Wells and Happy. The session dives deeper into the Impact Assessment process plus insights into the legal challenges and solutions to overcome them.  

Have any further questions? Get in touch with our experts at hello@energise.com and they’ll be happy to help. We offer a range of social sustainability solutions which can be tailored to your requirements. 

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Written By    Emma Lane

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