B Corp. It’s a word you may be familiar with, but what exactly does it mean?
In an era marked by evolving consumer values and heightened awareness of social and environmental issues, B Corporation, or 'B Corp' for short, is a business that combines profit with social and environmental objectives. B Corps are legally required to consider the impact of their decisions on not only their shareholders but also on their workers, customers, suppliers, community, and the environment.
With more high-end businesses pledging their commitment to sustainability than ever -including transitioning towards a circular economy, safeguarding the environment and natural resources, and advocating equal and respectful working conditions - B Corp certification takes this commitment one step further, enshrining it in a legal framework, and removing any possibility of ‘green washing’ or brands not living up to their promises.
The rigorous process of becoming B Corp certified - though not without its complexities - has the potential to redefine the identity and impact of brands, and - in the context of luxury and high-end businesses - find resonance in the shifting landscape of consumer values and heightened expectations.
So, with the news that Country and Town House has become the world's first glossy magazine to achieve B Corp status, we take a look at what the certification means for the cultural and luxury sector, and how brands can begin the often daunting journey towards meaningful sustainability and respectful working conditions (no green washing in sight).
But first, the basics
There are currently almost 7,500 Certified B Corporations in more than 90 countries and 160 industries, employing almost 67,000 workers.
To achieve this status, these companies must:
1. Demonstrate high social and environmental performance by achieving a B Impact Assessment score of 80 or above and passing a risk review. Multinational corporations must also meet baseline requirement standards.
2. Make a legal commitment by changing its corporate governance structure to be accountable to all stakeholders, not just shareholders, and achieve benefit corporation status.
3. Exhibit transparency by allowing information about the company's performance, measured against B Lab’s standards, to be publicly available on its B Corp profile on B Lab’s website.
The road to B Corp certification
To become a B Corp, a business needs to follow a specific process and meet certain criteria established by B Lab, the non-profit organisation that administers the certification.
Read on for the steps a brand must take to become a Certified B Corporation:
1. Assessment:
The first step is to complete the B Impact Assessment (BIA), a comprehensive online questionnaire that evaluates a company's social and environmental performance across various areas, including governance, workers, community, environment, and customers. The assessment consists of hundreds of questions that cover topics including worker benefits, environmental practices, and ethical sourcing. The BIA is designed as a comprehensive assessment of the company's impact and practices.
2. Meet the minimum score:
To become a Certified B Corporation, a business must achieve a minimum score on the BIA of 80 out of a possible 250+. A score that only around 3% of companies who have completed the assessment achieve. Patagonia - the poster child for purpose - achieved 151.4 points.
3. Gather documentation:
Alongside the BIA, the company must collect and submit relevant documentation to support the claims made in the assessment. This documentation may include financial statements, policies, and other evidence of sustainable and socially responsible practices.
4. Assessment review:
B Lab - the non-profit network transforming the global economy to benefit all people, communities and the planet - reviews the BIA responses and supporting documentation to verify that the company meets the necessary criteria. This process involves a thorough review by B Lab's certification team.
5. Legal change:
In the UK, all companies seeking to become a B Corp must meet the B Corp legal requirement and update their Articles of Association to include mission-aligned legal language. Making the legal change prior to certification is required for all companies with 0-49 full time employees. For businesses with more than 50 employees, additional time is granted depending on the company’s legal structure – limited companies will have up to a year after certification to complete the legal change, and Limited Liability Partnerships (LLPs) have 90 days.
6. Sign the 'B Corp Declaration of Interdependence' and term sheet:
Companies pursuing certification must sign the B Corp Declaration of Interdependence, a statement of values and commitment to the B Corp community, and a B Corp Term Sheet, which outlines the legal requirements and responsibilities of a Certified B Corporation.
7. Pay certification fees:
A one-off submission fee of £250 + VAT is payable when submitting a company for certification. Certification fees are paid annually and there are fee bands in place. Equity discounts for entrepreneurs facing barriers to business ownership are available, to ensure B Corp Certification is affordable for all.
8. Benefit Report:
Once certified, the company is required to publish an annual Benefit Report that details its social and environmental performance, providing transparency to stakeholders and the public.
9. Recertification:
B Corps are required to recertify every three years. This involves completing the B Impact Assessment again and demonstrating an ongoing commitment to its social and environmental mission.
So, how do B Corps perform, compared to other similar businesses?
Recent research shows that B Corps outperform their UK peers across several business metrics. Compared to data from surveys of UK SMEs, the research found that B Corp SMEs have, on average:
1. Faster growth in turnover and employee headcount and higher expectations about future growth
2. Greater levels of employee retention, engagement and diversity
3. More robust governance processes
4. Greater focus on civic and community engagement
5. Higher levels of innovation
6. The same likelihood of success at securing external finance
And, certifying as a B Corp can bring the following benefits:
1. Improving impact through participation in working groups and sharing best practice.
2. Collaborating with other B Corps, joining B Locals around the UK and working together to find solutions to specific challenges
3. Networking and attending exclusive community events
4. Alignment with B Lab and the B Corp Community on global issues
5. Engaging employees in the company’s purpose and mission and attracting and retaining talent
6. Articulating the company’s mission externally – to investors, clients, customers and suppliers
