As the world evolves and the B Corp movement grows (both in size and strength), its standards must also progress to ensure B Corps are making meaningful impacts towards an equitable and regenerative economy.
At the end of 2020, B Lab announced their standards (also called performance requirements) were undergoing a review. Now that the review has been completed, the B Corp community received an in-depth look at their new requirements.
Current B Lab Standards
The current B Lab standards for B Corp Certification are relatively simple, even if the journey of getting it is complicated: earn an overall verified score of 80 and meet B Lab’s legal requirement by either amending governing documents or becoming a Benefit Corporation. While that may sound easy, any company that has ever gone through the process can tell you it’s not; it is a rigorous and comprehensive process that can take a year or more.
Despite this rigor, the current standards have their limits and challenges. In particular, the certification of many larger multinationals in recent months has put the standards under heightened scrutiny. This has called into question the certification’s accountability and effectiveness for driving positive impact.
To ensure the longevity of B Corp Certification, B Lab worked with the Global Reporting Initiative (GRI) on their new standards to fill the gaps in their reporting and make ESG reporting more consistent.
Where Standards Are Going
The new requirements call for higher accountability on climate action, social justice, equality, public health, and other pressing social and environmental issues. The new framework has ten specific topics that are applicable across industries and most relevant to the goal of creating an inclusive, equitable, and regenerative economy, listed below:
- Purpose & Stakeholder Governance
- Worker Engagement
- Fair Wages
- Justice Equity Diversity & Inclusion (JEDI)
- Human Rights
- Climate Action
- Circularity and Environmental Stewardship
- Collective Action
- Impact Management
- Risk Standards
The biggest change is the movement away from a simple 80-point minimum. This standard was too flexible and allowed companies that many deemed disingenuous to gain certification. Many companies can pass an 80-point threshold by leveraging a specific positive environmental or social impact while contributing negatively to another area. Now, companies must meet minimum requirements in all ten of these categories to gain certification.
Example of the New Standards
For a company to be eligible for B Corp Certification, it must track its greenhouse gas (GHG) emissions annually and implement a climate transition plan to contribute to keeping global warming below 1.5 ° under the Climate Action area. More information on the specifics of each new standard can be read here.
The new standards are much more specific and will help ensure that all B Corps are doing their part to advance important social and environmental issues. One of the issues that is most likely to cause concern for many smaller businesses is the burden of proof that these different categories may pose, greatly decreasing their chance of certification despite the fact these smaller companies are relatively low risk compared with medium to large enterprises.
What This Means for Your Certification or Recertification Process
The future isn’t certain, but our B Corp Consultants are ready for the challenge. The new standards are substantially more rigorous, but this also means the certification will have higher accountability and, therefore, favorability among consumers and investors. Establishing yourself as a purpose-driven enterprise is a key differentiator in today’s landscape. A B Corp certification is a great way to make ESG and climate action part of the DNA of your business.
Contact our team for more information about how we can help you become B Corp Certified.
