New Standards for B Corps
B Corps are purpose-driven companies that have been verified by B Lab, a non-profit network, to meet high standards of social and environmental performance, transparency, and accountability.
There are currently over 1,000 companies in the UK that have B Corp certification and the global community of B Corps is constantly growing.
Current Certification Process
Currently, to achieve B Corp certification businesses must amend their company articles to meet the legal requirements and complete a scored impact assessment of their practices around governance, workers, community, the environment and customers. This assessment is reviewed by B Lab to determine the overall 'B Impact Score' which must be at least 80 points to achieve certification.
These requirements are being revamped to a set of minimum standards designed to enable businesses to act holistically across all areas of their operations and ensure consistency in these operations across all certified B Corps. The aim is to encourage growth by setting a clear definition of what it means to be a B Corp and transition from a points-based certification requirement to a certification scheme where companies must meet the specific requirements within each topic.
The New Standards
A set of revised requirements have been drafted and are currently undergoing public consultation. The new standards identify ten topics that are comprehensive of different stakeholder impacts (eg human rights, worker engagement and climate action) and businesses will have to demonstrate how they meet the minimum requirements for each of these topics to achieve B Corp Certification. The topics are as follows:
- Purpose and Stakeholder Governance
- Worker Engagement
- Fair Wages
- Justice, Equity, Diversion and Inclusion
- Human Rights
- Climate Action
- Circularity and Environmental Stewardship
- Collective Action
- Impact Management
- Risk Standards
When Are They Implemented?
The new standards are on track to begin phased implementation in early 2024. This is dependent on B Lab testing the new performance requirements with select company stakeholders, to be followed by a public comment period. We will be monitoring the progress of these testing stages so our clients can be kept in the loop with the implementation timeline.
What Does This Mean For You?
If your company is looking to achieve B Corp status in the next couple of years, consider these ten topics and ensure the necessary steps are being taken to integrate these into your company's constitution and operations, if they are not already. For those companies already having achieved B Corp status, it is important this status be maintained by adapting to the new standards and ensuring these can be consistently met through development of the company's business plan and long term objectives.
How Can We Help?
Our social enterprise and corporate lawyers have experience advising on the requirements for B Corp certification and the practical steps to achieve B Corp status. We will be keeping track of the phased implementation and will be keeping our clients ahead of the curve by providing regular updates on achieving this. We can also review your governance and employment structures to advise you on embedding corporate purpose and good governance practices that meet these new standards.