A business holding a B Corp certification is deemed to take into account stakeholders in general, rather than holding as pre-eminent the return to its shareholders.
B Corp is a certification companies can hold if they meet requirements set out by B Lab, a US-based non-profit that devised and administers the system. Companies receive a qualifying score from an impact assessment held by B Lab covering a set of ESG criteria.
Go deeper with GlobalData
B Lab was founded in 2006 by Bart Houlahan, Andrew Kassoy and Jay Coen Gilbert.
At the time of writing, there are approximately 6,400 certified B Corp companies spanning industries such as beverages, food, fashion and technology. B Lab has also indicated it has roughly 3,000 companies in the process of being certified.
How can businesses obtain the B Corp certification?
To achieve the certification and receive authorised uses of the B Corp stamp – a B in a circle – on packaging and marketing platforms, companies enter an assessment process.
Businesses are required to fill out a lengthy ‘B Impact’ assessment form that judges and scores their corporate and operational approach to the environment, workers, materials, community and governance.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataTo obtain a B Corp certification, a company must score 80 or above out of 200 in its ‘B Impact’ assessment.
In order to ensure that a company doesn’t just get the sticker, slap it on its brands and forget about it, B Lab requires members to re-certify every three years. This is done by filling out a ‘B Impact Assessment’ and submitting it with documentation to B Lab for evaluation.
“Becoming B Corp certified is, quite rightly, not a simple tick-box exercise. It is a detailed and rigorous process which forces you to look at all areas of the business, and it initially took us around 18 months to complete,” Bruichladdich Distillery CEO Douglas Taylor tells Just Drinks.
“Three years on, the recertification process has taken around six to nine months and is a huge team effort – and a significant investment of time and resource. It’s a big commitment, you really have to want to do it.”
In its annual report for 2022, B Lab lead executive Eleanor Allen noted the non-profit had “reached a major milestone with more than 200,000 businesses registered on the B Impact Assessment to measure, manage, and improve their impact”.
She wrote: “We are well past our proof of concept phase, and in fact, the interest we see for our certification has recently outpaced our own ability to scale. And so we find ourselves in that territory of wrestling with “a good problem to have.”
To be clear, B Lab is a non-profit organisation and it does not carry any legislative backing or power from a statutory body.
B Lab does instil some legal requirements on those seeking membership. To join a company must “mission lock” itself and change its legal framework to include a commitment to environmental and social good.
There have been examples of companies that, once certified, no longer hold the status.
In December, B Lab confirmed UK brewer BrewDog was no longer a member. When contacted by Just Drinks, BrewDog confirmed it was no longer a member of B Corp, but claimed it had voluntarily withdrawn its status after being unable to implement additional measures requested by the B Lab board. This contradicts an earlier report in The Guardian, which suggested the brewer had lost its status.
Significant costs are included in the process. Membership includes an annual fee on a sliding scale depending on the size of the company ranging from $500 to $50,000. Companies with over $1bn in revenue are charged an individualised fee.
Proceeding through the impact assessment process is also costly as it takes time and often legal counsel, especially in the rewriting of the company’s mission structure. A cottage industry of companies offering their services to help business through the process has sprung up in recent years.
Which businesses are signing up for B Corp certification and why?
Proponents of B Corp certification say the status has a number of benefits for corporate groups and SMEs, arguing that, with the exception of the cost to certify and maintain that certification, it holds little drawback.
Hence why corporations like Danone, Coca-Cola, Diageo, Nestlé and Beam Suntory have strived to achieve certification for at least one of their brand subsidiaries.
Danone, for example, has an “ambition” for its whole business to hold the B Corp certification. “Over 70% of Danone’s global sales are now covered by B Corp certification, marking significant progress towards Danone’s ambition to become one of the first certified multinationals,” the company says on its website.
This has proven to be a lengthy process, as a Danone spokesperson tells Just
Drinks. “The challenge is that B Corp certification process is bottom-up
and there is a need to certify legal entity by entity for multinationals like
Danone, which is complex as we have hundreds of entities around the world to
certify.
“Having also in mind that identifying gaps and opportunities through the
certification usually takes almost a year for just one entity. As Danone joined
the movement in 2015, it will take a journey of ten years to reach our ambition
to be fully B Corp certified by end-2025.”
Having a B Corp accreditation could help companies when it comes to recruitment. In a 2023 survey by KPMG, one in three 18- to 24-year-olds said they have rejected a job offer from a company due to its sketchy record.
The UK-based survey of 6,000 adult workers also found 46% stated they wanted to work for a company that had demonstrated a commitment to ESG principles. The younger the age the higher this need grew.
Innocent, the Coca-Cola Co.-owned UK soft drinks brand, says: “When we recertified in 2021, we managed to increase our score (from 92.5 to 105.2 out of 200) across the board through things like engaging our suppliers in our hero supplier programme, our internal programme that assesses our suppliers’ sustainability performance, creating a great workplace environment and providing volunteering opportunities to support the local communities around our offices.
“More than half of our points come from how we support our people. This ranges from our career development and end-of-year review processes to things like flexible working and our mental wellbeing programme.”
For smaller enterprises, there are additional benefits in achieving B Corp certification as it gives access to and brings together similar businesses into one network. B Lab hosts events where SMEs share policies and processes on best practices around sustainable logistics, packaging and suppliers, as well as general operational know-how.
Criticisms and future of B Corp certification
The fact B Lab is a private non-profit organisation with no legislative backing or command taken from a statutory body means it operates as it sees fit, which leaves it open to criticism given its role in evaluating and certifying the validity of companies’ efforts.
Last year, B Lab attracted criticism when it announced it would be granting the B Corp accreditation to Nestlé’s single-use coffee pod capsule brand Nespresso. It was given an overall ‘B Impact’ score of 84.3 out of 200.
A Nespresso spokesperson told Just Drinks: “Nespresso is one of the largest organisations to achieve B Corp accreditation today and, for an organisation at the scale of Nespresso, one of the key challenges was bringing together the correct data from huge datasets and ranging global sources. As a global organisation, we adhere to legislation covering everything from employment and contracting to supply chain and other operations, so accumulating rigorous proof against all B Corp points was a huge administrative task.
“We are hugely proud that we have achieved B Corp certification, following the comprehensive B Impact Assessment. Of course, part of the B Corp journey is looking at how we can continuously improve, as we have always done on our sustainability journey.”
Following the accreditation of Nespresso, a number of B Corp companies spoke out and signed an open letter to B Lab deriding the decision, listing several environmental companies they had against the single-use coffee pod capsule brand.
Small independent Scottish-based Glen Lyon Coffee Roasters – ‘B Impact’ score 104.2 – wrote last year that: “We feel a line needs to be drawn somewhere to protect the reputation of the certification scheme as well as businesses like ourselves who have signed up to it.
“The question is: where is that line? When we heard that Nespresso was about to be certified as a B Corp our initial reaction was dismay.”
Business leaders hit out at B Corp in an open letter signed by 32 B Corp companies – operating in multiple categories – brought together by the self-named ‘certification watchdog' the Fair World Project. They called for improvements in the assessment process and a move away from one ‘minimum total score’.
It stated: “We envision a world where B Corp values can scale to include companies of any size, but this must not happen in a way that dilutes the integrity of the movement the certification stands for.
“Without a structurally higher certification bar and a mechanism for enforced accountability within the B Impact Assessment or certification process, we are concerned that corporations will do the bare minimum to ‘greenwash’ themselves as B Corps.”
B Lap says it is striving to address its criticisms and is going to change its assessment standards next year. B Lab has indicated future company assessments will focus on ten categories, including diversity, human rights, climate change, fair remuneration and risk assessments. Last May, the group announced the results of a consultancy report which detailed the new standards they are aiming for.
The intention is the requirement to hit these targets will eliminate companies aiming to just hit above the 80-score mark for that B Corp status.
While the future of the B Corp accreditation’s prominence and status may be uncertain, what is clear is that an increasing number of companies across all industries are spending time and resources to align themselves with its standards in the hope of obtaining that certification.
