‍B Lab announces changes to B Corp certification

The recognisable B Corp certification was designed as a means to identify and promote companies that have met the schemes required standards for social and environmental performance, identifying businesses who are a force for good. To date, almost 10,000 companies across 100 countries have achieved B Corp status. Collectively these companies employ just under 1 million workers across 160 separate industries.

Now in the wake of mounting criticism, including greenwashing allegations, B Lab who are the organisation responsible for B Corp have revealed the results of a four-year review into the certification process[i].

Previously, any for-profit company that had existed for 12 months could become a B Corp, with the process of certification started by completing the online BIA (B Impact Assessment). The BIA’s intention was to analyse the company’s impact on its key stakeholders (workers, community, environment, and customers), and understand its governance- meaning its mission, engagement, ethics, and transparency, through a series of 200 questions. To be certified, a company had to score more than 80 out of 200.

Can B Corp silence its critics?

Criticism of B Corp’s certification centres around the scoring system, whilst a required score of just 80 may seem lax, it is the underlying scoring system that opens it to further critique. Points can be gained from any of the five pillars being assessed (governance, workers, community, environment, and customers). This means that there’s no minimum threshold for each pillar, which allows trade-offs and poor practice to occur. Furthermore, the BIA does not consider industry-level sensitivities, so this means that companies can choose issues that are easy to address rather than the ones that are most material for their industry.

This has led to concerns; for example, with Nespresso obtaining B Corp status in May 2022. The brand, which is a subsidiary of Nestlé, achieved a score of 84, yet its practices have been under scrutiny, including allegations around the use of child labour, which were made in a Channel 4 Dispatches documentary[ii]. Further, Glen Lyon Coffee, a B Corp certified roastery in Scotland, expressed their concerns about Nespresso being certified when the company produces around 12,600 tonnes of aluminium waste every year. In addition, questions were asked as to what it means for a subsidiary to achieve B Corp status when the parent brand does not.

Other controversies include an investigation by B Lab made into the B Corp status of four Havas media agencies in January 2024[iii]. It followed the announcement of Havas’ controversial multi-million-dollar account with fossil-fuel giant Shell in September 2023[iv]. Subsequently, twenty-six B Corp advertising firms from Clean Creatives, a collective of media companies cutting ties with fossil-fuel clients, put pressure on the organisation to strip the subsidiary companies of accreditation.

Further, in February this year, US soap brand Dr Bronner’s dropped its B Corp status, stating that “Sharing the same logo and messaging regarding being of ‘benefit’ to the world with large multinational CPG companies with a history of serious ecological and labor issues, and no comprehensive or credible eco-social certification of supply chains, is unacceptable to us.”[v]

In an attempt to address concerns B Lab has announced a new format for obtaining certification, with the old scoring system done away with. Instead B Corps must meet performance standards across seven ‘Impact Topics’ these are as follows: 

• Purpose & Stakeholder Governance: Act in accordance with a defined purpose and embed stakeholder governance in decision-making, creating governance structures to monitor purpose, social, and environmental performance.
• Climate Action: Develop an action plan to support limiting global warming to 1.5°C, and, for larger companies, include GHG emissions and validated science-based targets.
• Human Rights: Understand how their operations and value chain may involve negative human rights impacts and take action to prevent and mitigate negative impacts.
• Fair Work: Provide good quality jobs and have positive workplace cultures, implement fair wage practices, and incorporate worker feedback in decision-making.
• Environmental Stewardship & Circularity: Assess their environmental impacts and take meaningful action to minimize them in their operations and value chain.
• Justice, Equity, Diversity & Inclusion: Foster inclusive and diverse workplaces, and contribute meaningfully to just and equitable communities. 
• Government Affairs & Collective Action: Engage in collective efforts to drive systemic change, advocate for policies that create positive social and environmental outcomes, and, for the largest companies, publicly share their country-by-country tax reports[vi].

The new system does appear to address some of the previous criticism in that it removes the loophole where companies could simply score highly in one or two areas whilst underperforming in others. Businesses will need to meet minimum standards across the seven categories outlined above, failure to meet any of these will see certification denied. The changes are set to take effect from next year, with the largest companies set to face the most stringent requirements. For example, large corporations will need to calculate and publish their gender pay gap, as well as provide transparency around their tax practices and the social impacts in their supply chains.

References

[i] B Lab publishes new B Corp standards, raising the bar for businesses worldwide

[ii] Dispatches: Starbucks and Nespresso: The Truth About Your Coffee | Channel 4

[iii] As greenwashing soars, some people are questioning B Corp certification

[iv] Havas and Shell: a controversial partnership that makes sense | The Drum

[v] As Dr. Bronner's drops its B Corp status, brands weigh the pros and cons of the certification - Modern Retail

[vi] B Lab publishes new B Corp standards, raising the bar for businesses worldwide

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