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By LegalEdge News

What is B Corp Certification?


Given the increasingly complex challenges facing the world today, businesses are being called upon to contribute towards making a positive change. For companies committing to making an impact in the world, it can be challenging to navigate the space and ensure that their actions are creating change. For those companies that want support in their impact journey becoming a certified B Corporation is a great way to start.

Certified B Corporations (B Corps for short) are businesses that meet the highest standards of verified social and environmental performance, public transparency and legal accountability.

B Corps exist as part of a wider movement demonstrating that businesses have the power to address some of society’s greatest challenges and to build a more inclusive economy. It is a recognition that companies need to move away from the concept of shareholder capitalism to stakeholder capitalism, one that has a strong governance structure that supports the environment, workers, customers and the wider community.

Companies that commit to the movement can measure their impact in these areas. If they score high enough, commit to making a change to their governance structure and pledge to be transparent about their progress to being a better business, they can go on to become a B Corp

B Corp certification exists for for-profit companies, operating in a competitive space, that have been in operation for 12 months or more. A company of any size and in any country can certify as a B Corp.

Companies in operation for under 12 months can become a Pending B Corp – see more about this below!

To certify as a B Corp, companies need to complete two key actions. 

The first is to sign-up, complete and pass the B Impact Assessment with a verified score of at least 80 points. 

The B Impact Assessment assesses the impact of the entire company. It is a comprehensive tool with a set of questions covering a company’s impact in relation to its governance, workers, the community, the environment and its customers. Each question carries a score which, when totalled, states how impactful a company is. Companies need to attain a combined score of over 80 points to go on to become a B Corp.

The second is to make a legal change; B Corps need to amend their articles of association and commit to consider the impact of their decisions not just on their shareholders but all of their stakeholders.

There are now over 4,000 B Corps across the world in 153 industries. 

In the UK, there are over 500 B Corps across 51 industries. This represents a combined total of £6 billion+ to the UK economy and over 28,000 employees.

Well known names in the B Corp community include Patagonia, Innocent, The Body Shop and Bulb.

There are a range of benefits to becoming a B Corp. 

At its highest level it is about supporting the transition to a new economic system and approach to business that supports people and the planet as well as profit.

Going through the B Impact Assessment process offers companies a great opportunity to see how they are making an impact on people and the planet, and discover ways to make improvements. Demonstrating impact is becoming increasingly important for securing investment as well as attracting and retaining top talent.

Certified B Corps gain access to the community of other businesses working to support each other through collaboration and knowledge-sharing.

Last year, B Lab asked the UK B Corp community about their motivations for certifying and the most common answers were:

  • Improving their impact through participation in working groups, sharing best practice and the ongoing use of the BIA and the SDG Action Manager;
  • Collaboration, including partnering with other B Corps, joining B Locals around the UK and working together to find solutions to specific challenges;
  • Networking and attending exclusive community events;
  • Alignment with B Lab and the B Corp community on global issues;
  • Engaging employees in the company’s mission; and
  • Attracting talent, investment, clients and customers within the community and connecting to B Corp suppliers.

In addition, in a recent survey of UK SMEs, B Corp SMEs reported faster growth in turnover and headcount, greater employee engagement, retention and diversity, higher levels of innovation and more robust governance.

It is free for any business to sign up and use the B Impact Assessment to measure its impact.

To certify as a B Corp, companies pay an initial £250 submission fee to contribute to the cost of verification. Once certified, companies are required to pay an annual certification fee, the cost of which is based on its annual sales. It starts at £1,000, increasing to £50,000 for companies with an annual revenue over £750m. 

For companies that have been operating for 12 months or less and take the route to become a Pending B Corp, the cost is £250.

The assessment process is rigorous because it is the only certification to measure a company’s entire social and environmental performance. 

The time involved largely depends on the size and complexity (such as the number of operating locations) of your company. For most small businesses, it can take a couple of weeks to complete a rough baseline. For larger or more complex companies, it can take a couple of months. Companies often then require a period of improvement, using the assessment to reach 80+ points before submitting for verification.

For further information on timeframes, take a look here.

Start-ups and new businesses (operating for 12 months or less) can become a Pending B Corp, a status B Lab created to empower early stage companies to make a commitment count. 

Pending B Corps go through the B Impact Assessment with best estimate answers and meet the legal requirement for certification. With a £250 fee, B Lab grants the company the use of the Certified B Corp: Pending logo.

After 12 months, those companies can then go on to achieve full B Corp certification.

For further information on becoming a Pending B Corp, take a look here.

There is a range of support available for those who want to get certified:

  • The B Lab UK website offers a range of support and resources. Sign up to the mailing list to keep up to date with news and blogs.
  • Keep an eye out for B Lab UK events for the latest developments and information on a range of topics to help people and the planet.
  • The B Impact Assessment Knowledge Base contains a range of articles and guides on completing the process.
  • B Lab UK trains B Leaders who are CSR and sustainability professionals who are on hand to offer support to companies. The B Leaders website includes a directory where companies can search for B Leaders in their area and expertise. Many of those B Leaders run their own businesses offering additional support and guidance for companies. 

If you’re considering getting B-Corp certified or are currently going through the process we can help with the legal requirements from changing articles of association, looking at enhanced directors duties or more generally getting some of the key building blocks like your policies in place. Get in touch if you want a chat.

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