B Corp launches new standards as ‘complete reimagining’ of certification of businesses for good

New B Corp Certification standards were unveiled today, marking a “complete reimagining” in the way that companies are given a seal of approval for their social and environmental performance.

Overseen globally by non-profit organisation B Lab, certified B Corps are companies that have been verified to meet B Lab’s standards of social and environmental performance, transparency and accountability. In addition, B Corps must make a legal commitment by changing their corporate governance structure to be accountable to all stakeholders, not just shareholders. There are currently 9,600 B Corps across 102 countries, including outdoor clothing manufacturer Patagonia, mobile phone network GiffGaff, and ice cream brand Ben and Jerry’s. 

Although the B Corp concept broke new ground when it was introduced in 2006 by raising the profile of businesses that aimed to do good rather than simply bowing to financial pressures from shareholders, the movement has faced criticism too. Coffee company Nespresso’s B Corp certification in 2022, in particular, raised debate about the rigor of a certification which permitted a company with serious concerns about its human rights to pass muster.

• Read more: Does B Corp status really signal a force for good, or just a 'force for less bad'?

As the standards were launched today, Clay Brown, co-lead executive of B Lab Global, said: “This isn’t merely an update; it’s a complete reimagining of business impact to respond to the challenges of our time.” 

He added: “B Lab’s new standards can serve as a roadmap for leadership on social and environmental issues when needed most.”

A statement from B Lab emphasised that the move was “the most significant evolution” in its 19-year history.

A spokesperson for B Lab pointed out that the new standards were necessary in the face of the intensifying climate crisis and growing societal inequality. At the same time, as businesses faced mounting pressure to scale back on their climate and social justice initiatives, the standards offered a “robust framework to fully commit to purpose”. Furthermore, with increasing regulatory complexity, including CSRD and CSDDD reporting in the EU, SEC climate disclosure rules in the US, “businesses need a clear path forward”.

• Read more: The Editor’s Post: DEI is under threat, but can it hide in plain sight?

Seven ‘impact topics’ at heart of new standards

The new standards come after four years of consultation, which started in December 2020. B Lab received more than 26,000 pieces of feedback from stakeholders in 67 countries. There were 70 focus groups held and 70 experts consulted.

B Corps must meet performance standards across seven ‘impact topics’, rather than being able to score points cumulatively. Until now, the certification was based on a points-based system, which required companies to achieve a minimum aggregated score of 80 across a set of questions. But now, high performing areas can no longer cover up for lower performing areas. 

The impact topics are: purpose and stakeholder governance; climate action; human rights; fair work; environmental stewardship and circularity; justice, equity, diversity and inclusion; government affairs and collective action. 

While previous standards were criticised for shying away from examining companies' practices in their supply chains, the new ones require applicants to assess their impact on their value chains – notably regarding human rights and the environment – and to take steps to prevent or reduce negative impacts.

The new standards incorporate methodologies from other certification schemes, sustainability-related frameworks and disclosure reporting, including the Global Reporting Initiative (GRI), the European Sustainability Reporting Standards (ESRS), the Science Based Targets initiative (SMTi) and Fairtrade. 

• Read more: ISSB unveils first global sustainability standards in bid to restore trust in company reporting

Certified companies must also commit to continuous improvement, meeting milestones after three and five years. 

B Corps that are already certified usually have to recertify every three years. From now, they will gradually transition to the new standards. 

Judy Rodrigues, director of standards at B Lab Global, said: “We are confident that the new standards are clear, ambitious and truly capable of raising the bar for businesses worldwide.”

Header image: A celebration event for B Corps