Guide to B Corps: What Are They and Why Are They Important for Business Sustainability?

The environmental and social challenges we face as a society aren’t going to be solved by willpower, charities or governments alone.

Businesses are a powerful part in the fabric of modern day society and we need them to take action too: business power can be used to maximise profits, or it can be used to create positive change alongside being a viable, profit-making company.

Certified B Corporations are businesses who want to make a positive impact on the environment, society as well as on their finance sheet.

None of these three P’s – people, planet and profit – are mutual exclusive. In fact, all three can complement each other to create true business sustainability. This is the premise of a B Corp.

What is a B Corp?

A Certified B Corporation, or B Corp for short, is a for-profit business who care just as much about their environmental and social performance as they do about profit.

By valuing purpose and profit equally, a B Corp business is described as a force for good.

To become a Certified B Corporation, businesses must meet the highest standards of social and environmental performance, as well as being publicly transparent and accountable to their pledges.

The B Corp movement is about building a more sustainable economy, not one based on all out profit at any cost.

It’s a global movement that is inspiring a race to the top rather than a race to the bottom. It shows that profit-based businesses can and should do better.

It’s a movement the public want to see too. A recent survey showed that 72% of the UK public believe businesses should have a legal responsibility to protect people and the planet, alongside making profit.

When did B Corps start?

The B Corp movement started in the US in 2006.

Since then it has spread around the world. There are now more than 3,700 Certified B Corps in 75 countries.

B Corps first launched in the UK in 2015 with 42 early adopter businesses helping to get it started.

The year 2020 gave everyone a chance to reflect, allowing people and businesses to think long term about the future. This saw the number of aspiring B Corps in the UK increase significantly.

In August 2023, there are now over 1,500 Certified B Corps in the UK.

Why is it called a B Corp?

So, what does the B mean in B Corp?

It’s thought that the B in B Corp stands for ‘better’ – Better Corporation.

In fact, there’s a campaign in the UK to introduce the Better Business Act where all businesses in the UK must act responsible and put people, profit and the planet at the heart of their purpose.

However, the B is open to degree of interpretation and B Corp themselves haven’t given a categorical answer.

I quite like B for Best – that any aspiring B Corp is striving to be the Best for the world.

A note to make is that the B shouldn’t be confused for Benefit Corporation.

A benefit corporation is a legal business structure which exists in the US, Italy, Ecuador and Colombia. The benefit corporation laws enable a business to make a legal commitment to protect all stakeholders (employees, the community, the environment, customers etc).   

As you’ll find out shortly, a B Corp is a certification issued by a non-profit organisation, not a legal entity.

What does it mean to be Certified B Corporation?

Being a certified B Corporation means a business is using their profits, growth and platform to make a positive impact on the world and people around them.

Becoming certified is a rigorous display of action by a business towards a more ethical and sustainable performance.

Certification requires full commitment from the entire company. It is the only certification that measures the overall impact of a company’s social and environmental performance, rather than measuring specific products or services.

To become certified, a company must complete an impact assessment and measure impact on five key areas:

• Governance
• Environment
• Customers
• Workers
• Community

The impact on these areas is judged over a 12-month period, so any new business who want to become a B Corp will have to wait till they are at least a year old. Early stage companies can signal they are on the B Corp path and go through the process of a ‘Pending B Corp’.

A B Corp must be transparent about all areas of their business, including operational practices, working conditions and finances.

It’s not something any business can do half-heartedly for PR purposes either.

A Certified B Corp have to meet high standards of legal accountability, which includes amending governing documents to include their commitment. For example, companies with Articles of Association will have to be amended to state that the business also exists to have a material positive impact on society and the environment.

This level of dedication demonstrates that a B Corp Certification is the real deal. It can be fully trusted when it comes judging a businesses impact on the environment and society.

What are the B Corp requirements?

From a top level perspective, an aspiring B Corp is required to be a for-profit business that is at least a year old.

There are no minimum or maximum size restrictions to get B Corp certified. Anyone from sole traders to large businesses with multiple offices can apply.  

Initially, a business must complete a B Impact Assessment. This is a free, yet thorough, assessment which gets submitted for review. It’s likely a business will have to supply documentation and other evidence support and verify an application.

The B Impact Assessment covers the five main areas covered which will assess a business’ impact on workers, customers, environment, governance and community.  

To be eligible for certification, a company must score at least 80 out of 200 points on the impact assessment.

If this comes back positive, the next step is to meet the B Corp legal requirement by amending governing documents to make the board of directors accountable.

Then the final step is to sign the B Corp ‘Declaration of Interdependence’ and pay the certification fee. This is an annual certification fee based on a company’s revenue.

All B Corps are required to re-certify every three years. The impact assessment requirements are also tweaked and updated every three years to keep companies moving with the changing times.

Who certifies B Corps?

All B Corps are certified by B Lab.

B Lab are a non-profit organisation behind the B Corp certification.

The mission of B Lab is to create a global culture where all businesses measure and manage their social and environmental impact as eagerly as they do their profit.

What does B Lab do?

B Lab oversee a global network that creates standards, policies and tools for business to improve their systems and make positive change.

B Lab also verify and certify budding B Corporations. When a company completes a B impact assessment, it goes through to an ‘evaluation phase’ where everything gets checked off by an analyst.

After this, it goes through to a B Lab Standards Analyst who discusses any queries with the company and who may ask for additional information and evidence.

B Lab operate an independent Standards Management Team to ensure impartiality during the process. The standards for B Corp certification are created and governed by B Lab’s Standards Advisory Council.

What is a good B Corp score?

Any positive score shows that a business is doing at least something positive.

To become a Certified B Corp, companies must score at least 80 out of 200.

The majority of business score between 40 and 100 points. A B Corp impact assessment score of over 120 is considered to be outstanding.

The highest verified B Corp scores differ each year but are usually between 160-170 – this is the extraordinary zone!

Companies who don’t score the 80 points needed for B Corp status may still be good, sustainable businesses. A score of over 40 is still very good.

The B Corp bar is high, and high on purpose. It needs to be a challenge to achieve in order to maintain its prestige and also to inspire real positive change in how businesses operate.

Which companies are B Corps?

There are now over 3,700 companies across the world who are Certified B Corps.

There are a growing number of high profile companies who have reached certified status, plus others I’ve written about on this website, including:

• The Guardian
• Patagonia
• World of Books (one of my favourite ethical booksellers)
• Cafédirect
• Innocent Drinks
• Bulb Energy
• The Body Shop
• CIRCA5000 impact investment platform
• Bio-bean (makers of coffee logs)

The above list covers some of my favourites, including the important topics of beer, coffee and books! You can see all B Corp businesses on their directory here.

Why are B Corporations important?

Businesses have the power to make real, positive contributions to society and environmental improvement.

B Corps are the businesses that are using this power as a force for good.

There are a number of important reasons why a company should become a B Corp. The first two reasons are the more obvious ones and relate to the fact that all B Corps must meet the highest standards of business responsibility for the environment and society.

Let’s remember the three P’s when looking at why B Corps are important.

Planet: B Corps are important for the environment as businesses are held accountable in implementing actions that reduce things such as, carbon emissions and waste production. The balance is currently tipped towards a runaway climate crisis and this needs to be reversed.

People: Improving the social performance of a business helps people in and around not just the company, but society at large. B Corps are important for people as they make a business look at their working conditions and how people are rewarded.

Certified B Corporations also look outside their company walls and get involved in the community, build connections, donate to charities and help to elevate the standards around them.

Profit: A good business relies on making profit. It wouldn’t be a business otherwise would it? Thinking more cynical about B Corp certification, it could help a business gain a competitive advantage over others. It would have a positive impact on the brand image and be more appealing from a recruitment angle, as well as to investors.

However, it can also have other positive impacts, such as improving workforce happiness and productivity.

B Corps matter because people want to see change for the better. Becoming a B Corp will demonstrate to everyone – investors, employees, customers, and anybody else – that you’re committed to making positive change, which ultimately, will be better for everyone in the long run.