B Corps certification – What is it and is it worth it?
“People want to work for, buy from and invest in businesses they believe in. B Corp Certification is the most powerful way to build credibility, trust, and value for your business.”
With Cop26, the United Nations Climate Change Conference taking place in Glasgow at the end of October 2021, this month we are looking at B Corps Certifications. These are certifications that businesses can apply for, akin to ‘Fair Trade’ that allow consumers and potential employees to be clear that the businesses that they buy from and work for, achieve the highest standards of verified social and environmental performance alongside public transparency and legal accountability.
What is a B Corps Certification?
B Corp Certification is the only certification that measures a company’s entire social and environmental performance. The Impact Assessment evaluates how your company’s operations and business model impact your workers, community, environment, and customers. From your supply chain and input materials, to your charitable giving and employee benefits, B Corp Certification is designed to show that your business is meeting the highest standards of verified performance.
What are B Corporations?
Certified B Corporations are a new kind of business that balances purpose and profit. They are legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment. ‘Certified B Corporation’ is the term used for any for profit entity that is certified by the nonprofit B Lab as voluntarily meeting higher standards of transparency, accountability, and performance
What are the benefits?
A commitment to the environment and society is increasingly on the business agenda. Environmental, Social & Governance (ESG) is a key element of company statements. Aside from this, potential benefits aside from a positive impact on brand equity include:
- Greater recruitment appeal and employee retention
- UK B Corps reported an average growth rate significantly higher than the national average
- Can improve the saleability of your organisation
- Investors are looking for more diverse portfolios and there may be less due diligence required for B Corp sales
What do I need to get certified?
B Corporation status can be achieved by receiving accreditation from B Lab (a non profit organisation). Certification requires a score of at least 80 (out of 200) against 5 areas of impact; Governance, Community, Workers, Environment and Customers.
Where can I apply?
The initial step is to complete an online assessment (B Impact Assessment). After completing this assessment, B Lab then assesses and verifies that your score meets the certification standards.
Here is the link if you’d like to assess your score https://bimpactassessment.net/
Is it worth applying?
There are pros and cons with a B Corp certification. Advantages might include positive brand equity, recruitment benefits and greater investor appeal however, you might like to weigh these against a potential change in the focus or your business. Some potential ‘cons’ to keep in mind:
- The company’s Articles must include a commitment "to promote the success of the company for the benefit of its members and, through its business and operations, to have a material positive impact on society and the environment, taken as a whole". Legally, you are then required to make decisions which consider all these factors, not exclusively profit maximisation. Is your organisation able and ready to have a change in mindset?
- While there is a growing community of investors who find B Corp status appealing, it is still early days. As B Corporations will need to take decisions not necessarily around profit maximisation, investors are rightly cautious that such a certification could inhibit growth
ESG is here to stay and whether this direction is right for your business only you will know however it is an option to consider in the light of increasing conversations around purposeful profit and consumer habit changes.
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