What's the story with B Corp?

B Corp is in the news. But what is it really? Is it something your brand or business should be considering? What does it cost? Does it take a lot of time? Where would you even start & why would you do it...?

Here is a quick guide to B Corp. I hope this answers any questions you have and inspires you on your journey.

What is B Corp?

B Corp was established in the US in 2006 by Jay Coen Gilbert, Bart Houlahan & Andrew Kassoy after they sold their basketball apparel company AND1. The B stands for benefit.

It’s a non profit global network that has grown to become a movement with over 6,600 certified members, operating in 89 countries in over 160 industries.

The B Corp certification process is rigorous. To become certified, you need to score a minimum of 80 points out of a maximum of 300. A lot of businesses do not pass on their first attempt. And certified businesses need to be re-assessed every three years. Ganni scored 90.6 (considered pretty good for a fashion brand) and has set itself the target of scoring 150 in its next re-assessment in 2025. Only one brand has ever scored as high as 150 and that’s Patagonia.

A certified B Corp company balances profit with purpose. The leaders of B-Corps believe that sustainable business is better business and that they can use their business as a force for good. It differs from traditional business models - where the primary purpose is driven by financial interest: deliver dividends to shareholders – the B Corp model goes much much further than this. It looks at its impact on all stakeholders, and measures its impact on society, community & the environment, its employees, its suppliers.

B Lab is the part responsible for certifying your business as a B Corp. B Lab want to help all businesses plan for a resilient future. They also work on policy that pushes for meaningful legal change around corporate accountability and social impact.

So in short, B Corp is the main body & B Lab are the auditors to get you there.

Who can apply?

It is sector agnostic—you do not need to be producing a product or service that in its own right is classed as sustainable. Certified members cover numerous sectors and include those from finance, pharmaceuticals, construction & tour companies.

The community is made up of sole proprietorships, small, medium & large scale business, including multinationals. Small to medium sized businesses account for over two thirds of the community. Patagonia, Ben & Jerrys & Danone are some of the international brands. At the time of writing there are 17 Irish brands and you can check out the full list here.

And if you were looking to understand why a business would go down this route, take a look at Strong Roots’ story.

What do they assess?

There are 5 key areas that will be assessed: governance, workers, community, environment & customers. B Lab will want to understand how you treat your workers - how are they paid (from the lowest earning individual to the head honcho). What leave entitlements they have, (including maternity & paternity). How you communicate to your customers. The B Impact Assessment also asks questions about a company’s governance structure and accountability. Questions are split into two categories: Operations, which covers a company’s day-to-day activities, and Impact Business Models, which awards additional points for business models designed to create additional positive impact.

A company must

• Prove themselves in five key areas to meet the standard demanded

• Demonstrate high social and environmental performance

• Make a legal commitment to change their corporate governance structure to be accountable to all stakeholders. This is particularly important in terms of safe guarding and securing these sustainable beliefs for the future, eg if the business was to be sold on

• Exhibit transparency by allowing information about their performance to be publicly available on their B Corp profile and on B Lab’s website

All companies register for the free (and confidential) B Impact Assessment. Complete a risk review. Gather your supporting information. You then take the assessment online. The next stages are evaluation. If you meet the 80 point threshold, you will pass to verification stage & the final stage is certification. Recertification then takes place every three years.

Certification can take 6-8 months for small to medium sized businesses. Larger business need to prepare for a longer verification process and this can take anywhere from a year upwards, depending on number of entities and any controversial elements.

Why would you do it?

Outwardly, the status sends a clear message to funders, investors, employees and suppliers about your business. It also brings commercial benefits. The high bar for treatment of staff is likely to attract top talent. It is also likely to draw in more customers—who we know are increasingly buying from companies that they believe behave ethically. They want, rightly so, to see action from the companies that profit from their spending.

ESG metrics — environmental, social, and governance — will be used by every investor within five years to judge a company's performance. These already form key pillars within B Corp and we have already started to see how companies are beginning to embed these into their own business plans as pillars to report and benchmark against.

If you are passionate about sustainability. If it’s already part of your culture. Or you have some form of a sustainability strategy this could be the next natural step you make as a business.

It can be a long process and you need to be able to substantiate all environmental and social claims your business makes. You need to document all your evidence and for some businesses the biggest challenge in the certification process is actually collecting all of this data and consolidating in one place.

But you can learn and share best practice among this B Corp community.

Ok so how much does it cost?

All companies submitting their B Impact Assessment for verification for the first time are subject to a non-refundable submission fee. This is based on your turnover and ranges from €250 (for businesses with turnover less than €5m) to €900 (businesses with turnover in excess of €100m). Once certified you then continue to pay a regular annual fee, which are calculated based on your company’s total revenue.

Anything else I should know?

While the B-Corp certification has faced some criticism because of the fact that it relies on self-reporting from brands, for the moment it is the best way for companies to measure their environmental and social impact against that of other companies, in lieu of legislation being introduced across the board.

“I’d rather commit to a standard like this one and try to do better every day, than wait for the ultimate standard,” Ganni’s founder Nicolaj Reffstrup concludes. “That’s often what happens – we are all waiting for someone to impose a carbon tax or regulate our way out of this, or for the industry to come together behind some standard, and nothing happens because everybody is waiting for everybody else.”

One more thing

The SDGs Sustainable Development Goals (SDGs) are a universal set of 17interconnected goals and targets adopted by all UN Member States in 2015 “as an urgent call for action by all countries - developed and developing”. It sets out a blueprint for a sustainable future. The goals recognize that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve our oceans and forests”. Most targets are to be achieved by 2030, although some have no end date.

Covid, climate change & conflict have all had a serious negative impact on every single SDG. It has only served to highlight the interconnectedness of poverty, inequality, food and disease. The cost of meeting the targets has risen 25% to $176 trillion over the past year (Reuters) with performance on several measures reversing.

If you needed any more convincing on whether you should consider B Corp – these goals should serve as your new “north star.”

Conclusion

One thing that seems to be common to all members of the B Corp community is the desire that business can be used as a force for good. There is an appetite to do better by all stakeholders and an awareness that individuals and businesses cannot standby and expect governments to do the needful.

Anita Roddick was ahead of her time. She set up the first Body Shop first store in 1976. By 1991 she had 700 branches. Bodyshop White Musk can take me all the way back to being 12 years old. In the 80s you used to be able to buy it in a small plastic refillable bottle. I spent my first year in secondary school writing away to PETA & Greenpeace asking them to send me more information on their organisations. I didn’t know exactly why I was doing it at the time, but I knew that the Body Shop was a place I liked and they were standing up for something (animal rights, diversity & inclusion, equality among other things) & I wanted to make a difference.

I’m more hopeful that my kids will grow up in a world where B Corp industries will mean that more and more people will naturally want to run their operations as a force for good and use their power and influence to raise awareness for social & environmental causes. That working towards the greater good becomes a given.

Because so much has already been taken.