With ESG firmly on the radar, many founders embarking on their entrepreneurial journey approach us to discuss B Corp certification.
What is a B Corp?
So, what is a B Corp? A B Corp is a company that has been certified by B Labs for voluntarily meeting high standards of verified performance in various environmental and social performance metrics.
What are the benefits?
Becoming certified as a B Corp means that you will join a community of like-minded companies, that uphold the same rigorous standards of social and environmental responsibility. Access to this community comes with various benefits including:
- Establishing business relationships: access to the B Corp community allows networking with business leaders from other B Corps.
- Attracting talent: strong values, backed by B Corp Certification, can be helpful in your company's recruitment process, as much of the modern workforce align with such B Corp values.
- Use of B Corp seal: once a business becomes B Corp Certified, it can apply the B Corp seal to its products and services. This instantly recognisable seal provides an element of third-party validation, which may elevate the status of products and services. B Corp Certification is becoming an ever more increasing requirement in tenders for certain sectors.
What is the process?
Any company with at least a year of commercial operations can apply to become a B Corporation using the following steps.
Pre-certification:
- Complete a B Impact Assessment: this is an online tool covering around 200 questions on the company's impact on its key stakeholders and assessing best practices on mission and governance. The company must also complete a confidential disclosure questionnaire (to disclose any sensitive practices, fines or sanctions). A company needs to score at least 80 points before submitting their B Impact Assessment for B Corp Certification.
- Update Articles of Association: a company's Articles of Association must be updated to meet the so-called 'B Corp Legal Requirement', which is a mandatory change to include specified B-Corp mission-aligned legal statements: Legal requirement – B Lab UK (bcorporation.uk) (the exact language, which must be included without amendment, can be found here: Legal requirement Sept 2018. Pdf – Google Drive).
Submission of B Impact Assessment:
Once a company has scored +80 points on the B Impact Assessment, the company can submit their assessment to B Lab to begin the review and certification process. This will include providing supporting documentation and having a review call with an analyst to discuss the B Impact Assessment in more depth. Once the submission and verification process has been completed, the company needs to sign the B Corp Agreement and pay an annual certification fee
Post-certification:
- Reverification: all B Corps must recertify every three years by updating their B Impact Assessment.
- Annual Impact Reporting: during the two-year period between re-certification, all B Corps must publish an annual impact report, which should be circulated to key stakeholders, investors and published on the company's website.
- Annual Fee: Once certified, an annual fee applies and is calculated on the company's last set of audited accounts (Pricing - B Lab UK (bcorporation.uk)).
What if my company has not been trading for more than a year?
If your company is not eligible to become a B Corp, you can instead apply for Pending B Corp status. The application process to become a Pending B Corp is largely the same as applying to become a B Corp, but with a few key differences.
Pre-certification:
As above, you must update your company's articles of association and complete a B Impact Assessment. The B Impact Assessment will not be verified by B Lab at this stage but is required to teach you about the B Corp standards and how you can prepare your company to attain B Corp status.
Pending B Corp Agreement:
Once the above steps have been completed, B Lab will provide you with an agreement which outlines further details about Pending B Corp status. A fee is payable to enter into this contract. However this is not a fixed amount and will be determined by your local B Lab organisation.
Post-certification:
After your company has traded for more than a year, it can then apply for B Corp status. To do so, you will need to follow the application process set out above.
Full details of the B Corp Certification Process can be found here: The B Corp Certification Process.
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