TABLE OF CONTENTS

• Introduction
• What information do I need to complete this section?
• What does “core function” mean for a company?
• What are the possible outcomes of this section? 

Introduction

The certification setup experience will take you through a personalized questionnaire to check your company's eligibility for certification based on its ownership type and nature of operations. 

The purpose of the Scoping: Related entities section in the certification setup is to collect information about your company’s organizational structure so that you know which entities in your organization need to be included when completing the assessment and meeting the legal requirement.  This is the third section in the certification setup journey.  

What information do I need to complete this section?

This section includes questions about your company’s related entities, such as parent companies or subsidiaries, shared branding or operations to determine the scope of operations to be included in the assessment.

But, why does B Lab need a detailed list of all holding companies, sister entities, joint ventures, and dormant sites when the company only wants to certify a single, main operating brand?

It is a completely fair question. It is highly likely,  and completely normal,  that your desired certification scope – meaning the group of legal entities, sites, employees and brands you intend to certify -– is smaller than the comprehensive set of data we are asking you to provide. 

However, B Lab cannot verify the independence of your desired certification scope without analyzing your entire corporate structure of entities that you share a name, ownership or operations with.

Therefore, it is essential for us to collect the following information about your company, if applicable:

• The list of parent entities and their respective ownership percentage of your company

• The list of parent entities that are independently owned

• The list of parent entities that are non-operational holding entities

• The list of parent entities that have other majority-owned, consolidated, or controlled subsidiaries

• The list of individual persons and their respective percentage of ownership of your company

• The list of names and percentages of all of your company’s subsidiaries

• Any shared branding or website between your company and another entity 

• Any shared core functions between your company and another entity

• Any shared employees on payroll or revenues in the same country as the parent company

Without this complete mapping, we run the risk of certifying an entity that relies on non-certified operations for its sustainability claims, which violates our core value of transparency and might confuse consumers about what is certified versus what is not. 

What does “core function” mean for a company?

A “core function” of a company is typically characterized as the executive team functions, workers, facilities or supply chain.

What are the possible outcomes of this section? 

Some companies will receive an automated Scoping decision while others will have to undergo a manual review with one of B Lab’s setup specialists. 

1.Automated Scoping decision

You can expect the one of the following outcomes: 

• No additional companies are in scope: Your certification scope summary confirms that only your company is in scope.

• Additional companies must be considered: Your certification scope summary lists the multiple entities that are determined to be in your company’s scope and/or required to complete the legal requirements. 

Please note that some Large–XXL companies may still be required to manually verify their scope with a B Lab setup specialist after receiving an automated decision. If you have questions, please reach out to your region’s Global Partner.

2.Manual review required

If your company’s structure is too complex for an automated decision, you will see that a manual review is required. You must click “Submit for review” so that a B Lab’s setup specialist can review your company’s information and issue a tailored certification scope following B Lab’s scoping rules. 

Manual review is required if any of these attributes apply to your company: 

• Company has more than 1 parent company 

• Company has some unlisted owners (ownership in focus entity is less than 100%) 

• Company has parent companies that are not independently-owned 

• Company has parent companies that have other subsidiaries 

• Company has more than 15 subsidiaries

• Company share operations or brands with other entities not mentioned

• Company does not have decision-making authority over policies and practices  

A manual review does not mean that a company is not able to pursue certification, only that a person must assist in determining the full scope of entities required for the certification.

Your scope’s validity period is 12 months from the certification setup submission date.

For more details, see “Understanding your Certification Scope in B Impact”.