Which companies does this requirement apply to?
What are FR3.1 and the Risk Tool?
User experience and future changes
Will my company become ineligible if I answer “yes” to any question?
When do I have to meet the added requirements?
What do I do if I’m unsure about an answer?
What happens to the risk standards under version 6 of the standards?
Why do FR3.1.a to FR3.1n look different to other sub-requirements?
Which companies does this requirement apply to?
If your company is considered small or above (at least 10 workers or $2 million in annual revenue), then this article will be applicable. If your company is considered micro or a company without workers, then you are exempt from FR3.1 and you can skip this process entirely. Identify your company size with this table. Read this article for more information about company size.
What are FR3.1 and the Risk Tool?
FR3.1 is one of several ways our new standards tackle a company’s potential negative impacts (i.e. risks).
Companies meet FR3.1 via the Risk Tool. The tool consists of 14 questions representing priority risky practices that are not specifically addressed elsewhere in the standards. Depending on a company’s responses, specific sub-requirements will be added to their assessment.
These additional requirements represent due diligence practices—the steps companies take to identify, prevent, and mitigate their negative impacts— ensuring that risky practices are met with more due diligence.
The company is also expected to consider the risk when meeting those additional due diligence requirements (e.g. considering the risk in a materiality assessment). The answers to the 14 questions are displayed on the B Corp public profile.
Companies without workers and micro-sized companies are exempt from FR3.1, recognizing their inherently lower risk profiles.
Questions
There are 14 questions in total. Each question corresponds to a risky practice and is answered with a “yes” or “no”. The tool provides guidance and definitions.
Additional requirements
The additional requirements that can be activated come from the three Impact Topics that represent the core of our due diligence expectations: Purpose & Stakeholder Governance, Environmental Stewardship & Circularity, and Human Rights.
The activated requirements are tailored to company size and sector.
In most cases, answering “yes” adds one or more requirements. In some cases, the added requirement replaces another. For example, the company may have to meet PSG3.4 instead of PSG3.2 that applied before, meaning the company reports on grievances in addition to tracking and assigning accountability for resolving them.
It may happen that the activated requirement is already required, in which case it is not added. So larger companies will likely see fewer requirements being added as those activated requirements are already required.
The added requirements are met as part of the regular verification and certification process. It is therefore important that companies complete the Risk Tool well in advance of applying for (re)certification.
Answering “no” results in no action.
Examples
A small company generates 50% of revenue from selling alcohol, which has known negative health impacts on consumers. It answers “yes” to the question about selling harmful products. As a result, it completes a human rights saliency assessment that would otherwise not be required. In that assessment, it considers if health impacts on consumers is a salient (i.e. most relevant) human rights issue. It also creates a human rights strategy and evaluates its effectiveness over time.
An XXL company generates 15% of revenue from selling hazardous chemicals. It answers “yes” to the question about selling chemicals. All due diligence requirements already apply given their size, so there are no requirements to add. However, it must consider the environmental risks of hazardous chemicals in the environmental impact assessment that was already required. If material, the risk is further addressed through other due diligence requirements in ESC.
User experience and future changes
The Risk Tool is being integrated into B Impact as an automated, interactive feature. In the meantime, to give companies more time to prepare, we created FR3.1.a to FR3.1n to temporarily share the 14 questions and resulting requirements from answering “yes”. This is a temporary layout using the existing sub-requirement structure.
Future changes
We intend to evolve the Risk Tool over time. We may edit and update the questions to ensure we continue capturing the priority risky practices. We may also update and expand the sources of information or extra expectations.
What to do next
If your company is small or above, review and answer the 14 questions. If you answer “yes” to any questions, look at the additional expectations and start implementing them. All requirements can be found in the PDF version of the standards.
When responding to the questions, read the provided guidance and definitions. Answer the questions conservatively—meaning if you’re in doubt, answer “yes”.
In the future, these steps will be part of B Impact, making it easier to see and complete the added requirements. In the current temporary format, you do not need to enter or inform us of your answers.
Frequently asked questions
Will my company become ineligible if I answer “yes” to any question?
No. Ineligible industries are covered by Foundation Requirement 1.2. Foundation Requirement 3.1 can only result in the additional due diligence expectations explained in this article.
When do I have to meet the added requirements?
The added requirements are met by the Year stated in the specific sub-requirement. For example, if the company has to create a human rights strategy (HR2.3) then it does so by Year 3. The applicable Year never changes.
The added requirements are met as part of the regular verification and certification process.
What do I do if I’m unsure about an answer?
Read through the guidance and definitions. Answer the question using the precautionary principle to risk. If you remain unsure, then answer “yes”.
What happens to the risk standards under version 6 of the standards?
They only apply to version 6 and not the new standards.
Why do FR3.1.a to FR3.1n look different to other sub-requirements?
The Risk Tool is being integrated into B Impact as an automated, interactive feature. In the meantime, to give companies more time to prepare, we created FR3.1.a to FR3.1n to temporarily share the 14 questions and resulting actions from answering “yes”. This is a temporary layout using the existing sub-requirement structure, which is why the content looks different.
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