Integration of the Baseline Requirements into the new B Lab Standards

• Introduction 
• Key Takeaways 
• Guidance on the integration of the baseline requirements into the new B Lab Standards (focus on XXL companies) 
  • Reporting
  • Materiality Assessment
  • Materiality Issue Management
  • Tax & Government Affairs Disclosure
  • Human Rights Policy

Introduction 

To achieve B Corp Certification under Version 6 (“V6”) of the B Impact Assessment, companies with annual revenue of US$5 billion or more must meet minimum baseline requirements alongside the core certification requirements. These include adopting stakeholder governance, achieving an overall verified score over 80 on the B Impact Assessment, and successfully completing the Disclosure Review process for controversial issues. 

These additional requirements reflect the greater scale, influence, and responsibility of these companies, ensuring that Certified B Corps of this size demonstrate strong, verified performance on key social and environmental issues in addition to achieving a score of 80 or above on the B Impact Assessment. 

In November 2023, the Multinational Standards Advisory Council (MNC SAC) approved the integration of the Baseline Requirements into the new B Lab Standards. Aligned with B Lab’s new company size categories, these requirements primarily apply to XX Large and X Large companies, but may also apply to smaller companies, with compliance criteria scaled based on  company size and impact to reflect business relevance. 

The sub-requirements apply to both parent companies and independently certifying subsidiaries, with adjustments made accordingly. As a result, all sub-requirements for US$5billion+ Certified B Corps pursuing recertification are now incorporated under the new B Lab Standards.

Given their complexity, some of the Baseline Requirements have been broken down and separated into several sub-requirements across the various impact topics. To accommodate varying governance structures, the term "Board of Directors" has been replaced with "highest governing body within the scope of certification." This ensures that oversight responsibilities rest with the most relevant governing body—whether at the subsidiary or parent level—recognizing that subsidiaries often follow group-wide policies that may not be directly overseen by the parent board. 

Certified B Corps that have had their Baseline Requirements approved are likely to already fulfill many of these new integrated sub-requirements. However, additional compliance criteria may apply. These companies are strongly encouraged to conduct a gap analysis to identify any areas requiring further action to align fully with the new Standards. 

This guidance outlines for each Baseline Requirement:

a) The corresponding sub-requirement under the new B Lab Standards 

b) Any changes to compliance criteria 

c) Adaptations for smaller companies where applicable

Key Takeaways 

The existing Guidelines for Acceptance remain largely applicable and have been integrated into the new B Lab Standards, however, most corresponding sub-requirements now include expanded compliance criteria. 

The most significant change to the original Baseline Requirements involve aspirational goal setting and the grievance procedure.

• Governance oversight previously assigned to a Board of Directors is now designated to the highest governing body within the scope of certification, recognizing the diversity of governance structures across B Corps. Additional requirements under PSG5 require highest governing bodies to oversee social and environmental impacts as well as stakeholder considerations, ensuring that these are integrated into the company’s strategy and operations. 

• A company’s highest governing body within the scope of certification will be identified during the pre-verification process. For instance, the highest governing body of a parent company would be different to that of a subsidiary pursuing independent certification. Reliance on the parent company’s Board is no longer sufficient. This shift ensures accountability for implementation and meaningful application of group policies at the certifying level. 

• Impact reporting must now be overseen by the highest governing body to ensure top-level accountability for transparency and performance.

• The grievance procedure has been separated from the materiality assessment and is now treated as a stand-alone requirement (PSG3), with an emphasis on oversight, transparency, and accountability. This recognizes that many existing grievance mechanisms are not used effectively, and therefore companies are required to disclose sufficient information to ensure the adequacy of the company response as well as implementing management and company learnings. 

• Aspirational goals have been removed and replaced with PSG2.4, which asks companies to set targets and report annual progress on material topics not addressed in the B Lab Standard through a gap analysis. This is because formerly acceptable aspirational goals, such as setting science-based targets and living wage goals, now sit in their own sub-requirements. The new Standards set a high bar for larger companies, and PSG2.4 ensures that the company’s B Impact Assessment provides a holistic overview of a company’s impact. 

• Lobbying disclosures have been strengthened to include mandatory reporting on political contributions. 

• Country-by-country tax reporting is now required as part of the broader tax disclosure, and both parent companies and subsidiaries must meet this requirement.  

• Companies are no longer able to meet the human rights policy requirement by either committing to the key human rights covenants or by identifying their salient human rights issues; a formal human rights policy is now required with specific compliance criteria.