1. What exactly is changing in how B Lab determines a company's size?
2. Why is B Lab making this change now?
3. How does the previous method disproportionately affect companies in the Global South?
4. Does this change mean B Lab is lowering the bar or reducing the rigor of the B Corp Standards?
5. What are the key benefits of this change for my company?
6. How many companies will be impacted by this change?
10. Why not base it just on revenue if that reflects the capacity of a company globally?
1. What exactly is changing in how B Lab determines a company's size?
Previously, B Lab used the "Greater of Two" rule, classifying your size based on the higher of your annual revenue or your number of workers. We are moving to the "Lesser of Two" rule. Your size classification will now be determined by the lower of your annual revenue or your number of workers. This may result in a company size being reduced, in turn, reducing the requirements a company must meet in order to certify.
2. Why is B Lab making this change now?
This change comes as we prepare to audit the first companies on the new V2.1 B Lab Standards in February 2026.
It is important to make this change now to avoid unintended and disproportionate consequences as we begin to certify B Corps on the new B Lab Standard. We will continue to monitor this new approach over time, looking for outliers and assessing any missed impact.
While the foundational principle – that standards should scale with a company's capacity and impact – remains sound, the previous "Greater of Two" rule presented some challenges:
Unfair Classification for smaller companies: It often pushed companies, especially Small and Medium Enterprises (SMEs) and those in the Global South, into higher size categories than their actual operational capacity or financial resources could manage.
Cost: This resulted in higher verification costs and more complex requirements, creating a barrier to participation and posing a major risk to retaining valuable B Corps, particularly SMEs.
3. How does the previous method disproportionately affect companies in the Global South?
Many companies in the Global South employ a higher number of workers relative to their revenue, often due to structural or regional economic factors (including exchange rate impacts when using a $ baseline).
Under the old rule, these businesses were "bumped up" into higher size tiers because of their high worker count, despite having the revenue and capacity of a smaller company.
The "Lesser of Two" rule corrects this, ensuring that classification truly reflects a company’s operational scale and capacity, leading to a much more equitable standard.
4. Does this change mean B Lab is lowering the bar or reducing the rigor of the B Corp Standards?
Absolutely not. We will continue to ensure rigor while giving companies the best shot of continuing on their impact journey and driving continuous improvement.
The standards themselves are not changing - this is about providing a better fit. This is a change to the denominator (how we determine your size and therefore your applicable requirements), not the numerator (the requirements themselves).
This is an issue of fairness, equity, and sustaining participation, ensuring the standards are feasible without over-burdening companies. We maintain the core principle that requirements must scale with a company's actual capacity.
5. What are the key benefits of this change for my company?
This shift provides immediate, tangible benefits:
Accessibility & Feasibility: It reduces implementation barriers for SMEs and supports the equitable growth of Global South businesses within the B Corp community.
Credibility & Equity: It ensures your size classification is not skewed by operating model or regional differences.
Financial Savings: It will result in significant financial savings for over 2,500 B Corps, many of them SMEs, by correctly placing them in the appropriate size tier, often avoiding the higher verification costs associated with larger categories.
6. How many companies will be impacted by this change?
Around 24% of the existing global B Corp Community will be impacted by this change - that’s around 2500 B Corps.
7. What does this mean for my company if we’re already on the path to recertifying on B Lab Standards V2.1?
You won’t need to do anything differently. The changes will be automatically applied to your Setup and Self-Assessment in B Impact, resulting in your company meeting fewer requirements in order to certify. You will receive a notification in the B Impact platform.
Please note, in your B Impact account, the Scoping Memo (under the Setup > "Scope" tab) will be updated to reflect your company’s new size, but the validated date should remain the same.
8. What if I’ve already completed the majority of my company’s Self-Assessment with my current track? If my company size is reduced, in turn reducing the requirements I need to meet to certify?
Many of the requirements you are meeting within your Self-Assessment will still be applicable for your company’s context - many practices are required at all levels of the new B Lab Standard. However, there may be cases where your company has been working towards requirements that will no longer be applicable to your new company size. We understand that could be frustrating, but no efforts to improve social, environmental and governance performance are wasted.
9. Will this change make the requirements easier for some of the larger companies as this impacts them as well as making it fairer for smaller companies?
The standard itself remains unchanged; all B Corps will continue to have to meet the V2.1 standard over the course of their 5 year certification cycle.
However, this change ensures that companies are held to the right tier, so compliance effort and the expectation of continuous improvement matches their real capacity. Unintentionally allocating companies to an incorrect tier increases the risk of making the standard unattainable for that company.
10. Why not base it just on revenue if that reflects the capacity of a company globally?
B Lab and the Standards Oversight Committee considered multiple avenues when making this decision, including an option to base company sizing on revenue only. It was deemed that the "Lesser of Two" solution was the most appropriate, maintaining the principle of scaling requirements with company capacity, without over-burdening smaller companies during this time of transition. This is critical to maintaining the dynamic B Corp community of today whilst giving companies the best shot at meeting the new standard and improving their impact performance over time.
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