How to manage sub-requirements with conditions or options

Modified on Mon, 23 Feb at 9:59 AM

Sub-requirements with conditions

List of conditional sub-requirements

Sub-requirements that have options

List of sub-requirements with options

This article explains how a company can indicate if a sub-requirement is not applicable. This can occur in two instances:

Some sub-requirements are conditional. They usually include an “if” in a compliance criterion, in the sub-requirement text or in another binding section. For example, PSG5.4 is applicable if the company has an existing incentive remuneration scheme.
Some sub-requirements require the company to choose from a set of options.. The options the company did not choose do not apply. For example under GACA2.1 companies can choose from 5 options of collective action.

In all other cases the sub-requirement of the selected track applies.

Sub-requirements with conditions

If a sub-requirement with conditions does not apply to the company, follow these steps:

Provide a brief explanation: clearly state why this sub-requirement does not apply. This can be done in a document uploaded under Evidence. In the Document Hub the field ‘Notes to assurance’ can also be used when attaching evidence.
Update the status field (Optional): The status field in B Impact is an optional project management tool for companies and not mandatory to set. While not mandatory, many companies may find it helpful to mark the sub-requirements where they do not meet the specific condition as "Done" for their internal management.

List of conditional sub-requirements

Sub-requirement ID	Sub-requirement Text	Condition	Explanation & Consideration
PSG2.5	The company considers its stakeholders when making decisions about dividends and stock buybacks.	Applying the Criteria to Independently Certifying Subsidiaries: This sub-requirement only applies to companies who have ultimate control over the payout of dividends and decisions regarding stock buybacks.	This condition means that this sub-requirement would likely be not applicable for an independently certifying subsidiary as in most cases the parent company would have the ultimate control over the payout of dividends and decisions regarding stock buybacks. In case the company is not an independently certifying subsidiary but did not have any decisions related to the payout of dividends and decisions regarding stock buybacks, the company can provide an explanation and supporting evidence, for instance the meeting minutes from the highest governing body or public reports.
PSG5.4	If the company has an existing incentive remuneration scheme for the executive team, it integrates social and environmental performance targets. Sub-requirement text: If the company has an existing incentive remuneration scheme for the executive team, it integrates social and environmental performance targets.	This condition means that if the company does not have an incentive remuneration scheme for the executive team, then the sub-requirement is not applicable.	An incentive remuneration scheme is considered to exist when executive management compensation includes variable components tied to performance. For example, if a company distributes executive compensation based solely on a fixed percentage of profit, without tying it to individual performance goals, it is not considered a formal incentive scheme.
ESC1.6	The company monitors the animal welfare conditions in its operations.	Clarifying the Compliance Criteria 1.6.1; 1.6.2; 1.6.3: “This sub-requirement applies only to cases where the company is directly involved in the raising, transportation, and slaughtering of animals and does not include the purchase of animal products from third parties.”	There may be instances when there is impact on animals in the company’s operations but not due to the company being involved in the raising, transportation, and slaughtering of animals. For instance a food manufacturer may be subject to mandatory health and safety legislation and apply pest control.
ESC2.2	The company has a biodiversity transition plan to halt and reverse biodiversity loss caused by its operations and value chain.	Clarifying the Compliance Criteria 2.2.1, 2.2.2; 2.2.3; 2.2.4; 2.2.5: “This sub-requirement only applies if the company identifies biodiversity-related impacts as material in its assessment of environmental impacts [link to ESC1.7].”	If biodiversity was deemed not material the company can reference the evidence submitted for ESC1.7 under the Compliance Criteria ESC1.7.4: If water, biodiversity, and waste were not deemed material, the company records a written explanation why. The written explanation: a) includes credible scientific evidence b) is approved by the highest governing body or executive team.
ESC4.3	The company makes progress on its biodiversity transition plan and evaluates its effectiveness.	Clarifying the Compliance Criteria 4.3.1; 4.3.2; 4.3.3; 4.3.4; 4.3.5; 4.3.6: “This sub-requirement only applies if the company identifies biodiversity-related impacts as material in its assessment of environmental impacts [link to ESC1.7].”	Same as ESC2.2.
ESC2.3	The company has a water stewardship strategy that limits water use in its operations and value chain to within sustainable thresholds.	Clarifying the Compliance Criteria 2.3.1; 2.3.2.; 2.3.3; 2.3.4: “This sub-requirement only applies if the company identifies water-related impacts as material in its assessment of environmental impacts [link to ESC1.7].”	If water was deemed not material the company can reference the evidence submitted for ESC1.7 under the Compliance Criteria ESC1.7.4: If water, biodiversity, and waste were not deemed material, the company records a written explanation why. The written explanation: a) includes credible scientific evidence b) is approved by the highest governing body or executive team.
ESC4.4	The company makes progress on its water stewardship strategy and evaluates its effectiveness.	Clarifying the Compliance Criteria 4.4.1; 4.4.2; 4.4.3; 4.4.4; 4.4.5: “This sub-requirement only applies if the company identifies water-related impacts as material in its assessment of environmental impacts [link to ESC1.7].”	Same as ESC2.3.
ESC3.1	The company monitors its material inflow.	Clarifying the Compliance Criteria 3.1.1; 3.1.2; 3.1.3: “This sub-requirement applies to products the company produces or has produced on its behalf. Products the company resells may be exempted (e.g. in the case of wholesale/retail). For companies in the Service with Significant Footprint and Agriculture/Growers sectors, this sub-requirement only applies if the company sells a physical product and has control over their production.”	For companies outside the Manufacturing sector (or those that do not own manufacturing facilities), the key distinction is whether the company contracts a factory to produce products on its behalf or simply purchases finished goods for resale. If a company only resells finished products—without outsourcing production of products designed or specified by the company—this sub-requirement does not apply. Examples: An online retailer that sells products purchased as finished goods, and does not contract manufacturers to produce its own branded or specified products, would not be subject to this sub-requirement. If a company in the Agriculture sector grows grapes and sells them in bulk to a third-party winery, this sub-requirement does not apply. If a company grows the grapes and manages the process of fermenting, bottling, and selling its own branded wine (through a third party or on their own), the sub-requirement does apply.
ESC3.2	The company reduces its use of virgin non-renewable materials.	Clarifying the Compliance Criterion 3.2.1: “This sub-requirement applies to products the company produces or has produced on its behalf. Products the company resells may be exempted (e.g. in the case of wholesale/retail). For companies in the Service with Significant Footprint and Agriculture/Growers sectors, this sub-requirement only applies if the company sells a physical product and has control over their production.”	Same as ESC3.1.
ESC3.3	The company’s product development incorporates circularity principles.	Clarifying the Compliance Criteria 3.3.1; 3.3.2; 3.3.3; 3.3.4; 3.3.5: “This sub-requirement applies to products the company produces or has produced on its behalf. Products the company resells may be exempted (e.g. in the case of wholesale/retail). For companies in the Service with Significant Footprint and Agriculture/Growers sectors, this sub-requirement only applies if the company sells a physical product and has control over their production.”	Same as ESC3.1.
ESC3.4	The company understands the recovery infrastructure available where it sells its products.	Clarifying the Compliance Criteria 3.4.1; 3.4.2; 3.4.3; 3.4.4: “This sub-requirement applies to products the company produces or has produced on its behalf. Products the company resells may be exempted (e.g. in the case of wholesale/retail). For companies in the Service with Significant Footprint and Agriculture/Growers sectors, this sub-requirement only applies if the company sells a physical product and has control over their production.”	Same as ESC3.1.
ESC3.5	The company takes steps to increase the recovery of its products and packaging after their end-of-life.	Clarifying the Compliance Criteria 3.5.1; 3.5.2; 3.5.3: “This sub-requirement applies to products the company produces or has produced on its behalf. Products the company resells may be exempted (e.g. in the case of wholesale/retail). For companies in the Service with Significant Footprint and Agriculture/Growers sectors, this sub-requirement only applies if the company sells a physical product and has control over their production.”	Same as ESC3.1.
CA3.1	If the company has an existing incentive remuneration scheme for the executive team, it integrates climate targets.	Sub-requirement text: If the company has an existing incentive remuneration scheme for the executive team, it integrates climate targets.	This condition means that if the company does not have an incentive remuneration scheme for the executive team, then the sub-requirement is not applicable. An incentive remuneration scheme is considered to exist when executive management compensation includes variable components tied to performance. For example, if a company distributes executive compensation based solely on a fixed percentage of profit, without tying it to individual performance goals, it is not considered a formal incentive scheme.
FW1.2	The company has equal cancellation periods when using variable schedules.	Compliance Criterion 1.2.1: “If the company uses variable schedules…”	If the company does not use variable schedules then this sub-requirement does not apply. See FW1.2 for how “variable schedules” is defined.
FW2.4	The company calculates its gender wage gap.	Compliance Criterion 2.4.1: “The company has calculated its gender wage gap for each country with at least 250 employees (based on headcount).”	A company may be “Large” and therefore see this sub-requirement, but not have 250 employees based on headcount in a single country, meaning this sub-requirement would not apply.
FW2.5	The company publicly shares its gender wage gap or gaps.	FW2.5 only applies if FW2.4 applies	If FW2.4 does not apply (see above), then FW2.5 would also not apply.
FW2.6	The company maintains a closed gender wage gap, reduces the gap, or justifies why the gap is not sufficiently closed.	FW2.6 only applies if FW2.4 applies	If FW2.4 does not apply (see above), then FW2.6 would also not apply.
FW2.7	The company evaluates equal pay for work of equal value.	Compliance Criterion 2.7.1: “The company carries out a gender-neutral job evaluation for each country with at least 150 workers (based on headcount).”	A company may be “X Large” and therefore see this sub-requirement, but not have 150 workers based on headcount in a single country, meaning this sub-requirement would not apply.

Sub-requirements that have options

If a sub-requirement includes options, please follow these steps:

Share evidence for the selected option(s): Select the option(s) for which your company has a strong evidence for and upload it under Evidence. The number of options the company needs to select are specified under the Compliance Criteria.
Update the status field (Optional): The status field in the B Impact is an optional project management tool for companies and not mandatory to set. Nevertheless, your company could indicate the selected option as "Done" once the evidence has been uploaded and indicate “Not Applicable” for the options not selected. The “Not Applicable” option is a valid status category for these sub-requirements.

List of sub-requirements with options

Sub-requirement ID	Sub-requirement Text
FW2.8	The company implements fair wage practices for its lowest-paid employees.
JEDI2	The company chooses and implements JEDI actions.
ESC3.3	The company’s product development incorporates circularity principles.
GACA 2.1	The company takes part in collective action to advance social or environmental impacts.
GACA2.3	The company takes part in collective action to advance social or environmental impacts.