ESC 2.6: How to assess and mitigate the potential environmental impact of working with clients and projects

• What is ESC2.6 in the B Lab Standards V2.1? 
• How to identify your most material potential clients or projects
• How to assess materiality of a client’s or project's potential negative environmental impact
• How to mitigate the potential negative environmental impact
• Additional Recommendations & Guidance

Clients and projects play a critical role in a service company’s environmental footprint. To ensure that Certified B Corps select clients and projects with environmental impacts in mind, the B Lab Standards V.2 require  companies in certain industries on the Service with a minor footprint track to assess the negative environmental impacts related to potential organizational clients and projects, and take necessary mitigation actions. 

This article How-To Guide explains how companies can meet sub-requirement ESC2.6, using a practical, proportional, and integrated approach that leverages environmental due diligence. Add ref to HR3.3

What is ESC2.6 in the B Lab Standards V2? 

Companies on the Service with a minor footprint track may have indirect environmental impacts through their choice of clients and projects. For example,an advertising firm may contribute to potential impacts by marketing products that encourage overconsumption and exacerbate climate change. To address these indirect impacts, ESC2.6 asks that companies assess the negative environmental impacts related to potential organizational clients and projects, and take necessary mitigation actions.

This standard seeks to reduce the likelihood of contributing to greenwashing or other negative consequences. The intent is not to prohibit specific clients or projects, but rather to ensure that a sustainability lens is applied while selecting clients or projects to work with, so that any mitigation action can be taken to address potential negative environmental impacts. 

Categories of potential negative environmental impacts may include, among others, contributing to: climate change, pollution of water, soil, air, or noise, loss of biodiversity or other environmental degradation, exploitation and extraction of natural resources, waste and pollution.

How to identify your most material potential clients or projects

“Organizational client” means clients that are organizations, including businesses, public sector organizations and civil society organizations. It excludes individuals. You can determine your  most “material” clients or projects by considering the following:

• Revenue from the project or client,

• Number of hours involved in working with said client, or

• Importance of a potential negative environmental impact

If the company has multiple projects with one client, it does not need to reassess that client. The company may also assess related clients in groups — such as subsidiaries of the same corporate family. However, it still needs to assess each project individually."

How to assess materiality of a client’s or project's potential negative environmental impact

You can assess clients’ or projects potential negative environmental impacts by:

• Conducting online research of potential clients, such as their:

  • Participation in sustainability initiatives

  • Scores in public benchmarks and rankings

  • Certifications that the client has earned 

  • Impact reports and other public commitments

  • Approach to assessing and mitigating their own environmental impacts

• Having an internal committee that reviews clients and projects

• Gathering worker or peer feedback on a potential client or project

• Setting exclusion criteria — for example, not working with specific high-risk industries, countries, or clients (examples include fossil fuels, nuclear power, mining, tobacco, weapons manufacturing, defense, etc.)

• Creating a risk matrix to evaluate industries or clients based on the severity and likelihood of potential impacts and the client's mitigation measures.

This is an illustrative list of examples – you may use other methods. 

Methodology and Considerations for Assessing Materiality of a Client’s Potential Negative Environmental Impact

You must consider both the likelihood and severity of the impact, with severity being the most important. Therefore, even if an impact is unlikely, but severe – it should be prioritized.

Key Principle: Severity outweighs likelihood.

This ensures that environmental impacts with potentially irreversible or long-lasting consequences are prioritized even if they occur infrequently.

Severity

Severity is assessed based on one or more of the following:

Scale: How serious would the environmental harm be?

Scope: How widespread would the impact be across ecosystems, species, or geographies?

Ease of Remediation: How difficult would it be to restore the environment to its prior state?

An impact has low ease of remediation when recovery is extremely difficult or impossible. This does not mean lower-severity impacts should not be addressed — severity is used to support prioritization.

Example severity categories:

• High — major, irreparable, and long-lasting damage

• Medium — significant and lasting damage

• Low — minor, temporary, or reparable damage

Assessing Environmental Impact Materiality - Severity & Likelihood

Likelihood

Likelihood considers:

• how probable the impact is

• how frequently it may occur

Example likelihood categories:

• High — continuous

• Medium — regular (monthly to several times per year)

• Low — occasional or phase-specific

"We are all aware that there are businesses out there that don’t act in good faith to mitigate their environmental impacts, a clear example being the fossil fuel industry, but what we have found is that there are often a lot of projects where companies are not always sure if we’re supporting unintended negative environmental impacts." –  Kate Harvey, Pure Strategies 

How to mitigate the potential negative environmental impact

Additional Recommendations & Guidance

• If the company is in public relations or advertising, publicly disclose its revenue by client industry through a Client Disclosure Report

• Use multiple categories to determine the “most material” clients or projects, including the importance of potential negative impacts.

For resources on identifying and mitigating potential negative environmental impacts of clients of creative agencies specifically, explore Clean Creatives insights and resources and consider taking their pledge once you have adhered to the ESC 2.6 requirements. Also, reference Race to Zero’s Interpretation Guide for creative agencies on client disclosure.