How is the Equity Mechanism applied when a company has operations in multiple countries?

In order to operationalize the Equity Mechanism, we have to simplify its application to contexts where one company’s scope covers multiple countries or territories. Effective January 1, 2027, the Equity Mechanism applies based on the of the company’s central function. 

While B Lab intended to have the Equity Mechanism apply at the country level for companies with operations in multiple countries or territories, this has proven operationally unfeasible and therefore needed to change.

Examples:

• A company based in Kenya that only has site(s) within that country is eligible for the Equity Mechanism.

• A company with its central function in Brazil is eligible for the Equity Mechanism, even if it has sites in Canada and Germany.

• A company with its central function Germany is not eligible for the Equity Mechanism, even if it has sites in Brazil and Kenya.

In all cases, the company’s sole location or location of their central function as stated in their certification scope is what determines the eligibility and the number of sub-requirements they can opt out of. See the list of countries and their classifications in the article about how B Lab Standards are tailored to each country's context.