Sub-requirements that need approval by the highest governing body

Modified on Mon, 24 Aug at 8:23 AM

Introduction
What we mean by highest governing body
List of sub-requirements and what companies need to do

Introduction

The B Lab Standards V2 ask that certain reports, policies, or documents be approved or reviewed by the highest governing body or executive team, with the intention of ensuring accountability at the highest levels of the organization. This not only embeds the standards at the core of your company’s governance, but also strengthens credibility by ensuring that the requirements are effectively implemented, monitored, and improved over time.

For efficient project management of your certification process, you may want to consolidate your requests for approval to your company’s highest governing body. In this article, you will find a list of all sub-requirements that have an element that must be reviewed, overseen, or approved by the highest governing body or the executive team.

What we mean by highest governing body

Highest governing body: The person or group of people who have ultimate accountability for the whole company. Every organizational entity has one highest governing body, even if it is not explicitly established. A highest governing body can be explicitly established in a number of formats, such as: a board of directors, a supervisory board, a sole director, joint and several directors or trustees. For larger companies, a board subcommittee may be considered the highest governing body — as long as the full board is regularly updated on progress and performance. (Adapted from Governance of organizations — Guidance, ISO Standard)
Executive team: People with delegated authority from the highest governing body to implement strategies and policies that fulfill the company's purpose. (Adapted from PAS 808 — Purpose-driven organizations, British Standards Institution)

List of sub-requirements and what companies need to do

The following table lists the relevant sub-requirements, the actions you must take, the compliance criteria relating to the highest governance body, and the certification year in which your company must meet this sub-requirement.

Note that not all the sub-requirements listed here apply to all companies; the sub-requirements that apply to you are determined by your company’s size and sector.

Sub-requirement	Action you must take	Compliance Criteria	Year
FR 1.4 & FR 1.5	Sign the B Lab Agreement.	A representative appointed by the company's highest governing body signs an Agreement committing to the B Corp Certification process.	Year 0
FR 2.1	Sign the B Lab Agreement.	A representative appointed by the company's highest governing body signs the Agreement committing to adopt the B Corp legal requirement where/when law permits.	Year 0
PSG 1.1	Establish a public purpose statement.	The purpose statement is approved by the highest governing body.	Year 0
PSG 2.2	Approve the stakeholder governance policy	The policy is approved by the company's highest governing body.	Year 0
PSG 2.3	Oversee the materiality assessment.	The highest governing body has oversight of the materiality assessment process and reviews the results.	Year 0
PSG 2.4	Identify material issues not covered by the standards, set targets, and report on progress.	The targets are approved by the highest governing body.	Year 0
PSG 4.2	Approve and oversee the responsible marketing and PR policy.	The responsible marketing and public relations policy is approved by the executive team or highest governing body. The company assigns accountability at the level of the executive team or highest governing body for ensuring all marketing and public relations practices comply with the responsible marketing and public relations policy.	Year 0
PSG 5.1	Annually review the stakeholder governance implementation.	The company reviews all three at least annually: Progress on advancing the public purpose Social & environmental performance Stakeholder governance implementation	Year 0
PSG 5.2	Assign responsibility for overseeing the purpose and stakeholder engagement.	The highest governing body’s written terms of reference explicitly specify that the highest governing body is responsible for overseeing the company's: Public purpose as defined under PSG1.1 Social and environmental impact Consideration of its impact on stakeholders.	Year 0
PSG 6.1 & 6.2	Approve and publish the annual impact report.	The company’s social and environmental impact report is approved by the highest governing body.	Year 3
JEDI 2.a	Approve the public commitment to JEDI principles.	The company develops a JEDI commitment statement that is approved by the executive team or highest governing body.	N/A
FW 4.2	Approve the action plan to improve its workplace culture.	The plan is approved by the executive team or highest governing body.	Year 3
HR 1.2	Approve and publish the human rights policy.	The human rights policy is approved by the highest governing body.	Year 0
HR 2.3	Annually approve the strategy on human rights issues.	The strategy is approved by the highest governing body.	Year 3
HR 4.11	Approve a plan to address fair wages in the supply chain.	The plan is approved by the company’s executive team or highest governing body.	Year 3
CA 2.1	Approve and publish a climate action plan.	The company’s action plan is approved by the highest governing body.	Year 0
CA 2.3	Approve a climate transition plan.	The company’s climate transition plan is approved by the highest governing body.	Year 3
ESC 1.7	Approve the written explanation that the issues are immaterial if applicable.	If water, biodiversity, and waste were not deemed material, the company records a written explanation why, approved by the highest governing body or executive team.	Year 0
ESC 2.1	Approve a strategy to address actual and potential negative environmental impacts.	The strategy is approved by the highest governing body or executive team.	Year 3
ESC 2.2	Annually approve the biodiversity transition plan.	The plan is approved by the highest governing body or executive team.	Year 3
ESC 2.3	Annually approve the water stewardship strategy.	The strategy is approved by the highest governing body or executive team.	Year 3
GACA 1.1	Approve the lobbying policy.	The company’s lobbying policy is approved by the highest governing body.	Year 0
GACA 1.2 & 1.3	Oversee the annual public report on lobbying positions and political contributions.	The public report is overseen by the highest governing body or a committee of the highest governing body.	Year 0 (GACA 1.2) Year 3 (GACA 1.3)
GACA 3.1	Approve the tax policy.	The company’s tax policy is approved by the highest governing body.	Year 0
GACA 3.2	Oversee the annual public report on country-by-country taxes.	The public report is overseen by the highest governing body or a committee of the highest governing body.	Year 3