Frequently Asked Questions about
B Corporation Performance Requirements 2020 / 2021 Review
What is this review, and what is its purpose?
Building off of B Lab’s Climate Emergency Declaration, which included a commitment to explore the future of the B Corp Certification standards, along with the ever evolving state of the world, and the ongoing successes, challenges, and feedback relating to the B Corp standards over the years, now is the moment to ask some relatively big questions about how the B Corp Certification requirements meet the needs of the moment and optimize the impact of the B Corp movement for the future.
Specifically, the question this review aims to answer is whether the idea of leadership in the movement of using business as a force for good has shifted or needs to shift based on the current world we live in, and therefore, whether the requirements to be a B Corp also need to shift. Can a company really be a leader in the movement to use business as a force for good, for instance, if they are not taking meaningful action on climate? If they are not addressing issues of justice, equity, diversity, and inclusion for the particular context where they operate? As responsible stewards of this movement, it is necessary that we ask these difficult questions and listen to stakeholders.
With that, B Lab is planning on embarking on a formal standards development process over the course of the next year or so to explore these questions, to determine if the certification requirements need to evolve, and if so, how. Specifically, building off of the structures of other certifications, the Baseline Requirements developed by our Multinational Public Markets Advisory Council, and the work of the B Corp Climate Taskforce, we will be exploring the possibility of developing specific, meaningful, minimum requirements to become a B Corp.
The purpose of this process is to explore, and not assume, a particular outcome from the outset, particularly during the initial call for input in December 2020 and February 2021. Our goal is, each step of the way, to ensure that we are meaningfully listening to stakeholders and incorporating their views, while simultaneously thinking about what is the best and most impactful path forward for the movement and our collective goal of achieving an inclusive, equitable, and regenerative economy.
What are the current performance requirements for B Corp Certification?
There are three B Corp Certification Performance Requirements: (1) Positive Performance: Demonstrated by a verified score of 80 or higher on the B Impact Assessment (BIA), (2) Risk Performance: Not having any material issues related to negative impacts that would prohibit the company from certification, and (3) Baseline Performance: For $5B+ Parent companies only, having specific practices in place regarding transparency and management of material issues.
Because Risk and Baseline Requirements Performance only get applied in limited circumstances, the primary focus of the Performance Requirements has been on positive performance. This approach, rooted in the score of the BIA, means that the Performance Requirement takes a “menu approach” in which no specific practices from the BIA are individually required as long as a company is doing enough of them (out of hundreds of options within the questions of the BIA), to achieve 80 points.
Note that there are also other certification requirements in addition to the Performance Requirement, including the legal requirement to amend a company’s corporate governance to require the consideration of stakeholders, and the transparency requirement of having a public profile page.
Why is this review being undertaken?
The existing approach of the Performance Requirement has been a tremendous success, but also has its limitations and challenges. They include:
Difficulty in articulating what it means to be a B Corp in a meaningful, impactful, and consistent way;
Not being customized enough to a particular company’s context, be it region, size, country, or industry;
Challenges regarding changes to our score-based standards and how that affects a company’s ongoing certification;
The lack of continuous improvement demonstrated by a company as a requirement of the certification;
The risk and challenge of having the certification rooted in a company engaging in and demonstrating various practices, even if they might not be the most impactful practices.
Addressing any of these points within the current structure of the performance requirement will be challenging, and potentially impossible. And beyond these challenges, it is also recognized that the world is now a very different place than when B Lab and the initial requirements for the certification were developed. There is growing consensus, and awareness, of the climate emergency. There is a global health pandemic threatening our health and well-being. People are taking to the streets to more clearly identify ongoing racial injustice and demand action to address it. And combined with all of these issues, there has been no greater moment of awareness and recognition not only of collective work of the B Corp movement, but the importance of the goals we seek - to reset our economic system to be more inclusive, equitable, and regenerative. As responsible stewards of this movement, it is necessary that we ask these difficult questions and listen to our stakeholders as we look to the future.
How is this different from B Lab’s previous standards development projects?
This project is not focused on incremental changes regarding how the BIA can be improved, but asking how the structure of the Performance Requirement on the whole can be improved.
Since the start of the B Corp movement, the ongoing evolution of our standards has been a core component of how B Lab continues to improve and optimizes impact. In addition to innovating new products like the SDG Action Manager, the B Impact Assessment itself has been iterated upon six times, and has included changes such as the creation of new tracks of the assessment for Emerging and Developed-Global Markets, industry specific addenda, evolving structures and scoring, and other significant content changes. At the same time, B Lab has expanded and evolved it’s development processes (including the launch of Regional Standards Advisory Groups), and began developing specific requirements and position statements on particular controversial industries and topics. All of these changes represent significant improvements to the B Corp standards, but they have also introduced complexity to them, and been met with ongoing feedback about how we can, and need, to continue to improve. Despite these changes, the core aspects of the BIA and how it determines certification performance requirements have remained largely the same, as described above.
What are the potential benefits of this review and possible change?
Potential benefits include:
Optimized impact, by ensuring that B Corps are focused on, and acting meaningfully on, the most pressing issues that our world is facing, and helping inspire more businesses to do the same.
Improved clarity of the requirements, which can allow prospective companies to have a clearer and quicker understanding of whether they are meeting the requirements and/or what it will require for them to achieve it; more efficient and value-added verification processes, and a clearer public narrative about what it means to be a B Corp and how B Corps are having a positive impact aligned with stakeholders’ values.
Responsiveness, including a demonstration that we listen intently to our stakeholders and consider their inputs seriously, and the potential to create standards that our expanded group of stakeholders can feel more ownership of and bought in to because of their opportunity to more actively contribute to their development.
At the same time, it will also be necessary to manage possible risks by ensuring a thorough and thoughtful development process, to ensure that stakeholder voices are heard and incorporated. This will include ample research, opportunities for input, testing, and public comment.
Is the purpose of this possible change to make the standards more difficult? Easier?
No. The purpose of this process is not necessarily to make the certification more or less challenging, but potentially more focused, meaningful, and impactful. Any change, however, will mean that there would be implications on what companies would need to do to be eligible for the certification in the future. This change will be thoughtfully managed and implemented to avoid disruption, especially for the existing B Corp community.
How would this affect the existing B Corp community?
In the case of any potential changes to the structure of the performance requirements, legacy policies and procedures will be developed to avoid disruption to the community. Standards changes are never designed in such a way to automatically remove existing B Corps from the community, and this process will be no different. There will be, at minimum, reasonable timelines for B Corps to transition to the new requirements, aligned with the nature of the requirements themselves.
What are the implications of this possible change on the BIA?
The BIA as a comprehensive management tool remains incredibly powerful, and should still play a central role in the certification requirements themselves as well as in enabling businesses to manage their social and environmental performance comprehensively. Importantly, the BIA is used in many ways beyond as a tool for certification, with under 4,000 Certified B Corps but over 100,000 users of the tool to manage performance. A change in performance requirements could present the opportunity to clarify the role of the BIA and thus optimize its impact and meaningful usage as well.
What are the implications of a possible change on verification?
Verification is an important part of the B Corp Certification process, although any possible change of the standard will require changes to what is verified. Such changes could create the opportunity for more focused verification, and as a result, both have the potential to be more efficient and/or create more of a value-add to companies from the verification process itself.
Who decides what the B Corp Certification Performance Requirements should be?
The performance requirement for B Corp Certification is overseen by an independent Standards Advisory Council, which is empowered by B Lab’s independent Board of Directors. To inform their decision, there will be substantial opportunities for engagement, feedback, and input from stakeholders throughout the process.
How can I participate and provide feedback, and when?
Over the course of this process, there will be regular updates and announcements, including opportunities to provide input. In the initial phase of the project, from December 1, 2020 to February 15, 2021 all stakeholders are encouraged to complete this survey to provide their initial inputs that will be used to inform next steps. In the survey, participants can also signal whether they are interested in participating more actively in additional stages of the process, including joining a local Regional Standards Advisory Group where available to provide ongoing and regular input and feedback to B Lab and the Standards Advisory Council.
In addition to these initial inputs, additional calls for participation will occur over the course of 2021. This will include a testing process and at minimum one 60 day public comment period before any possible changes are finalized and approved. Participating as a tester may involve a time commitment of at least 6 hours. A more detailed work plan and timeline will be shared following early next year, pending the results of the initial survey and feedback period. For questions or comments, please contact email@example.com.
What are Regional Standards Advisory Groups?
Regional Standards Advisory Groups are multi-stakeholder, market specific advisory bodies that provide feedback and inputs into B Lab’s standards development processes to ensure local expertise and context is embedded in the standards. These groups are not decision-making bodies, unlike the Standards Advisory Council, but instead provide ongoing input, advice, and feedback.
There are currently Regional Standards Advisory Groups in the UK, Latin America, Australasia, and East Africa, and two new groups are being launched in Europe and East Asia. For all existing and new groups, we are calling for new members as we embark on this review. You can submit your interest via the linked survey.
Qualified candidates should have expertise on specific topics related to our standards or have broad exposure or experience using our standards. They can be B Corp leaders or other business leaders, as well as academics, representatives from civil society organizations, etc. B Lab values and prioritizes diversity in its inputs and individuals who can bring a diversity of expertise and life experience to these groups are especially encouraged to apply. Participating in the Regional Standards Advisory Group may involve a time commitment of at least 8 hours.