Frequently Asked Questions - Evolving the Standards for B Corp Certification

Modified on Wed, 26 Jun at 5:04 AM

TABLE OF CONTENTS

About

What is this evolution, and what is its purpose?
What is the current model of the standards for B Corp Certification?
In the future, what the new model of the standards for B Corp Certification look like?
How can I participate and provide feedback, and when?
What is driving this evolution?
How is this different from B Lab’s previous standards development projects?
What are the potential benefits of this evolution?

Impacts on the existing B Corp community

Is the purpose of this evolution to make the standards more difficult? Easier?
How would this affect the existing B Corp community?
How will this affect companies that are not B Corps yet but are in queue for certification?
If there are going to be requirements on the same Impact Topics for all companies, then will all companies need to meet the exact same requirements? How will a company’s key characteristics like size, sector, etc. be featured in this?
What will happen to all the efforts that my company has invested in the past for the certification?
What are the implications of this evolution on verification?
When will B Lab publish the new standards?
What is the timeline for companies to certify or recertify on the new standards?
If I recertify on the current version of the standards (V6) in 2024/2025, will I be expected to recertify on the new standards as soon as they are ready for certification?
What if I want to recertify on the new standards sooner than my recertification submission date?
Is B Lab evolving the standards due to large, multinational organisations joining the community?

Going into detail

How do the new standards address the idea of continuous improvement?
Will there be scoring within the new standards?
How do the latest draft standards affect businesses with clients in controversial industries?
How do the new draft standards take into account the role of Impact Business Models (IBMs)?
How do the new standards relate to the existing topics of the B Impact Assessment? How will these relations be reflected?
Standards development at B Lab
How does B Lab develop standards?
What has been the process followed for developing the draft standards and what lies ahead?

About

Why is B Lab evolving its standards for B Corp Certification?

B Lab’s social and environmental business standards define how businesses can be a force for

good. Based on stakeholder input, research, and established best practices, these standards are the basis for B Corp Certification requirements and B Lab’s impact management tools, and they inform the network’s programs and collective action initiatives. Overseen by B Lab’s independent Standards Advisory Council, the standards help companies improve, measure, and manage their impact on people and the planet. As the B Corp movement grows and the world around us changes, we must work to advance the standards, meaningfully demonstrating the leadership role that B Corps and the B Corp movement play in the world.

With this in mind, in December 2020, B Lab announced a review of the performance requirements — or standards — for B Corp Certification. The aim was to understand whether more specific and mandatory performance requirements on key topics could ensure that B Corp Certification continues to differentiate leading companies using business as a force for good. This project has been built on other developments, such as B Lab’s Climate Emergency Declaration, which included a commitment to explore the future of the B Corp Certification standards and the Baseline Requirements developed by our Multinational Public Markets Advisory Council. These new standards will evolve what it means to be a B Corp, making certification more relevant than ever before, galvanizing business action on the most important social and environmental issues.

Throughout this process, our goal is to ensure we meaningfully listen to stakeholders and incorporate their views while simultaneously considering the best and most impactful path forward for the movement and our collective goal of achieving an inclusive, equitable, and regenerative economy.

What is the current model of the standards for B Corp Certification?

There are currently 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.

How are B Lab’s standards for B Corp Certification changing?

The draft standards for B Corp Certification have been developed to improve the impactfulness of the standards, improve clarity around what it means to be a leading business, and demonstrate responsiveness to what we’ve heard from various stakeholders over the past few years.

In order to achieve these goals, the draft standards depart from the current model of standards for B Corp Certification; while the content and components of the new draft standards have been developed with the existing standards in mind, they have also been updated to improve their clarity and focus, while ensuring that specific topics reflect expected performance for companies across different Impact Areas. Within these draft standards, companies will be expected to meet specific applicable requirements for each of the Impact Topics, ensuring positive impact across a range of activities and concerns. These requirements will be contextualized based on key characteristics of companies such as size and sector.

Below is an overview of the Impact Topics and overarching expectations of B Corps for each of them, as stated in the draft standards:

Purpose & Stakeholder Governance: B Corps act in accordance with a defined purpose contributing to the creation of an inclusive, equitable, and regenerative economic system for all people and the planet.
Workplace Culture: B Corps workers feel engaged. There is two-way communication and workers’ views are respected.
Fair Wages: B Corps workers can afford a decent standard of living for themselves and their families, and there is wage equality among the workforce.
Justice Equity Diversity & Inclusion: B Corps have inclusive and diverse work environments and contribute meaningfully to just and equitable communities.
Human Rights: B Corps treat people with dignity and respect their human rights.
Climate Action: B Corps take action in accordance with science to combat climate change and its impacts.
Environmental Stewardship & Circularity: B Corps demonstrate environmental stewardship and contribute to the circular economy in their operations and value chain, minimizing any negative impact and pursuing positive impact.
Government Affairs & Collective Action: B Corps play a leadership role in fostering shared understanding, solutions, and implementation towards an equitable, inclusive, and regenerative economy.
Complementary Topics: B Corps comprehensively identify and measure a wider set of impacts of their business, in addition to the core Impact Topics, and improve upon them over time.

You can read the latest draft standards here.

How can I participate and provide feedback, and when?

We shared the latest draft of the standards in a second public consultation from 16 January 2024 through 26 March 2024 to receive stakeholder feedback. We created a new, interactive website to allow stakeholders to navigate the content of the draft standards and share feedback with ease. This draft is comprehensive, incorporating feedback from the first consultation, including a need to contextualize the standards to individual companies according to their size and sector, as well as providing clearer compliance criteria and implementation guidance.

The Standards Management team is processing a huge volume of feedback (from 1000+ respondents) and incorporating prevalent feedback into the next draft content of the standards. We commit to publicly sharing key consultation findings by September 2024.

What is driving this evolution?

The existing Performance Requirements for B Corp Certification have seen tremendous success in the past 17 years, but they have limitations and challenges, including:

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 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 updates?

This project is not focused on incremental changes to improve the BIA but on improving the structure of the Performance Requirement as a whole.

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 optimize 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 its 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. Still, they have also introduced complexity and have been met with ongoing feedback about how we can and need to continue to improve. Despite these changes, up until now, 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 evolution?

These new standards will answer the question: what does responsible, sustainable business look like now and in the future? Collectively, they are intended to:

Improve the impact of the B Corp community, and all those who strive to adopt the B Corp standards by focusing them on core practices addressing the most pressing social and environmental issues;
Improve the clarity of the standards by making it easier for stakeholders to understand what it means to be a B Corp (and for prospective companies to more easily understand and assess what it will take for them to achieve the Certification);
To ensure that these issues are responsive to the needs and expectations of stakeholders, including the B Corp community.

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 continue to include ample research, opportunities for input, testing, and public comment.

Impacts on the existing B Corp community

Is the purpose of this evolution 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 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?

Whenever there are changes to the standards for B Corp Certification, legacy policies and procedures are 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. B Lab wants to ensure our community has time and resources to meet the new standards, so they will be rolled out gradually in a phased manner. We will communicate rollout and transition timelines in advance, so companies don't have to worry about trying to comply with the new standards at once.

How will this affect companies aspiring to become B Corp certified?

Companies in the queue for certification should continue to focus on complying with the current standards. After approval, the new standard will be rolled out in a phased manner over a period of time to ensure our community has time and resources to meet the new standards.

If you want to engage in the development of the new standards and start familiarizing yourself with the direction, B Lab recommends reading their public drafts. That will familiarize you with the direction we are headed.

If there are going to be requirements on the same Impact Topics for all companies, then will all companies need to meet the exact same requirements? How will a company’s key characteristics like size, sector, etc. be featured in this?

Aligned with the objectives of increased impact, clarity and responsiveness of the standards, one of the key aspirations of the evolution of the standards is to have a meaningful degree and quality of contextualization of the standards for B Corp Certification. When contextualizing the standards, there is always a need to balance flexibility with prescriptiveness - as giving companies complete flexibility could help in factoring their unique context more easily, but the lack of prescriptiveness could affect the universality and comparability of our standards and the ability to verify it.

In the draft version of the standards, while the universality of spirit and vision has been maintained within each topic, there is also a demonstration of contextualization and how this might look for different companies, for example, contextualized requirements according to company size and sector, having optionality in terms of ways to meet some requirements, etc. To learn more about how contextualisation shows up within the new standards, please check the Appendix of the draft standards.

What will happen to all the efforts that my company has invested in the past for the certification?

Efforts invested towards having a positive impact on the world and being a leading company are never a waste. The intent of the new performance requirements is not to invalidate your previous efforts, rather to focus future efforts on a set of comprehensive issues ensuring that certification is relevant for the challenges of today and tomorrow and giving organizations clarity to focus on what matters most.

The information that you have shared through your previous certification cycles will remain in the database and will be accessible to you. That said, currently Certified B Corps are likely to be at different stages of achievement within the new structure of the performance requirements. Therefore, some of the efforts that you have taken in the past will align very well with some of the ten topics of the new performance requirements resulting in minimal efforts from your side. However, topics that have not been a priority area for your company will likely require additional effort and investment.

When will B Lab publish the new standards?

Prior to the BIA being updated, the finalized standards will be published in the microsite at s tandards.bcorporation.net.

The Standards Management team is processing a huge volume of feedback from the second consultation, and we commit to publicly sharing key consultation findings by the end of September 2024.

Our next focus is to update the draft of the standards to share with our governing bodies for refinement and approval. If approved, we will begin to translate and prepare the standards into an external-facing format that can be accessed publicly. Our ambition is to have final approval on the content of the standard by the end of 2024 and publish in full soon afterwards. (This timeline is dependent on the level of changes required in response to stakeholder feedback and receipt of governing body approval).

What is the timeline for companies to certify or recertify on the new standards?

Based on our current timeline of standards, product, and certification model development, B Corps with a submission date in 2025 will be requested to recertify on Version 6, the current version of the standards in the B Impact Assessment.

We continue to explore different avenues to support B Corps when onboarding to the new standards. A first cohort of B Corps will certify on the new standards at some point in 2026, in line with their existing recertification cycle. The specific expectations of B Corps undergoing recertification on the new standards are still being refined, and also require approval by our governing bodies. In 2025, we commit to sharing details informing B Corps of expected requirements for their transition to the new standards, and when. Below is an example of how standards compliance could be phased in, with some requirements in effect in a company’s initial certification cycle on the new standards, followed by continuous improvement in subsequent recertification cycles.

If I recertify on the current version of the standards (V6) in 2024/2025, will I be expected to recertify on the new standards as soon as they are ready for certification?

No, B Lab will continue to recertify companies based on a three year cycle, therefore you will not be expected to recertify on the new standards until your next recertification submission date.

What if I want to recertify on the new standards sooner than my recertification submission date?

There may be opportunities available for a small cohort of opt-in companies to start engaging with the new standards in 2025. Further information on these testing or 'early adopter' programs will be communicated after we have the opportunity to analyze the feedback from the second consultation.

What are the implications of this evolution on verification?

We are defining new models for our verification and certification processes, outlining how we verify company performance and issue certification on the new standards. Notably, we are looking into further collaborations with third-party certifiers to assess company performance and verify company compliance with the new standards to align with expectations of incoming EU Directives.

Is B Lab evolving the standards due to large, multinational organizations joining the community?

We are not changing our standards to accommodate large companies. B Lab’s standards are continually evolving to include more rigorous performance requirements, which are applied to all B Corps — regardless of size, geography, or industry. In fact, larger companies generally have to answer more (and more difficult) questions and meet higher requirements for verification, transparency, and additional factors in order to certify. The sub-requirements in the latest draft standards consider the impact of large and multinational enterprises to ensure that they comply with social, environmental and stakeholder governance practices reflecting their impact. The sub-requirements have been drafted in a way that their number and rigor increase as a company’s size increases.

Going into detail

How do the new standards address the idea of continuous improvement?

During the stakeholder engagement process stakeholders shared that they consider continuous improvement as a cornerstone of the B Corp Certification. In the draft version of the standards, continuous improvement is incorporated in the following ways and we will continue developing its details in further iterations:

Most requirements inherently require ongoing action and improvement, which will be verified at recertification (e.g. setting a net zero target and demonstrating progress annually, ongoing action for identifying and managing salient human rights issues). In such cases, the draft of the requirements, specifically outlines expectations for the requirements at a given time interval (e.g. at recertification).
Within the topic of Impact Management, companies set goals on other material topics (as you will see in the draft, either focused on the operational sections or on Impact Business Model sections), against which companies need to demonstrate progress to recertify

Will there be scoring within the new standards?

The draft of new standards departs from the existing model in which companies achieve B Corp Certification by attaining a minimum aggregate score of 80 points or more across all impact areas. The new requirements identify Impact Topics that are comprehensive of different stakeholder impacts (e.g., fair wages; climate action). With the new standards, the goal is to transition from a points-based certification requirement to a scheme where companies must meet the specific requirements within each topic.

At the same time, scoring incentivizes improvement, provides comparability, and clear roadmaps before, during, and after companies meet the standards. Therefore, new "scoring models" are being explored. The objective is to continue delivering the benefits of scoring and create a system that supports companies to also self-assess their journey toward achieving the requirements and improving their impact.

How do the latest draft standards affect businesses with clients in controversial industries?

The proposed draft standards introduce a new requirement for those in the service sector with a minor footprint. These companies would need to assess the potential negative environmental and Human Rights impacts of working with prospective clients and projects and take necessary mitigation actions on any potential or known material impacts.

For medium sized and larger companies operating in all the other sectors would need to do a saliency/materiality assessment and address and mitigate human rights and environmental issues in their entire value chain, which may include clients.

Also, the draft Foundation requirements under the latest draft standards outlines the industries where companies can be ineligible to certify if they are directly involved in or are serving clients in high risk industries or practices considered to be materially against the Theory of Change and mission of the B Lab movement.

It is important to note that risk assessments linked to B Lab risk standards are currently under review. We are using this moment of standards evolution to also optimize and improve our certification processes and are working to incorporate upfront evaluation and eligibility to understand risk from the outset, making it clear to companies early on in the process, under the Foundation Requirements, if they are eligible to pursue B Corp Certification. This review is also evaluating how best to incorporate the risk standards into the new standards - whether they be fully embedded into the Impact Topics or a separate list of industries and/or practices ineligible for B Corp Certification under the Foundation Requirements. Once completed, the relevant B Corp Certification requirements will be updated and shared with stakeholders.

How do the new draft standards take into account the role of Impact Business Models (IBMs)?

Impact Business Models (IBMs) featured in the B Impact Assessment are perceived as one of the key differentiators of B Corp Standards/Certification compared to other standards in the sustainability ecosystem. Stakeholder consultations confirmed the relevance of companies that proactively design their business models to positively impact the planet/society, beyond managing the impacts of their operations.

In the latest draft, companies with one or more IBMs will be acknowledged in the following ways:

Increased flexibility in approaching the performance requirements (i.e. exemptions or more time to meet them)
The option to demonstrate equivalency in compliance with requirements in some specific Impact Topics
Receive public recognition in the B Corp Public Profile and potentially other B Lab Programs

These changes reflect feedback from the preliminary consultation that the proposed new standards focused disproportionately on operational impacts, and overlooked one of the 'secret sauces' of B Corp Certification: IBMs and their potential. In this next round, you can expect more recognition and focus on IBMs.

How do the new standards relate to the existing topics of the B Impact Assessment? How will these relations be reflected?

The way the requirements within the Impact Topics interact with each other and with the content of the B Impact Assessment is important from a conceptual, strategic, and a user experience perspective especially as the B Impact Assessment already contains questions related to the ten specific topics such as Climate Action, Fair Wages, JEDI, etc.

To develop a solution for the interactions between the two, B Lab Global will consider the following principles:

Avoiding duplication of responses and efforts by companies;
Recognizing the interconnections between the specific requirements of the ten topics and the B Impact Assessment within the standards and in the technology platform.

There are different ways that these intersections could be managed. As drafts of the core requirements are further iterated upon, B Lab Global will coordinate with various relevant stakeholders, particularly those internal like Product and Technology & Certification and Verification to find the best possible solution.

Standards development at B Lab

How does B Lab develop standards?

B Lab recognizes that high-quality social and environmental business standards demand continuous improvement in order to meet principles of inclusion, independence, and credibility. Our processes and approach to developing our standards are designed with best practices for standards development in mind, including independent governance and ample opportunities for input and review.

These three governance bodies have played integral roles in the development of the new standards for B Corp Certification:

B Lab’s independent Standards Advisory Council (SAC) is an independent, multi-stakeholder group composed of members from around the world with specific expertise in responsible and sustainable business. The standards are governed by the SAC and the SAC oversees the overall performance requirements for B Corp Certification.
B Lab’s Regional Standards Advisory Groups (RSAGs) in Asia, Australasia, East Africa, Europe, Latin America, and the United Kingdom provide ongoing feedback on the standards. These groups provide continuous input on B Lab’s standards, specifically focusing on context, relevance, and best practices for different markets.
B Lab’s Board of Directors is responsible for appointing members to the SAC and also has ultimate decision-making authority on recommendations coming from the SAC with the ability to overturn decisions made by the SAC with a ⅔’s vote.

What has been the process followed for developing the draft standards and what lies ahead?

Since launching this initiative in December 2020, B Lab has followed an iterative approach to developing the new standards for B Corp Certification. In 2021, the development was focused on the overall framework of the standards that companies should have to meet in order to become Certified B Corps.

To determine this framework, input was gathered on topics including the following: Should there be specific requirements for B Corps? Should there be specific topics for these requirements, if so how many? What are the most pressing topics facing society today? These questions and more were asked of the global B Corp community, all B Lab staff and board members, B Lab’s SAC and RSAGs, focus groups, and the general public.

At the end of 2021, following a year of engagement through focus groups and surveys with more than 1,200 stakeholders from around the world, B Lab’s Standards Advisory Council agreed on a framework for the new standards for B Corp Certification based on a set of specific topics. (Learn more about this process here.)

In 2022, with a draft framework agreed on by the SAC, B Lab focused on engaging subject matter experts with expertise in specific social, environmental, and governance topics, and creating the draft of the standards themselves.

The first drafts of the new standards were presented for preliminary consultation and from September to November 2022, 1,051 stakeholders responded to the survey beyond more than 100 B Corps engaging in 48 hours of virtual focus groups.

In May 2023, a Summary Report was published, showing the findings and insights from 2022 preliminary consultation.

A second consultation launched on January 16 2024 through 26 March 2024 to seek feedback on the latest draft of the standards, including detailed compliance criteria and contextualizing the standards for different companies by size and sector. B Lab is analyzing the feedback and will incorporate any prevalent feedback into the final draft.