B Lab’s standards have offered a flexible approach to achieving B Corp certification; but that flexibility has been criticized as not holding bigger companies accountable for driving systemic change. We sat down with B Lab to learn more about its evolving standards.
Since its launch in 2006, B Corp certification has been heralded as a beacon of better business. But the B Corp community has experienced recent growing pains as multinational companies have begun to join the party. A forthcoming evolution of B Corp certification standards aims to address all stakeholder concerns and reflect the rigor needed to ensure businesses of all sizes are walking their talk on material environmental and social issues.
As Judy Rodrigues, Director of Standards at B Corp certifier B Lab Global, recently told Sustainable Brands®, the evolution of its certification standards is baked into B Lab’s DNA. The standards have been updated six times since the certification launched — with each iteration informed by research and stakeholder input. In December 2020, B Lab announced its standards were once again undergoing a review to ensure that B Corp certification continues to differentiate leading companies using business as a force for good.
B Corp certification: One size doesn’t fit all
Once thought of as a certification sought, earned and maintained by smaller organizations that were formed around a specific, better-business mission, the B Corp seal came under increased scrutiny as ever-larger companies — including Danone (whose subsidiaries began earning B Corp certification in 2015; to date, 74.2 percent of Danone’s global operations are now certified and the entire company aims to be so by 2025) and Nespresso, which earned certification in 2022 — joined the B Corp community, with B Lab accused of lowering its standards in an attempt to open the B Corp fold to large companies. B Lab Global’s Lead Executive Eleanor Allen spoke to this in a 2022 open letter to the B Corp community:
“We have not lowered our standards in order for large companies to certify, and we don’t have any intention to do so. 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 in the B Impact Assessment and meet higher requirements for verification, transparency, and additional factors in order to certify.”
B Lab standards, Allen added, are not the benchmark of business perfection — but a roadmap for a journey of continuous improvement:
“When we engage with and certify any company, regardless of size, we’re not designating them as flawless or absolving them of wrongdoing. We’re recognizing the high standards that they’ve already met while welcoming them into a movement that works collectively to improve practices and influence change — with an ultimate goal of making the economy work for all people, communities, and the planet.”
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When asked for feedback, stakeholders had plenty to say about this, too.
“The feedback from stakeholders centered on B Lab continuing to ensure that standard requirements are proportional to the level of responsibility and potential impact by multinational corporations (MNCs),” Rodrigues said. “Prevalent feedback regarding additional, tailored requirements for MNCs stresses the importance of increased ambition and a more rigorous assessment of compliance with the standards.”
Today, multinationals making over $5 billion annually (such as Nespresso) are subject to increased risk screening and baseline requirements, which will be included in the new standards.
Ever-evolving the standards
Last month, B Lab released a Summary Report from its 2022 Preliminary Consultation — which showed that the vast majority of 1,000 surveyed businesses (including both B Corp and non-B Corp respondents) believe the new standards enable practitioners to better address key social and environmental issues. The majority of respondents believed:
The new draft standards provide a high bar for social and environmental performance and will be helpful in further scaling meaningful progress in these issues.
The new draft standards are attainable.
The new draft standards help clear up confusion surrounding B Corp certification.
B Lab’s current standards offer a flexible approach to achieving certification. Companies can achieve scores in a range of ecological, social, and governance areas — with a comfy amount of wiggle room on the journey toward the score of 80 or higher required on the B Impact Assessment to achieve or maintain certification. However, the mix-and-match model of the current standard has been criticized for not holding companies accountable for driving systemic change. But B Lab says the new standard will include a fixed scoring framework that requires companies to achieve high scores across a range of common KPIs.
The new B Corp certification standards will be better aligned with other global standards, methodologies, frameworks, tools and regulations to streamline data and reporting. It will also tweak how businesses score points on the B Impact Assessment, with new additions such as deeper stakeholder consideration and governance practices.
“As the urgency to bring about systemic change increases, we must evolve the standards for B Corp certification to align with that urgency,” Rodrigues said. “We need increased urgency to bring about systemic change and the new standards will support further B Corp action and impacts toward tackling the climate and environmental emergencies, contribute to social justice through reducing inequalities and upholding human rights, as well as supporting an inclusive and regenerative economy.”
As Rodrigues recently told edie, this also means ensuring certification is attainable and accessible to all companies looking to make the world a better place, from multinationals to small businesses in the Global South.
For companies that may face barriers to certification — small startups, companies in developing regions, etc — B Lab is exploring various approaches to help make achieving certification more attainable. Some of these options include a menu of action items, additional requirements tailored to local contexts, and more time for disadvantaged groups to comply.
The new standards will require B Corps to meet more specific performance requirements and demonstrate continuous improvement across key social and environmental standards. Though, Rodrigues pointed out, these requirements will be tailored to each company’s context — such as size, sector and geography.
“These ideas are being further developed in the current iteration of the draft standards and the upcoming consultation,” she explained to SB.
By 2030, Rodrigues says B Lab Global plans to cement B Corp certification standards as the global reference for responsible business — with best-in-class criteria covering environmental and social metrics, accountability and transparency. She described B Lab’s Vision 2030 as “An inclusive movement to transform the economic system catalyzed by the B Global Network; and a credible community of businesses that meet these standards and use their influence and power as advocates and implementers of a more equitable, regenerative economy.”
Informed by feedback from its latest summary report, B Lab will convene a second public consultation later this year and plans to commence testing the new standard in 2024. Behind the scenes, Rodrigues said, B Lab is optimizing its digital experience to better communicate standards rollout and transition timelines.