Learn about the basic concepts, benefits, and how to become a certified B Corporation. Since its inception in 2006, B Corp certification has become one of the most recognized certifications for sustainable business practices worldwide. It has become a powerful marketing tool that instantly differentiates products from non-organic products, similar to Fair Trade or USDA Organic certifications for certain food products.

What is a B Corporation?

A certified B Corporation, or B Corp, is a for-profit business. According to B Lab , this nonprofit organization measures the social and environmental impacts of other businesses against sustainability and transparency criteria and certifies them as a B Corp. A B Corp meets “the highest standards of proven social and environmental performance, public transparency, and legal accountability to balance profit and purpose.”

A company certified as a B Corp must do no harm, and their products, services, and business practices must benefit all stakeholders. B Lab defines stakeholders as employees, communities, customers, and the environment.

According to B Lab, there are five criteria that B Corps must meet when starting a business:

• Accountability : Directors must consider the impact on all stakeholders of the company.
• Transparency : Companies must publish and disclose public reports on their social and environmental performance.
• Performance : Companies must achieve a minimum score on the B Impact Assessment and recertify every three years.
• Accessibility : Any business can become a B Corp, regardless of its home country or state of incorporation.
• Cost : Companies pay a certification fee to B Lab, which varies based on sales.

B Lab categorizes certified B Corps into four categories:

• Startup
• Multinational and public corporations
• Companies with related organizations
• Internationally certified B Corp

B Corps voluntarily participate in B Lab’s evaluation program. As part of this evaluation, the B Corp certification process is rigorous.

What is B Corp Certification?

B Corp certification is awarded to companies that meet rigorous standards of social and environmental performance, accountability, and transparency. B Lab evaluates companies for their positive impact on their employees, communities, customers, and the environment.

The B Corp certification process is an in-depth assessment of governance, transparency, environmental stewardship, and more. A minimum score of 80 out of 200 is required, and B Lab’s commitments must be incorporated into the legal structure. These standards must be maintained after certification, and reassessed regularly.

Pros and Cons of B Corp

Are you wondering if becoming B Corp certified is a good idea for your business? Let’s take a look at the pros and cons.

• Enhanced Corporate Accountability and Transparency: B Corps consider the impact on all stakeholders, not just shareholders. The result is high levels of accountability, ethical practices, and transparency, which builds trust with customers.
• Differentiate yourself in the marketplace: Becoming B Corp certified demonstrates your commitment to social and environmental responsibility. This attracts loyal customers who share your values ​​and creates a competitive advantage.
• Attract and retain talent: Many employees, especially younger generations, are looking for employers with strong values. B Corps find it easier to recruit and retain people who are motivated by purpose.
• Access to Capital and Partnerships: Investors, funds, and partners prefer sustainable and responsible business practices. Becoming B Corp certified opens up opportunities for funding and partnerships that would otherwise be difficult to obtain.

disadvantage:

• Cost: Maintaining B Corp certification can cost between $1,000 and $50,000 per year.
• Compliance: Maintaining B Corp certification requires ongoing effort. This can involve regular monitoring, reporting, and changes to business practices, and can be resource intensive.
• Potential for greenwashing accusations: If B Corp certification is perceived primarily as a marketing tool, it may be subject to accusations of greenwashing. This can damage the company’s reputation and erode stakeholder trust.

Differences Between B Corps and Benefit Corporations

“B Corp” is often mistakenly thought of as an abbreviation for “benefit corporation.” In particular, benefit corporations are not associated with B Lab.

What is a Benefit Corporation?

A benefit corporation is a traditional form of business, such as a C corp legal entity, that focuses on creating public good and adding sustainable value by modifying its commitment to high operating standards, accountability, and transparency. Benefit corporations are committed to creating public good while pursuing profit.

Similarities and Differences

Benefit corporations and B Corps share similarities in prioritizing stakeholder interests globally and in their communities.

Directors of B Corps and benefit corporations are required to consider the impact on all stakeholders of the company, report on social and environmental performance, and measure it against third-party standards. However, there are differences in the certification bodies, availability, and cost.

• Availability: Benefit corporation status is available in 30 U.S. states and the District of Columbia. Oregon and Maryland offer the benefit LLC option. B Corp certification is available to all businesses regardless of location.

• Accountability, Transparency, and Performance: B Corps are certified by B Lab analysts and must recertify. State agencies enforce eligibility criteria for benefit corporations, but companies must self-report their performance, and government regulators do not evaluate the ongoing performance of benefit corporations.

• Recognition: B Corp status is a private certification provided by B Lab, an independent nonprofit organization, which provides objective third-party performance evaluations. Companies that achieve B Corp status are entitled to use the Certified B Corporation logo provided by B Lab on their marketing materials. Benefit corporations are government-recognized status, but governmental accountability ends after benefit corporation eligibility is determined.

• Cost: Benefit corporations have a filing fee of $70 to $200 with the state. B Lab certification costs range from $500 to $50,000, depending on the company’s revenue.

If you're interested in becoming B Corp certified, first consider whether your business meets or is close to meeting B Lab's standards.

If you already have sustainable practices in place that take into account your community, you can prepare for the B Corp Impact Assessment. This assessment is free. Even if you do not pursue certification, assessing your company’s sustainable practices can be useful in strengthening your environmental and social responsibility.

B Corp Case

DAME

DAME is a UK-based company that manufactures sustainable feminine hygiene products. The brand aims to reduce single-use plastics in their products by making reusable tampon applicators and organic cotton tampons.

Finisterre

Finisterre is a UK-based outdoor clothing brand designed for ocean lovers. With a focus on innovative materials, sustainability and ethical manufacturing practices, they create products for surfers and coastal explorers while minimizing their environmental impact.

Known Supply

Known Supply is a US-based clothing brand that emphasizes connection in the apparel industry. By providing responsibly sourced and manufactured clothing, we prioritize fair labor practices and seek to build connections between the people who make our consumers’ clothing.

How to Get B Corp Certified

The process for becoming B Corp certified can vary depending on a number of factors, including sector, industry, score, and ownership structure.

B Lab says this process typically takes six to eight months for small and mid-sized companies. It typically goes through the following steps:

1. Register

Register for the B Impact Assessment. There is no cost for this step.

2. Complete the pre-work

Find out the specific legal requirements for B Corp certification. B Lab offers an interactive tool on its website that helps you determine your legal requirements based on your location, business type, corporate status, and other factors.

If you are applying as a multinational company, complete a risk review provided by B Lab, a pre-screening process that examines the multinational company’s history, operating procedures, goals, and public image in more detail to assess B Corp eligibility.

Collect documents and data required for the B Impact Assessment.

3. Apply

Complete the B Impact Assessment online to receive your initial score. (Note: Completing the B Impact Assessment alone is not a final application.)

Questions may include how the company shares financial information, how its compensation structure compares to the market, how it manages supplier quality, whether it uses energy efficiency programs, etc. Responses are usually multiple choice and sometimes organized on a scale (e.g., very often, often, somewhat often, rarely, never, etc.).

Once you have completed most of the assessment, you will set up your company profile and begin the public questionnaire. At this point, your base score will be revealed. If your score is below 80, you may be asked to re-evaluate your company and improve in certain areas before being assessed again.

If you score 80 points or higher, you will submit the B Impact Assessment for review. At this point, you will pay a submission fee of $150.

4. Verify

B Lab will determine eligibility by having analysts review profiles and assessments. Follow-up questions may be asked of employees and suppliers.

You will be required to conduct a review call with the analyst, review the validation report prepared by the analyst, and provide documentation to support your responses to the assessment.

5. Get certified

Once the analyst verifies that you have passed the 80+ point mark, you will move on to the post-certification stage and sign the B Corp contract. After signing the contract, you will be officially certified as a B Corp. You will be required to pay an annual certification fee, which will vary depending on the size and revenue of your company.

Want to become a B Corporation certified? Apply today.

It’s clear that joining the B Corp movement can help your bottom line. Brands like Patagonia and Ben & Jerry’s are leveraging B Corp certification to promote their social missions, add shareholder value, and make a positive impact on the world.

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