What we're talking about
B Corp certification is a rigorous process that companies go through to measure and improve their environmental and social performance. As part of the B Impact Assessment (BIA), companies need to answer roughly 200 different questions, which are tailored to the size of the business, its industry and its location. Questions are split into sections on governance, workers, community, the environment and customers. While B Corp is primarily based on assessing a business' positive impact, companies must also confidentially disclose any sensitive practices, fines and sanctions through a disclosure questionnaire.
Why it's important
In a time when accusations of greenwashing are common, a certification that encourages your business to maintain the best environmental and social practices can cut through the noise. This is something that customers care about. In fact, a global study found that customers are between four and six times more likely to buy (and champion) purpose-driven businesses. If you're a small business that hasn't had much time to define each aspect of your business and what it stands for, going through the certification process will help.
Although most companies say they're socially responsible, becoming a B Corp takes things one step further. Throughout the certification process, aspiring B Corps open up their business to be vetted by an independent third party. Anyone can then view certified companies on the B Corp directory. Many customers – and businesses – see B Corp as one of the most recognizable standards of what a ‘good’ business should be.
Things to note
It's no small feat. The B Corp certification process is time-intensive and has five different stages. The total review process from submission to certification takes about a year, but it can vary depending on the complexity of the review. So, it might be worth hiring someone whose specific role (at least a few days a week) is devoted to completing the BIA. This way, they'll be able to understand exactly what's required and can give feedback to the business founder about what the next steps should be.
There's no such thing as too early. If you're just starting out as a business, many of the questions in the BIA will be about topics that you probably won't have got to yet – for example, what your carbon footprint is, how much water your company consumes per year or what employee wellbeing policies you've put in place. Many early-stage companies view the certification process as a form of education because it provides them with a structure for what a good business should be.
It'll help inform your decision-making process. Because you need to recertify every three years, you don't have time to rest on your laurels. Once you've been through the application process though, you'll probably be thinking like a B Corp when making decisions. That means if you're looking for a new supplier, for example, you'll consider local options with strong environmental credentials because you know that'll help keep your impact assessment score high.
How to become a B Corp
1. Meet the basic requirements. You can certify as a B Corp if you're a for-profit business that's been running for at least 12 months. Don't worry if you haven't reached your first birthday yet – you can still start the application process. Get going by signing up for theBIA and then you're on the platform and ready to go.
2. Fill in the questionnaire. Now you can see all the questions within the five categories. Many questions are tick boxes or a single data-point entry (for example, what was your net profit last year?). Bear in mind that each question scores differently – even though a question might not appear to score any points, the answer provided could be used to calculate the score for another question later on.
3. Improve your score. To become a certified B Corp, you need to have an impact assessment score of more than 80. Your score is live, so you'll be able to see it change as you input your answers. Although you need only a score of 80 to become a B Corp, it's worth submitting your application with a score well over that, to ensure some wriggle room in case your score gets brought down during the review process.
4. Make it legally binding. Before being certified as a B Corp, you'll need to make a legal change – also known as a mission lock – whereby you amend your business' articles of association to reflect your commitment to benefiting other stakeholders beyond shareholders. This is so that the impact on society and the environment is included as a part of any decision-making.
5. Submit your application. When submitting your BIA, you'll need to pay a one-off fee to have it reviewed by B Lab. The cost of this is $150 in the US, £250 in the UK or €250 in Europe.
6. Provide supporting evidence. Once you've submitted answers for the 200 or so questions on the impact assessment, you'll be asked to provide supporting evidence for your highest scoring answers. You'll have no idea which questions B Corp will pick up on, so it pays to be thorough in your answers. This isn't designed to catch you out; for smaller businesses who might not be able to accurately record certain parameters like water usage or carbon capture, this is an opportunity to score more points on the areas of impact that your business excels in.
7. Have a meeting with the B Lab certification and verification team. At this stage, B Corp will likely arrange a virtual meeting with you to go into your application in more depth and to fill out any gaps in their knowledge. They might also help you to focus on a specific area of the application where your business excels, so that you can work on other areas of the business to improve your application score.
8. Maintain your score. Once your company has met all of the requirements – including paying your annual certification fee, which starts from $2,000 – you're a certified B Corp. Now you can share that information with your customers and attend B Corp events and working groups. However, to maintain your certification, you need to update and reverify your impact assessment scores every three years (or if your business changes hands). You're also required to publish an impact report every year to demonstrate how your business is progressing on its goals.
• The B Corp certification is for purpose-led businesses that want to improve their environmental and social credentials.
• The application process is no walk in the park so, if you're a small business, it might be worth calling in some help.
• If you prepare your application ahead of time, you can submit it the day that your business is one year old.
Perspective. Read this post from B Corp for a more detailed look at the review process – and this timeline for how long the application usually takes.
Example. The Guardian newspaper isn't a typical example of what a B Corp might look like, but it demonstrates that a business' impact can be measured in many different ways.
Tool. B Corp's knowledge hub will help you to answer each of the questions on the impact assessment.
A version of this article was published in the Courier Workshop newsletter. For more deep dives into essential business concepts, sign up here.