How are labor and human rights and environmental issues evaluated as part of the certification?
Labor and human rights are among a number of social and environmental issues B Lab takes into consideration within the certification process. We’ll outline the five main ways in which we assess these issues as a part of a company’s certification:
Controversial Issues statements.
B Lab continuously works with our Standards Advisory Council to evaluate the potentially negative impacts of different industries and practices. In order to be eligible to certify, companies must meet the requirements of our Controversial Issues statements. There is a natural tension between the inclination to exclude companies in controversial industries and the need for leadership with the potential to transform culture, behavior, and impact of these industries. In some cases, such as the bottled water industry, we have determined that there was greater opportunity to create real change by working with the industry, and so have required companies to undergo additional requirements and increased scrutiny. In other cases, we have determined that an industry as a whole is ineligible from certifying.
B Impact Assessment.
Companies must achieve a minimum verified score of 80 points on the B Impact Assessment, a holistic assessment of a company’s social and environmental performance across all of its stakeholders. All B Corps must provide documentation supporting their responses, which is then verified by our analysts. The assessment awards points for specific, positive practices, but does not mandate any practices. For example, while the B Impact Assessment acknowledges implementing policies and programs to improve the social and environmental impact of suppliers as a best practice, it is not a required component of certification if the company is meeting the overall score of 80 points.
Alongside a positive score, we assess negative impact through a Disclosure Questionnaire. This involves answering a series of confidential “Yes” or “No” questions about specific sensitive issues (e.g. historical fines, sanctions, material litigation, or sensitive industry practices) which will then be verified by B Lab. If issues selected in the affirmative are considered material, the company will at a minimum have to publish their Disclosure Questionnaire, which would include details such as a summary of the issues, the size or scope of the issues (e.g. financial implications, and number of individuals affected), impact on stakeholders, and any implemented management practices, on their B Corp public profile. In some instances, B Lab might determine that the issues are material enough and/or the company’s handling of the situation insufficient, and they will need to complete remediation practices before they’re able to certify. Further, B Lab may refer the company to our Standards Advisory Council to determine eligibility for certification.
Multinational parent companies with $5B+ in revenue.
B Lab’s additional requirements for multinational parent companies generating $5B+ in annual revenue recognize that the overall scale and influence of these companies requires societal obligations that go beyond overall performance on the B Impact Assessment or the risk screen, requiring that specific minimum positive practices also be in place — including a human rights policy. For more information, refer to the Guidance on Baseline Requirements for Multinational Companies over US$5billion.
After a company achieves certification, our robust Complaints Process is an essential tool for B Lab and all stakeholders to ensure that a B Corp is adhering to the practices they outlined when they certified. B Lab encourages anyone with credible knowledge of a B Corp’s alleged misconduct or misrepresentation to file a complaint.