Update on the Future of the B Corp Certification Performance Requirements

The next stage will include development of performance requirements and testing with interested companies, before phased implementation starting in 2023.

Please find this press release in Spanish | Portuguese | Italian | French here.

 

  • Following multi-stakeholder feedback and guidance from the Standards Advisory Council, B Lab will develop new performance requirements for the B Corp Certification. These will include requirements on approximately ten specific topics spanning environmental, governance-related, and social impact, which companies would need to meet in addition to using the B Impact Assessment as an impact management tool.
  • The next phase of this project will focus on further development of the performance requirements until Q2 2022, followed by testing the proposed new requirements with interested companies in Q3 2022. If your company is interested in participating in this testing phase, please complete this testing participation and feedback form (available only in English) by April 30, 2022.
  • Pending approval following further developments this year, B Lab would plan to begin implementing the new performance requirements in 2023 using a phased approach. This will provide sufficient time for companies to prepare for the adoption of any new standards, in order to minimize disruption to existing B Corps and companies in the queue to certify.
  • To learn more about this project and updates to the B Corp Performance Requirements, please join one of the two informational webinars that will be held on 22nd of March 2022 at 11 am Eastern Time and 7 pm Eastern Time.

Over a year ago, B Lab launched a review of the performance requirements for the B Corp Certification. Our aim was to understand whether more specific and mandatory performance requirements on key topics could ensure that B Corp Certification remains a differentiation of high-performing companies using business as a force for good.

Following a year of engagement with more than 1,200 stakeholders from around the world, B Lab’s Standards Advisory Council, an independent, multi-stakeholder group overseeing B Lab’s standards, has agreed on a proposed structure for further development of revised B Corp Performance Requirements. This structure will explore approximately ten specific topics that are universally applicable and most relevant towards achieving an inclusive, equitable, and regenerative economy, and include specific performance requirements that will be contextualized to a company’s particular circumstances. Featured in these requirements is the usage of and/or performance on the B Impact Assessment — historically the primary driver of the B Corp Performance Requirements — recognizing the Assessment’s historic and ongoing value for impact management and benchmarking.

Because these changes signal a major shift for B Lab, our standards, and the over 4,500 B Corps currently in our community, we’re engaging in a thoughtful and multi-phased development and implementation approach to ensure that the new requirements are more impactful, clear, and responsive to stakeholders. We also want to ensure that current B Corps and companies interested in joining the community will have sufficient time to adapt to these new standards. The development of the proposed requirements will occur through multiple phases of additional stakeholder engagement in 2022, with implementation aimed for early 2023 using a phased approach.

Proposed New Requirements 

Drafts of new performance requirements will initially be focused on the following core topics based on extensive stakeholder feedback and an analysis of potential topics that are comprehensive and universally applicable:

  • Purpose: B Corps act in accordance with a defined purpose that includes an emphasis on impact and a consideration of stakeholders.
  • Ethics and Anti-Corruption: B Corps act ethically and free from corruption, and have relevant practices in place to do so in their own operations and value chain.
  • Impact Management: B Corps manage the impact of their business comprehensively and consider all stakeholders in their decision-making.
  • Living Wages: Workers can afford a decent standard of living for themselves and their families.
  • Worker Empowerment: Workers are empowered. They can associate with one another, share their (collective) views, and hold management accountable.
  • Human Rights: B Corps respect human rights. Negative human rights impacts are prevented, mitigated, and remediated.
  • Justice, Equity, Diversity, and Inclusion: B Corps have inclusive and diverse work environments and contribute meaningfully to a just and equitable society
  • Climate: B Corps take climate action in accordance with science to combat climate change and its impacts in their own operations and value chain.
  • Environmental Management: B Corps have an environmental management system (EMS) covering waste generation, energy usage, water usage, carbon emissions, and biodiversity that demonstrates their commitment to minimizing the negative impacts of their operations and pursuing positive impact.
  • Collective Action: B Corps take action in their business community, industry, or regulatory environment to achieve an equitable, inclusive, and regenerative economy, such as political advocacy, sharing best practices, and/or bold partnerships and collaborations.
  • Risk Standards: B Corps are required to adhere to additional requirements that are related to specific material impacts of their business model and/or practices, in addition to the other requirements already highlighted and applied universally. This includes, for instance, specific requirements for multinationals or additional requirements to meet B Lab’s controversial issues standards and expectations that may be set through B Lab’s Disclosure Questionnaire and complaints process.

All topics are subject to ongoing revision, inclusion, or exclusion based on ongoing research and input from stakeholders. The incorporation of other cross-cutting and related topics (such as sustainable procurement) will also be considered.

Among other options considered, a path forward with a comprehensive set of requirements on specific topics was determined to be the most impactful, clearest, and most responsive, for the following reasons:

  • There was a clear mandate from stakeholder engagement in favor of specific requirements, as long as those requirements didn’t add to the complexity of the certification requirements.
  • Requirements on specific topics would optimize the impact of the standards by creating specific expectations of meaningful performance on pressing and material issues.
  • The topics highlighted above provide a balance of comprehensiveness and focus, which in turn allows the standards to offer more clarity around the expectations of B Corps, for both companies and other stakeholders. They also provide the potential to have more simplified certification processes and avoid the concerns about additional complexity raised during engagement.

This proposal also introduces a variety of other benefits including the ability to introduce more meaningfully contextualized requirements to size, sector, and regions, and to identify and acknowledge ‘equivalent’ standards that a company may already be meeting and therefore would negate the need for additional verification. (For example, if a company already has an approved third party certification on a topic related to human rights, that could be used to fulfill the human rights requirement.)

While there are several open questions for further development over the next year, among the most important remaining questions is the specific role of the B Impact Assessment. Importantly, stakeholder engagement has identified that the B Impact Assessment is an incredibly powerful and detailed mechanism to benchmark performance and manage impact. This is further demonstrated by its usage from more than 150,000 businesses, including both B Corps and non-B Corps. And yet, its complexity also produces limitations, including challenges of contextualization, efficient, and accurate completion and verification and managing score changes across version changes. The incorporation of the B Impact Assessment as a component of the B Corp Certification Performance Requirements introduces exciting opportunities to think about ways to leverage its strengths more effectively while also avoiding some of those potential limitations.

 

Next Steps for Development and Implementation

 

Over the course of 2022, we will undertake the following performance requirements development phases:

  • January 2022 – June 2022: Detailed draft development, which will include various iterations and deeper engagement with key experts and stakeholders on the topics being developed, as well as our Regional Standards Advisory Groups and Standards Advisory Council. If you’d like to share your input during the draft development phase and/or signal your interest in participating in the testing phase, please complete this testing participation and feedback form (available only in English) by April 30, 2022.
  • July 2022 – September 2022: Testing, including engagement with companies to understand the actual implications of requirements.
  • November 2022 – December 2022: Public comment period, allowing all interested stakeholders to provide final feedback on the standards to confirm whether there are substantial concerns that require further development, or whether a ‘public mandate’ has been demonstrated for them.
  • January – March 2023: Review by our Standards Advisory Council and Board of Directors, independent bodies that ensure both the impartiality and credibility of the processes we undertake to develop our standards, and the standards themselves.

These timelines are subject to change based on the lessons learned within each phase. While we know that no standard will ever be perfect, and that there will continue to be refinements and adjustments in the future, our first priority is ensuring both an inclusive development process and the highest quality standards possible, which sometimes requires changes to timelines.

As indicated in the development timeline, to provide input during the draft development phase and/or signal your interest in participating in the testing phase, please complete this testing participation and feedback form (available only in English) by April 30, 2022.

As the standards are further developed, B Lab will also be working towards developing a detailed implementation plan for the new standards. Most importantly, any new standards will:

  • Be phased in over a period of time, both for continued learning and improvement on the part of B Lab and the standards process, and to minimize the disruption to companies in the midst of their certification.
  • Existing B Corps will have sufficient time to prepare for the adoption of any new standards, likely at least one full certification term after their approval, in order to maintain continuity of the community.

The goal with new standards is not to remove companies from the B Corp Community, or necessarily to make the certification more exclusive or difficult to obtain. Rather, the goal is to ensure that the movement continues reflecting the leadership necessary for the moment and the future, which includes ensuring it is feasible and accessible for a variety of businesses, such as those that have been historically marginalized. At the same time, standards are only meaningful if they are able to differentiate high performance, and if they are understood, embraced, and met. Thanks to everyone who has participated in the development process so far, and to all those upholding our standards to achieve an inclusive, equitable, and regenerative economy.

To learn more about B Lab’s review of B Corp Performance Requirements, please read our previous announcements here and/or join one of the two informational webinars that will be held on 22nd of March 2022 at 11 am Eastern Time and 7 pm Eastern Time.