Labels and certifications that demonstrate a company's commitment to reducing its social and environmental impact have become important differentiators. Customers, financial partners, and other stakeholders are increasingly sensitive to the ethical and ecological commitments of the companies they interact with. B Corp certification is a way for commercial companies to highlight their CSR approach and distinguish themselves internationally as being both profitable and having a positive impact on the world.
What is B Corp Certification?
The B Corp (Benefit Corporation) is an international certification issued by the non-profit organization B Lab. Founded in 2006 in the United States, in Philadelphia, B Corp is a global movement of companies seeking to reconcile economic performance with a positive contribution to society and the planet. The criteria for B Corp certification are designed to refocus corporate priorities on social, societal, and environmental impact, with these concerns at the core of B Corp's business model. Through the rigorous B Impact Assessment developed by B Lab, businesses must demonstrate their commitment to transparency and accountability.
The B Impact Assessment not only evaluates a company's performance but also highlights areas where they can improve access to sustainable practices and products for underserved populations.
As of July 2024, there are over 8,900 B Corp-certified companies across more than 100 countries around the world. In Europe specifically, the B Corp community grew by 42% in 2023, with 484 new companies joining across 29 countries. The total number of Certified B Corps in Europe (excluding the UK) is expected to reach 2,000 in 2024.
Why companies should consider B Corp certification
Labels and certifications that attest to companies' commitment to reducing their societal and environmental impact have gained significant importance. Customers, financial partners, and other stakeholders are increasingly paying attention to the ethical and ecological commitments of the companies they interact with. In this context, B Corp emerges as an essential path for companies wishing to showcase their CSR initiatives and stand out internationally as profitable businesses with a positive impact on the world.
The B Corp certification demonstrates a company's commitment to going beyond traditional business practices by integrating social and environmental considerations into its purpose and policy-making processes. This certification is a testament to seriousness and transparency, enhancing stakeholder trust and fostering long-lasting relationships. Moreover, it provides increased visibility and recognition, attracting clients, investors, and partners who share the same values and place great importance on responsible companies.
B Corp also offers international recognition, a valuable advantage for companies looking to expand their operations beyond borders. It facilitates business exchanges by demonstrating to international partners that the company adheres to the highest standards of social and environmental responsibility, as verified by B Lab's rigorous assessment process. This certification helps companies align their policies with global best practices, ensuring they remain at the forefront of sustainable and ethical business operations.
The 5 impact areas of B Corp certification
The B Corp certification assessment evaluates a company's impact in five key areas: governance, employees, community, environment, and customers.
Governance
This section assesses the company's overall mission and commitment to environmental and social impact, transparency, and ethics. It also evaluates its ability to take stakeholders into account in decision-making, through its organizational structure and articles of incorporation.
Workers
This section aims to evaluate the company's contribution to the financial security, health, well-being at work, and professional development of its employees. The label takes into account and values business models that benefit employees, such as companies that are at least 40% owned by their employees (non-managers).
Community
The community section of the B Corp assessment focuses on the company's commitment to the communities in which it operates, hires, or sources raw materials. The assessment evaluates the company's societal impact through equity and inclusion, local economic impact, supply chain management, and any charitable work. Business models that are known to benefit communities are distinguished, such as fair sourcing, distribution via microenterprises, and producer cooperatives
Environment
The B Corp label assesses the overall environmental management practices of candidate companies, with a particular focus on their impact on air, water, land, climate, and biodiversity. This section distinguishes companies whose production processes are environmentally innovative, such as products and services that create renewable energy, reduce consumption or waste, conserve wildlife, or raise public awareness.
Customers
The evaluation of the company's impact on customers takes into account the quality of the services and products offered, ethical marketing methods, protection of personal data, and the availability of feedback channels (returns, refunds, and exchanges, after-sales service). This section particularly distinguishes companies whose products or services have a social purpose, such as artistic, health, education, information products, or services aimed at underserved populations (rural areas, seniors, etc.).
Step-by-step guide to obtaining B Corp certification
To be certified B Corp, companies need to follow a multi-step process. This rigorous process assesses the environmental and social impact of the business, as well as its commitment to sustainable development.
Eligibility
All for-profit companies can apply for B Corp as long as they are legally registered and have been in operation for at least 12 months.
Young companies and startups that wish to demonstrate their commitment before reaching the 12-month mark can obtain "Pending B Corp" status. This status allows these companies to signal to their stakeholders that they are on the certification path. Once a company reaches the 12-month milestone, it can undergo the full verification process.
Complete the assessment
The first step involves completing the B Impact assessment questionnaire. This questionnaire evaluates the impact of a company's activities and business model and determines if the company is eligible for B Corp certification. The B Impact Assessment (BIA) consists of approximately 200 questions across five categories: governance, workers, community, environment, and customers. Companies must achieve a minimum verified score of 80 out of 200 to be eligible for the certification process.
Certification review
If a company's application is accepted after the self-assessment, it will undergo a thorough certification review conducted by B Lab. During this process, B Lab assesses the information provided in the B Impact Assessment and may request additional documentation or clarification to ensure accuracy and transparency.
Audit and verification
B Corp certification involves an audit and rigorous verification of the company's practices during the previous year. This audit is conducted by a qualified evaluator. During this period, eligible companies can benefit from "Pending B Corp" status while awaiting the validation of the process.
Certification validation
Upon successful completion of the review and verification process, companies are required to:
Sign the B Corp Agreement, committing to uphold the standards of the B Corp community for three years.
Sign the Declaration of Interdependence, affirming their commitment to using business as a force for good and supporting a more inclusive and sustainable economy.
Amend the company's articles of incorporation to formally integrate societal and environmental impact into the core purpose of the business.
Pay the annual membership fee
Maintaining certification
Once certified, a company must continuously uphold B Corp standards to retain its status. This involves a recertification process every three years, during which the company updates its B Impact Assessment (BIA) and verifies its score. This process not only ensures ongoing compliance but also encourages continuous improvement in social and environmental practices. By regularly reassessing their impact, certified B Corps demonstrate their sustained commitment to using business as a force for good.
What are the costs of B Corp Certification for companies in Europe?
B Corp certification in Europe involves two main types of fees: a one-time verification fee and annual certification fees based on the company's total revenue.
Effective April 1st, 2024, B Lab Europe is replacing the submission fee with a verification fee for companies that submit on or after this date, which will cover both the cost of submission and verification. The total verification fee ranges from €2,500 for companies with annual sales up to €4,999,999 to €10,000 for companies with sales of €100,000,000 or more. This verification fee is split into two instalments: 10% due at submission and 90% due at verification.
In addition to the verification fee, companies must also pay annual certification fees, which are tiered based on total revenue. This structure allows startups with lower revenue to benefit from more affordable fees, making it easier for them to begin their B Corp journey without significant financial burden. Larger companies with higher revenue will incur higher annual certification fees.
Conclusion
While CSR certifications and labels are sought after by companies to differentiate themselves in a market where ethical and environmental dimensions are increasingly important, B Corp certification offers a double opportunity to distinguish oneself at an international level and to join a network of companies committed to change: the community and participatory dimension of B Corp certification is one of its main assets.
To further enhance this commitment, B Lab has launched a significant public consultation on B Corp standards in January 2024, running through March 26, 2024. This initiative aims to gather feedback on proposed changes to the certification requirements, ensuring that the B Corp certification remains relevant and impactful in addressing current global challenges.
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