Everything you need to know about B Corps (in under 7 minutes)
More and more businesses are becoming B Corp certified, but what does it mean? And is it a good thing?
B Corp brands are booming. We’re seeing a rise in the number of businesses proudly displaying the B Corp logo on their websites and products, and demand for new B Corp certifications is at an all-time high.
This is good news for consumers (and the planet). B Corp businesses are committed to balancing profit with purpose and the B Corp certification demonstrates that a business values society and the environment. When you choose to spend money with a B Corp, you know it has withstood rigorous testing to verify its credentials – an important step if you want to avoid greenwashing traps.
But what does it really mean to be a B Corp? How do businesses get certified? And can B Corp status guarantee sustainability? Here we’re covering everything you need to know…
IN THIS POST:
What is a B Corp?
Certified B Corporations, or B Corps, are purpose-driven companies that put as much emphasis on their social and environmental impact as they do their profit. They are brands that look beyond their bottom line to benefit all stakeholders, not just shareholders.
B Corps are verified by B Lab, a global non-profit network created in 2006 to inspire people to use business as a force for good. As Lead Executive, Eleanor Allen, says: “It sits within B Lab Global's mission and the goal of the broader B Corp movement to transform the global economy into a more inclusive, equitable, and regenerative system for all people and the planet.”
Photo by SJ
B Lab cofounders, Andrew Kassoy, Bart Houlahan, and Jay Coen Gilbert, say the original inspiration for the B Corp movement came from a brand called Newman’s Own, which gives 100% of its profits to charity.
“Thanks to the wisdom of other early responsible business leaders, the B Corp idea evolved to be not just about charitable giving, but about transforming the economic system through rigorous standards for overall social and environmental performance, public transparency, and legal accountability to balance profit and purpose.”
How do businesses get B Corp certified?
It’s not an easy process, but getting that big B logo is a good way for companies to show they are dedicated to doing business better. To apply for certification, hopeful B Corps have to answer 200+ questions as part of the B Impact Assessment, covering everything from supply chains and carbon footprints to employee benefits and charitable giving. Businesses are given a score based on the assessment, and must get at least 80 to qualify.
Note: the B Impact Assessment is a free and confidential online tool that any company can use to measure its impact on its workforce, communities, customers, and the environment.
There’s a legal aspect too – as part of the certification process, B Corps must update their constitutional documents, showing they are legally required to consider the impact of their decisions on all their stakeholders. They also have to report any sensitive practices, fines, or sanctions in a confidential disclosure questionnaire.
B Lab’s Independent Standards Team then verifies the applications, and only businesses that meet its high standards get the green light. All B Corps must recertify every three years.
Who can certify?
Businesses both big and small can apply for B Corp certification, but there are a couple of requirements they need to meet. The first is that they must be a for-profit company. Charities and non-profit organisations aren’t eligible for certification, although partnerships, mutuals, and cooperatives usually are.
The second requirement is that a business must have been running for at least one year. This is because the B Impact Assessment is based on data from the past 12 months, such as policies and practices, and financial records. Start-ups that don’t meet this can instead apply for Pending B Corp status.
Photo by Hybrid Storytellers
There’s no minimum or maximum size, so B Corps range from sole traders to multinational companies. B Corps can be publicly traded (like Natura & Co, which owns The Body Shop and Aesop), and also subsidiaries of publicly traded companies (like Ben & Jerry’s, which is owned by Unilever).
You might be wondering whether controversial or typically ‘bad’ companies can get B Corp certified as well. For these sorts of businesses, such as hedge fund firms, bottled water companies, or mining corporations, B Lab uses an Eligibility Review to assess the enterprise's impacts.
The B Corp website states that within controversial industries, it may be possible for companies to manage potentially negative impacts or practices. “In these circumstances, we must distinguish between good and bad actors by using rigorous standards of verified social and environmental performance, legal accountability, and public transparency.”
What is the maximum score for B Corp certification?
For the B Impact Assessment, businesses need a minimum score of 80 points to submit their B Corp application. Guidance on the B Corp website says: “It's rare for companies to achieve this score initially and most are subsequently required to make improvements based on the policies and practices highlighted in the assessment.”
So, businesses are recommended to aim for at least 83 points before they submit, as it’s common for a score to drop during verification. For comparison, B Corp says the median score for ‘ordinary’ businesses who complete the assessment is 50.9.
That said, B Lab’s cofounders consider that for ‘true leaders’, achieving B Corp certification has always been the ‘starting point, not the end game’. “The ethos of the B Corp movement is continuous improvement. Every B Corp strives to increase its positive impact year over year as they grow their business and seek recertification.”
Photo by Karolina Grabowska
At the moment, the highest scores are generally between 160 and 170 points. In the UK, an Oxford-based underwear brand, Y.O.U Underwear, currently holds the top score with 160.5 points.
B Lab recognises these high-scoring B Corps in its annual ‘Best for the World’ lists, which highlight the global top 5% businesses across each of its impact areas: governance, workers, environment, community, and customers.
How much does it cost to be a B Corp?
While the B Impact Assessment is free to use, businesses pay a one-off fee when they submit their application. In the UK, this fee is a flat £250 (+VAT), while in Europe, it ranges from €250 to €900 depending on annual sales.
Certified B Corps then pay an annual fee, which starts at £1,000 (€1,000 or €2,000 depending on the country) and scales based on the company’s revenue. For example, UK businesses making £150,000 pay a fee of £1,250, while billion-pound companies pay £50,000.
Pending B Corps pay a one-time fee of £500 (€500 or €1,000 depending on the country), which covers 12 months.
UK-based entrepreneurs from underrepresented and marginalised communities can get a 40% discount on the annual certification fees.
Why are more companies becoming B Corp certified?
B Lab awarded its first B Corp certification in 2007. Fast forward to today, and over 6,000 B Corps are now registered in 89 countries.
The non-profit network is also experiencing its highest-ever demand for certification. From 2020 to 2021, B Lab received more than 6,000 new applications and 50,000 registrations on the B Impact Assessment.
Photo by Malik Skydsgaard
It’s no coincidence that this growth occurred during a global pandemic. As the world grappled with another economic downturn and the health crisis magnified existing inequalities, there was a growing sense that businesses should pay more attention to their social and environmental impact. And so, the prestigious B Corp certification evolved into the ‘go-to standard’ for better business.
What’s more, B Lab found that certified B Corps saw an impressive average turnover growth of 26% between 2017 and 2020, compared to the UK average of 5%. Being a conscious company is not just good for people and the planet – it’s good for business too.
With the growing purchasing power of sustainably-minded millennials and Gen-Z, this shift is only set to continue.
Does B Corp status guarantee sustainability?
The B Corp certification is now an almost-universal marker for ethical enterprises. If you spot the logo, you can be sure the business is pursuing purpose as well as profit – whether that’s prioritising responsible production, promoting women’s health and wellbeing, or striving for gender equality.
It’s a useful tool, but that’s not to say you shouldn’t look at the bigger picture. Choosing to buy from, work for, or invest in B Corps is just one aspect of living more sustainably. Does the brand (or its parent company) align with your benchmarks? Are there other certifications, besides B Corp, that matter to you?
Doing your research and making your own judgement is still important. Does the B Corp genuinely care about social responsibility, or are they trying to improve their reputation? Are environmentally-conscious practices engrained in the business, or are they seeking to stand out amidst greenwashing?
No business is perfect, but the B Corp certification shows a commitment to continuous improvement. And if a business breaks the B Corp community’s core values – as in the case of beer brand Brewdog – they’ll be stripped of their B Corp status.
What are your thoughts on B Corps? Do you have any favourites you like to support? Remember, buying from local, independent businesses is important too!
