The B Corp scheme certifies companies that meet its social and environmental performance standards across the entire company and its products. It requires a company be accountable and transparent to the public according to its assessment score.
About: B Corp was set up in 2006 by B Lab, a Pennsylvania-based nonprofit organization with offices in the United States, Europe, Canada, Australia and New Zealand. B Lab has partnerships in Latin America with Sistema B. The first 82 B Corps were certified in 2007, and now there are more than 3,500 Certified B Corps in more than 70 countries. Most of these companies are small businesses and span a wide range of sectors, from retail to waste management.
Process: B Lab conducts B Impact Assessment of the applicant company’s effects on workers, customers, community and environment against a set of proprietary standards. Companies are analysed from top to bottom on aspects from supply chain and input materials to charitable donations and employee benefits, and certified by the non-profit organization B Lab.
Companies are graded on a scale of zero to 200 for an overall B Impact Score. To qualify as a certified B Corp, a company must achieve a minimum score of 80 points. About one in three that submit for certification will certify, and the review process currently takes anywhere from six to 10 months to complete.
B Impact Score measures four areas: governance, community, environment and customers. An assessment asks questions about how the day-to-day operations of a company make a positive impact in those categories. Companies can earn additional points if their business model creates a positive social and environmental impact as well.
The governance category measures a company’s mission, ethics and transparency. The community category covers an array of concepts: diversity, equity and inclusion; economic impact; civic engagement and giving; and supply chain management. The environment category measures environmental management and a company’s impact on air and climate, water, and land and life. The customer category measures a company’s customer stewardship.
Fees: Annual fees are on a scale based on a company’s annual sales. The lowest fee is $1,000 annually for companies with annual sales below $150,000, all the way up to $50,000 for companies with sales of $750 million to $999 million. The fee for companies with sales of $1 billion or more per year is based on size and complexity of business. These fees help cover the operating expenses of B Lab and fund the verification process
Applicability: B Corp has been described as the business equivalent to the coffee industry’s Fair Trade program. And in that sense, it is broadly applicable to most corporate entities. As of March 2021, there was only one lubricant industry-related entity on the roster – a lubricant condition monitoring company called Fluitec.
Certified B Corp are not to be confused with U.S. benefit corporations, which are sometimes shortened to B Corps. A benefit corporation is a legal structure for a non-profit business.
