How to achieve B-Corp status and embrace sustainable measures
The looming climate crisis has consumers and businesses alike wondering what we can do to mitigate the human effects on the environment. Since just under 100 companies are responsible for more than 70 percent of emissions since human-driven climate change was officially recognized, it’s easy to point the finger at large corporations and demand they take accountability.
On top of environmental concerns, the Great Resignation has forced companies to evaluate the treatment of their employees and office culture. The societal and environmental impacts of major corporations have merged together in the minds of consumers and they’re making purchasing decisions on this basis. Nearly 80 percent of U.S. consumers consider the overall sustainability of a product or brand when making purchases.
Because of the outcry from consumers, great strides have been made to help regulate corporate emissions and hold companies responsible for their efforts toward sustainability. One of the most respected designations in sustainability is B Corp certification. The roughly year-long process takes a deep dive into a company to gauge the social and environmental impact of the company’s actions.
Becoming B Corp certified is no easy task. The process is lengthy and thorough, helping to make it one of the most respected certification processes currently in existence. Over 5,000 companies in the U.S. hold B Corp status, and companies must be reevaluated every three years to make sure they stay true to their intentions. Let’s take a look at what it takes to pass this certification process and why it’s worth your time and money to join the list of B Corp certified companies.
What does B-Corp certification involve?
The length and process of the B Corp certification process will vary depending on the size of the company. For instance, smaller companies with up to $100 million in annual revenue will require a small/medium enterprise application, which can take anywhere from six to eight months to complete. If your company makes more than $100 million in annual revenue, you will need to complete a large enterprise application, which can take considerably longer, depending on the complexity of the company, e.g. the number of subsidiaries the company has.
Before beginning the process, you want to make sure you have thoroughly organized your financial and operational records. You’ll need to provide anything that can show where your materials come from, how much waste you create, and how well you treat employees. You’ll also want to compile any documents that reflect company culture. Talk to relevant stakeholders to make sure everyone is organized in their department and ready for interviews.
The B Corp evaluation process is a lengthy 15-step assessment, and even when companies receive the certification they still need to be recertified every three years. Certification begins with a free and confidential B Impact Assessment, a digital tool that will help you measure the company’s impact on the environment and all stakeholders. Your company will need to score at least 80 points on the B Impact Assessment before moving on to full B Corp Certification.
Next is the B Corp Legal Requirement. In this process, companies determine the impact of their social and environmental decisions on their various stakeholders using a model known as shareholder governance.
These two preliminary steps take place before the actual evaluation to help companies make sure they qualify for an assessment. These steps also help point companies in the right direction for how they can be more sustainable before being evaluated.
B Corp Assessment
The actual assessment process will look into three main objectives: verifying the company’s social and environmental performance, its public transparency, and its legal accountability. Broadly speaking, in order to achieve certification, a company must:
Demonstrate high social and environmental performance by achieving a B Impact Assessment score of 80 or above. This applies to both domestic and multinational corporations.
Make a legal commitment by changing its corporate governance structure to be accountable to all stakeholders—not just shareholders—and achieve benefit corporation status, if available in their jurisdiction
Exhibit transparency by allowing information about the company’s performance to be measured against the certification organisation’s standards, and to be publicly available on the organisation’s website
Any company of any size, including startups, can apply for a B-Corp certification. As you can tell by this brief description of the requirements, this evaluation is looking for a lot more than just environmental and social impacts of corporations. In essence, this assessment really tests how trustworthy and open a company is.
B Corp Benefits
Becoming a B Corp certified company comes with a lot of perks as the B Corporation status is becoming well known and respected among consumers and businesses alike. Getting the official certification is no easy feat. You have to prove that you and your company are making concrete progress to benefit people and the environment, and any claims must be backed with a paper trail.
B Corp certification will improve your company’s reputation. The status means that prospective employees and business partners can see and review your filings and know that your intentions are serious.
Becoming B Corp certified will also increase engagement with employees. The certification shows current and prospective employees that transparency and honesty are at the forefront of your company’s intentions. You can’t hide anything in this certification process, so getting the approved status shows that you are consciously creating real environmental and societal benefits.
Another major benefit of B Corp certification is having more control over the company’s overall impact. When you run a traditional for-profit business, profitability is the main focus, especially when there are shareholders involved. If your company has a B Corp certification, your investors know from the get-go that your goals are much larger than simply turning a profit.
Now, go get certified
Now you know what to expect for the certification process. The best thing you can do before applying for the certification process is to get organized. Just as you would prepare for any ISO certification or indeed an external financial audit, gather all of the potential evidence about the company’s environmental and social impact.
Not only will the evaluation process make your company a better corporate citizen, it may also have a positive impact on your overall brand. The B Corp organisation releases a “Best for the World” list every year of the companies that go above and beyond in their efforts toward sustainability. This list is curated from applicants from that year and is based on the evidence found in the application process. Making the list is a badge of honor that can be a real milestone for companies, whether they’re just starting out or already part of the Fortune 100.
