A guide to becoming a B Corp - Learn from an expert consultant
Navigating the B Corp Pathway with the expert Tim Jones
By Alondra Ponce in conversation with Tim Jones
This edition delves deep into the world of B Corps, guided by the expertise of Tim Jones, the first certified B Corp consultant in New Zealand. With a proven track record of assisting organizations in their journey towards sustainability, Tim provides practical tips and insights into becoming a B Corp.
Let’s dive into understanding what it means to be a B Corp and why it might make sense for your business.
What is a B Corp?
A B Corporation (or B Corp) is an organization that has been certified by the NGO “B Lab” as meeting high environmental and social standards.
There are currently over 8,000 companies in 95 countries that have joined the B Corp community. As Tim highlights, “at the most fundamental level, certified B Corporations seek to find a balance between people and profit.”
According to the B Corp website, a company must demonstrate the following to achieve certification:
Demonstrate high social and environmental performance by achieving a B Impact Assessment score of 80 or above and passing their risk review. Multinational corporations must also meet baseline requirement standards.
Make a legal commitment by changing their 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 their performance measured against B Lab’s standards to be publicly available on their B Corp profile on B Lab’s website.
Currently companies’ performance is reviewed around:
Governance,
Workers rights
Community impact,
Environmental impact
Scope of work and customer rights
Based on these five areas, companies need to score a minimum of 80 out of 200 points on this self assessment to then be eligible to submit for the independent verification.
Tim points out that if you score above 80, “you are able to tell your stakeholders that you have been independently verified to be operating at the highest levels of transparency and accountability when it comes to your social and environmental impact.”
Note: the B Corp impact assessment is currently undergoing a major update that will likely change the performance areas from 5 to about 9 sections. As a result, this may slightly change the minimum score needed.
What are the benefits of becoming a B Corp?
In Tim’s experience helping companies on their B Corp journey, he has found that there are typically four main benefits that joining B Corp can offer:
Employees: B Corp offers a framework for employees to feel like they are building a better (more sustainable) future; they become active participants in the company’s policies, strategy, and action plan. Effective, transparent ESG and social responsibility programs reduce involuntary employee turnover by as much as 50% (Source: Babson College, Starbucks, Campbell, Glassdoor). Moreover, 66-75% of employees aged 34 and younger say they want to work at a company that matches their personal values and does good in the world (Source: FastCompany, LinkedIn, YouGov).
Customers: increasingly, customers are aligning their pockets with their values. They’re looking for trust and transparency, and there are more pressures on companies to have to perform better when it comes to their social and environmental performance. In fact, 85% of consumers have shifted their purchasing behavior towards being more sustainable in the past five years, and 60% rate it an important purchasing criteria1 Certified B Corps can “walk the talk” when it comes to what matters most to consumers.
Supply chain: From environmental metrics to labor conditions, we're seeing more companies requiring or requesting more disclosure from their suppliers. The majority of large enterprise buyers have integrated sustainability disclosure, assessment, and evaluation into their procurement process and vendor selection, with increasing levels of due diligence and data rigor. Going through the B Corp assessment requires companies to understand the composition and effects of their supply chain.
Investors: 80% of institutional investors screen investments using ESG criteria and incorporate ESG risk factors; 61% of investors consider strong ESG performance a sign of “ethical corporate behavior which reduces investment risk”2
Moreover, B Lab did a meta-analysis of all the studies of financial performance of B Corps over the last few years. According to the report, B Corps outperformed in terms of top-line growth. B Corps were more likely to grow their revenue and work base between 2019 to 2021. Around the world, B Corps were significantly more likely to survive the pandemic. More than 95% of B Corps continue to operate through to 2023 compared to 88% in the general market. The financial impacts of B Corp certifications are generally neutral or positive, and they become more favorable over time.
“The key principle here is profit versus profiteering. Profiteering is when you are looking to maximize profit at all costs. Making a profit is great, but it’s what you do with the profit, and how you make the profit that really matters. That’s the balanced approach that B Corp brings.” Tim Jones
How do you get started with the B Corp certification?
As opposed to the 70 different assessments across 5 areas, B Corp recently changed the structure to have only one B Impact Assessment (BIA) that is adapted to companies based on their (1) geographic location, (2) size, and (3) industry sector. This means that companies are asked the most material and relevant questions to demonstrate their impact.
Here are common themes which may be assessed:
When choosing the best strategy to begin your sustainability journey, the B Corp assessment can act as a materiality-like assessment to identify what matters most to the company and its stakeholders, particularly in the governance section.
However, many companies Tim has worked with are hesitant to go through the B Corp process because they don’t have a clear sustainability plan nor are actively measuring sustainability KPIs. According to Tim, that is the perfect opportunity to use the B Corp framework - it offers you a starting point for developing your sustainability strategy.
Here are some tips from Tim for companies that want to start the B Corp journey:
Don’t be afraid to open the B Corp assessment - it’s free after all
See what KPIs you are already collecting and tracking - usually there's three to five KPIs you’re already tracking like business travel, energy use, and corporate giving
Have a conversation within your company about next steps, data gaps, and expectations
Final thoughts
While starting the B Corp certification process may be daunting, we believe that it can greatly benefit your business, which is why we have decided to become certified ourselves and are active members of the B Community.
B Corps are reshaping every industry with best practices that can be scaled across businesses. This commitment to social and environmental responsibility represents a powerful step towards creating a more inclusive and regenerative economy for future generations.
If you would like to learn more about the work of Tim at Grow Good, please visit them here. You can also check out their free e-book on all things B Corp certification here.
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