- Doing good while doing business is of great concern to many SMEs
- Becoming a B Corp could help boost your company’s ESG commitments
- But what is a B Corp and does your business have what it takes to meet its standards of social and environmental performance, transparency and accountability?
Businesses can find it hard to achieve that tricky balance between making money and doing good. But with the UK setting key targets of achieving net zero by 2050 (2045 in Scotland), developing a business strategy that combines profit making with changes to help the planet and community, is more important than ever.
No matter how big your business is, transitioning to net zero and being proactive about your social and environmental performance, can help you become more resilient and attract the rapidly-expanding group of eco-conscious consumers.
One way to take this important step may be to consider becoming a Certified B Corporation. Commonly known as B Corp, this relatively new type of business (the first companies were certified in 2007) is gaining increasing prominence.
What are B Corp businesses?
Simply put, B Corps are comparable to a Fair Trade type certification. These are companies that have been verified to meet high standards of social and environmental performance, transparency, and accountability.
The UK and France have more B Corps than any other European countries. There are now more than , who are responsible for around 42,100 workers. Globally, there are more than 5,000 B Corps across 82 countries.
B Corps are committed to being responsible businesses and are willing to have their practices independently vetted and to make their results transparent.
Their focus is on the stakeholder rather than the shareholder, i.e. considering those who are affected by their actions – such as employees and members of the community in which they operate and have an environmental impact – rather than the stakeholders who own them.
What is B Corp certification?
To become a Certified B Corp, a company must have been operating for profit in a competitive market for at least 12 months – though start-ups should check out becoming a , which can help them incorporate B Corp principles into their business before they can fully qualify.
Companies go through a rigorous certification process, completing a comprehensive assessment of their company’s impacts on all stakeholders, and having their assessment verified by B Lab. They must earn at least 80 points out of 200 on their Impact Assessment.
For those SMEs not sure if their business is ready to become a B Corp – perhaps because they have only just started on their sustainability journey – the provides a useful sustainability framework to help them improve their business’ environmental, social, and corporate governance (ESG). There is no fee for the assessment – though there will be a cost if you choose to become certified.
All companies looking to become a B Corp must meet the B Corp legal requirement and update their Articles of Association to include mission-aligned legal language. The three part process is:
- Complete the and achieve a verified total score of 80+ points.
- Meet the – amending Articles of Association to embed a commitment to consider the impact of decisions on all stakeholders.
- Sign the B Corp Agreement and the Declaration of Interdependence.
Famous B Corp companies – making a difference
Big brands such as Evian, The Body Shop, and Danone, are all Certified B Corp businesses. But becoming a B Corp is a commitment, and it may not be the best fit for all SMEs, at all stages of their growth. Renewals need to be carried out every three years and keeping your business practices sustainably aligned may not always be feasible, particularly when cash flow is a problem.
But even if you do not become a B Corp yourself, you can still make a difference. The lists the scores of all B Corps globally. That means you can find firms you can buy from, do business with, and invest in, that you know have been independently vetted for their sustainability and ESG activity.
‘Slow-fashion’ brand , for example, was certified in May 2022 and has a B Impact Score of 105.4 (the median score for ordinary businesses is 50.9). The company creates sustainable swimwear at a small zero waste factory in the heart of London.
Another recent recruit is 11 London, the to be awarded B Corp status. Its MD, Matthew Hunt, is well aware of the importance of committing to and sharing business values for the good of customers and of the business.
“Sustainability isn’t just about what we buy, it’s about how we work,” he said. “And unless we live by what we stand for, we certainly won’t attract and keep talented people who share those values.
“This is a work in progress, and it’s challenging all of us here to improve how we do business – individually as well as collectively.”