A B Corp -- or "B Corporation" -- is a business certified by the non-profit organization B Lab to have met high standards across various areas, ranging from environmental factors to diversity of employees. The non-profit keeps things transparent by listing each B Corp on a page available to the public, showing the date that the company was certified and the breakdown of its scores. There is also an annual fee companies pay to nonprofit organization B Lab in order to keep their certifications and use the B Corp logo, which is based on the region and the size of the business. B Corp certified companies use their certified stamps to drive movements, foster relationships, attract talent, enhance their impact, amplify others voices, and defend their missions.
B Corps undergo a rigorous certification process, completing an exhaustive evaluation of their companies impact on all stakeholders, and having their evaluations reviewed by B Lab, the non-profit that oversees B Corp certification. B Corps are for-profit companies that go through the voluntary certification process set out by B Lab, the nonprofit organization that sets standards for corporate responsibility, transparency, and social and environmental performance. According to B Lab, the nonprofit, companies are required to demonstrate strong social and environmental results, commit to laws through changes in corporate governance structures, and exhibit transparency in order to earn the certification. Maintaining a B Corp Certification with a B Impact Assessment allows companies to establish goals to improve, generate more positive social and environmental impacts, and monitor their performance over time.
For companies to be certified as B Corps, companies need to pass the B Impact Assessment, which is a tool used by B Lab to evaluate a business's impact on its workers, community, environment and customers. To become certified as a B corp, the company must achieve at least a score of 80 out of 200 points on the B Impact Assessment.
By becoming a B Corp, entrepreneurs are able to safeguard their mission while elevating the social and environmental values at the heart of their business to lawful status, meaning that new investors and the new board will have a responsibility to take into account shareholders as well as stakeholders in making decisions going forward. When a business is certified a B Corporation, it is joining a community of business leaders who share the belief that businesses can solve social and environmental problems.
B Corp vs. Public Benefit Corporation
The B Lab also created a new business incorporation designation for companies looking to do social good, called the Public Benefit Corporation. This is a separate designation from the B Corp certification. While in most cases becoming a public benefit corporation is not required to have the B Corp certification, a benefit corporation can choose to do so, as (1) the general public is more familiar with certified B Corps (which allows a company to use a recognized B logo) compared with legally registered benefit corporations, and (2) annual reports required by the B Lab may be helpful in helping meet the states legal reporting requirements for a benefit corporation. Read our blog post about Public Benefit Corporations to learn more about this distinction.
While the process for certifying B Corps differs depending on your company's size and complexity, all companies start with taking the B Impact Assessment. Due to the growing popularity of the B Corp certification, there is now a large network around these tools, like B Lab Global and your Regional B Lab.
Ecolytics can also help you better understand the B Corp requirements. Our platform tracks everything quantitative that you need to get certified, and gives your company a roadmap to improve and get a better score. If you’re interested in learning more, request a demo: ecolytics.io/demo