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Companies with clients in controversial industries

Under the current B Lab Standards (V1.6), companies not directly involved in a controversial industry or practice, but who have clients in such industries, may be required to meet additional requirements in order to be eligible for B Corp Certification.

The content on this page relates to risk management and mitigation for companies currently undergoing the certification process on the current B Lab Standards (V1.6). To understand how risk is managed in the new B Lab Standards (V2.1) download the Foundation Requirements here or log in to B Impact.

B Lab has developed a framework to assess the negative impacts of certifying companies with clients in controversial industries, incorporating concepts from internationally recognised frameworks which considers the nature of the involvement of the certifying company with their client’s potentially harmful practices . This framework will be used to assess company cases until certification begins on the new B Lab Standards (V2.1) in full in 2026.

The diagram below demonstrates at a high-level how the categorisation of the client industry, combined with the nature of the certifying companies involvement leads to different pathways for certification eligibility, based on additional requirements the certifying company must meet to ensure transparency, and in some cases, remediation including reduction in revenues from harmful industries. All outcomes are subject to final review and approval by B Lab. Continue reading to learn about the industry categorisations and definitions of company involvement.

CCI Approach

*Companies who submit their B Impact Assessment on or before 18 Feb 2025, including companies undergoing recertification who initially certified before this date, will be eligible for certification and will be given one recertification cycle to reduce total revenue from client(s) in an ineligible industry to <1% as long as they meet the same requirements as Pathway 2 during their current assessment. The exception to this is companies in the US and Canada where a moratorium is applied for involvement with the prison industry. Learn more here.

THE NATURE OF A COMPANY’S INVOLVEMENT 

Taking guidance from the framework used by the UN's Guiding Principles on Business and Human Rights, B Lab is using the following levels to categorize the nature of a company’s involvement in a controversial or ineligible industry: 

Nature of involvement

Here are some examples of how a company may be classified under this framework:

Associated:

  • Toilet paper company selling its products to a tobacco company;

  • Company installing access ramps in a fossil fuel facility;

  • Flower shop selling plants to the defense sector.

Linked:

  • Corporate wellness company hired to provide its services to employees of a pharmaceutical group;

  • Hiring agency helping a charity lottery to recruit new employees;

  • Bookkeeping services to a nuclear power plant.

Contributing:

  • Company sells/rents drilling equipment to fossil fuel companies;

  • Legal firm representing its mining clients in litigation cases related to their negative social or environmental impacts;

  • Marketing agency working with gambling clients.

These examples above are non-exhaustive, and the classification is dependent on the interaction between the certifying company and their clients as the actual and potential impacts of these interactions may vary. For instance, a steel company providing metal beams for the construction of a new office of a Pharmaceutical company will be assessed differently from a company developing steel to be used by gun manufacturers.

INDUSTRY CLASSIFICATION IN MORE DETAIL

B Lab currently applies a category of ineligible industries for companies which sell products or services to clients in industries acting against B Lab’s Theory of Change. These are informed by the Foundational Requirements (1.2) in the new B Lab Standards (V2.1).

Clients in controversial industries

Companies selling products or services to clients in these industries could influence adverse impacts:

  • Charity Lotteries

  • Debt Collection agencies in emerging markets

  • Nuclear Power or Radioactive Materials

  • Mining

  • Pharmaceuticals

  • Recreational Marijuana

Clients in ineligible industries

Companies selling products or services to clients in industries acting against B Lab's Theory of Change: 

  • Fossil fuel producers

  • Gambling

  • Pornography

  • Prisons and detention centers (including labor)

  • Tobacco (including all nicotine products)

  • Weapons and Defense

For further information on how we define each of the industries listed about, click here. 

PATHWAYS TO CERTIFICATION FOR COMPANIES WITH CLIENTS IN CONTROVERSIAL OR INELIGIBLE INDUSTRIES

The pathways below demonstrate the requirements a company with clients in controversial or ineligible industries must meet in order to certify, based on the industry categorisation of the client, and the nature of the certifying company’s involvement.

PATHWAY 1: The company is eligible to proceed with B Corp certification, provided they disclose involvement on their public B Corp profile.

Applicable for 

  • companies with clients in controversial industries who are linked to adverse impacts OR

  • companies with clients in controversial and ineligible industries who are associated with adverse impacts OR 

  • companies with past clients in ineligible industries in the last 5 years but not serving them anymore

PATHWAY  2: Requiring companies to disclose involvement on their public B Corp profile AND set up a grievance/complaints mechanisms and have a whistleblower protection policy. For further detail on meeting this compliance criteria, click here.

Applicable for 

  • companies with clients in ineligible industries that are linked to adverse impacts OR 

  • companies with clients in controversial industries that are contributing to adverse impacts  OR 

  • companies with clients in ineligible industries that are contributing to adverse impacts with less than 1% of revenue from these industries

PATHWAY 3: Meet Pathway 2 requirements and meet 1% of total revenue threshold from each ineligible industry OR meet 1% of revenue threshold before certification for companies starting B Corp certification journey after 18 February 2025*

Applicable for: 

  • Companies with clients in ineligible industries that are contributing to adverse impacts with more than 1% of revenue from each industry

 *Companies who submit their B Impact Assessment on or before 18 February 2025, including companies undergoing recertification who initially certified before this date, will be eligible for certification as long as they meet the same requirements as Pathway 2 and will be given one recertification cycle to reduce their total revenue from each ineligible industry to <1%.

Companies contributing to “industries acting against the B Lab Theory of Change” as will be defined by the Foundational Requirements (1.2) in the new standards and generating more than 1% of total annual revenue from an ineligible industry are not eligible for B Corp Certification. 

(Last updated April 2025)