B Lab's New Standards Impact Topic: Climate Action
B Lab’s standards define the performance that a company must meet and continuously improve upon to achieve and maintain B Corp Certification. Since 2006, we have evolved the standards to improve their impactfulness and clarify what it means to be a leading business, incorporating feedback from diverse stakeholders.
To achieve these goals, the new standards require companies to meet specific requirements across seven Impact Topics. While we have developed the new standards with the existing standards in mind, you can expect to see new topics and evolved requirements where topics overlap, designed to improve business impact.
After all, the B Corp community is built on the principle of continuous improvement.
With global temperatures rising and climate impacts accelerating, businesses can no longer afford to delay action. Brigitta Nemes explains how this topic challenges companies to take meaningful, measurable steps to reduce emissions, align with climate science, and contribute to a just and sustainable transition.
Describe the Impact Topic in a nutshell:
Under the Climate Action Impact Topic companies develop an action plan to support limiting global warming to 1.5°C, and larger companies include Greenhouse Gas (GHG) emissions and validated science-based targets.
What is the purpose of the topic, and why does it matter in today’s world? The past few years have been the Earth’s warmest on record (with 2024 confirmed to be the hottest year on record). We can expect even more devastating effects of the climate crisis, making events like droughts, hurricanes, and floods more intense and unpredictable.
Despite growing awareness and global commitments, current government pledges to cut greenhouse gas (GHG) emissions are far from sufficient. According to the latest scientific data, the world is on track for just a 2.6% reduction by 2030 (from 2019 levels) compared to the 43% necessary to limit global warming to 1.5°C by the end of this century. It is well understood by now that the climate crisis, ecosystem health, and human well-being are all interlinked. No one can thrive if irreversible changes due to the climate crisis lead to unstable societies and unlivable conditions on Earth. It is, therefore, a business imperative to take action to combat the climate crisis and its impacts.
When we zoom in on corporate climate action, we see progress in reducing emissions. However, much like government efforts, the scale and scope of these actions still fall short of what’s needed. The Climate Action Impact Topic is designed to accelerate measurable progress so that companies meaningfully contribute to limiting global warming to 1.5°C and to achieving global net-zero GHG emissions (see footnote 1) by 2050.
How has the emphasis of the topic changed throughout the development process and what factors contributed to that?
Measuring greenhouse gas (GHG) emissions has not always been a top priority for every company in the past decade. However, there is an increasing regulatory pressure in different parts of the world (from Costa Rica to Europe to Japan) that mandates larger companies to measure and disclose their emissions.
While disclosing GHG emissions is an essential step toward transparency, there is also growing scrutiny over the accuracy of companies’ environmental claims, particularly those related to reducing GHG emissions. For example, the Green Claims Directive in Europe now requires that environmental claims be backed by scientific evidence.
In response to this evolving landscape—and the growing urgency of the climate crisis—the new Climate Action Impact Topic requires larger companies to set science-based targets for their Scope 1, 2, and 3 emissions (see footnote 2). To set credible science-based targets and ensure claims are accurate, companies must have their GHG inventories verified by an accredited third party. Additionally, their targets must be validated by the Science-Based Targets Initiative or verified by an independent third party.
Acting on climate change is not just an environmental imperative—it’s also becoming a business necessity. Given the urgency of the climate crisis, it’s crucial for smaller companies (Small and Medium Enterprises - SMEs) to take action now, rather than delaying efforts in the pursuit of perfecting emissions measurement. Measuring GHG emissions can be particularly resource-intensive for smaller companies. These businesses may also face the risk of greenwashing if they set targets without relying on accurate and verified emissions data.
Therefore, this Impact Topic emphasizes action and requires smaller companies to have a climate action plan with measurable targets that don’t rely on GHG measurements but still demonstrate their commitment to the Paris Agreement. The key expectation is that companies demonstrate real, tangible actions and track their progress, without necessarily needing perfect GHG data. Likely focus areas for smaller companies include business travel, purchased goods/services, and transportation.
For example, SMEs can:
Implement a responsible travel policy and track reductions in business flights
Switch to sustainably sourced materials
Additionally, SMEs are required to publicly share their climate action plans and progress, ensuring their efforts are credible and accountable to stakeholders.
What Impact Topic requirement(s) are you most excited about - and why?
It's exciting to see this Impact Topic incorporate alignment between a company’s advocacy efforts and its climate ambition. This focus on advocacy is particularly timely as businesses are increasingly expected to take leadership in shaping climate policy (see also AAA Framework for Climate Policy Leadership, Environmental Defense Fund; The 4 A's of Climate Leadership - Policy). Equally important is the emphasis on just transition (see footnote 3)—an area that is gaining significant attention due to its critical role in ensuring that climate action is fair, inclusive, and benefits all stakeholders (Just Transition Climate Transition Action Plans, 2022 - Guidance, We Mean Business Coalition).
What similarities are there between this new Impact Topic and the existing standards?
The new impact topic builds on the climate action practices already outlined in existing standards, like GHG measurement, setting (science-based) targets, reducing emissions, and reporting on progress. These foundational elements remain central, but are not framed in a more ambitious and action-oriented approach. Where are the biggest growth areas for companies?
Smaller companies may have already been working on reducing emissions but might not yet have formalized plans in place. The new Impact Topic encourages these companies to identify key areas within their operations and value chains where they can support limiting global warming to 1.5°C and set meaningful, measurable targets.
Larger companies, on the other hand, are more likely to have already developed climate transition plans. However, aspects like just transition may still be relatively new to them and require more attention moving forward to ensure their plans are fair and inclusive to stakeholders that may be affected.
What is your biggest tip for companies working towards the new standards / this topic in particular?
For smaller companies:
Explore Implementation Resources: Utilize platforms like the SME Climate Hub, which offers a range of tools and a free training course in multiple languages [AR] [EN] [ES].
Engage with Your Local Business Community: Collaborate with others to develop and implement your climate action plan. (This could also count as collective action under the Government Affairs & Collective Action Impact Topic.)
Leverage tools for supplier engagement:
Supplier Engagement Guide (Exponential Roadmap initiative) [EN]
1.5°C Business Playbook, 2023 (Exponential Roadmap Initiative) [EN]
Net-Zero Ambition Assessment Tool (Sustainability Advantage) [EN]
Net Zero Procurement Toolkit (Sustainability Advantage) [EN]
For larger companies:
Review the Implementation Resources on just transition. Start by identifying
which stakeholders your climate transition plan may affect
which stakeholders are most vulnerable to the effects of climate change.
Want to learn more about the other Impact Topics in B Lab's new standards?
🪧 Purpose & Stakeholder Governance
🪧 Government Affairs & Collective Action
🪧 Justice, Equity, Diversity & Inclusion (JEDI)
🪧 Environmental Stewardship & Circularity
¹ Net zero GHG emissions are achieved when anthropogenic CO2 emissions are balanced globally by anthropogenic CO2 removals over a specified period. (IPCC). ² Scope 1, 2, and 3 emissions: Scope 1 emissions are direct emissions from owned or controlled sources, including the combustion of fuels such as natural gas, diesel fuel, and gasoline in factories, fleets, and office buildings. Scope 2 emissions are indirect emissions from the generation of purchased energy (including electricity, heat, or steam). Scope 3 emissions: are all indirect emissions (not included in Scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions. These include, among others, the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the company (including employee travel and the handling and distribution of the company's products), outsourced activities, waste disposal, the use of your products by customers, etc. There are 15 types of Scope 3 emissions identified by the GHG Protocol Corporate Standard and detailed by the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard. (adapted from GHG Protocol Corporate Standard).
³ Just Transition: to tackle pressing environmental challenges like climate change, pollution, and plummeting biodiversity, nations and businesses need to transition towards greener, resilient, and climate-neutral economies and societies. A Just Transition means greening the economy in a way that is as fair and inclusive as possible to everyone concerned, creating decent work opportunities and leaving no one behind. (ILO).