B Lab to develop new standards and B Corp Certification requirements for the financial services industry
Update on the timeline: While the timelines for implementation of the new standards included in this blog were accurate at the time of publishing, these are subject to change. B Lab continues to develop the rollout and transition timeline for the new standards, including improved digital experiences and certification processes. You can register your interest to provide feedback in the upcoming second consultation here.
B Lab will launch a project to develop new standards for companies in the financial services industry, including updated performance requirements that companies seeking B Corp Certification must meet in order to certify.
For the duration of this project, B Lab is placing a moratorium on new B Corp Certifications for financial services companies with greater than $1B in revenues, effective immediately. These companies can engage with the existing standards via the B Impact Assessment as well as B Lab’s other programs for companies, like the B Movement Builders program.
Financial services companies with less than $1B in revenue will undergo B Lab’s normal risk assessment and verification process to determine if they are eligible for B Corp Certification, but may also be subject to wait for the new standards. All existing B Corps in the financial services industry will be eligible to undergo their normal recertification process while the new standards are in development.
As part of the ongoing improvement of B Lab’s standards, and in recognition of the important role that standards play in supporting companies and holding them accountable to stakeholders, B Lab is pleased to announce plans to update our standards for the financial services sector. This work will involve developing a new set of standards for Certified B Corporations in the financial services industry, as well as provide a framework for any financial services company and their stakeholders to measure, benchmark, and manage their impact performance.
Why the financial services industry is critical to B Lab’s mission
The global financial system and the companies that compose it play a unique and essential role in the global economy and its social and environmental impacts. From managing systemic risks, to stewarding capital towards or away from both positive and negative impact companies, to supporting the financial well-being of their individual customers — these companies have considerable power over the well-being of people, communities, and the planet.
It is increasingly challenging to assess the impacts of financial services companies, hold them accountable, and to differentiate good companies, especially during this time of rapid innovation and increased complexity in financial markets. All the while social movements, ranging from Occupy Wall Street to Extinction Rebellion, have challenged these companies' social license to operate and demanded changes to both individual companies and the system. Notions of ESG and impact investing have also been challenged as potential havens for greenwashing.
“The financial sector has a leading role to play in the transition to a sustainable and socially inclusive society. All financial decisions have impact, and it’s up to the financial industry to ensure that this impact is positive,” said Thomas van Craen, member of B Lab’s Standards Advisory Council and Managing Director at Triodos Bank Belgium, a Certified B Corp. “As a result, the engagement of the industry is necessary to achieve B Lab’s mission of transforming global economic system, and to do so meaningfully requires clear and ambitious standards to define what good practices across the sector look like, as well as practical impact management tools and other engagement mechanisms to help businesses achieve them.”
B Lab’s plans for developing and implementing the new standards
Building off of and collaborating with existing frameworks and standards for financial services companies, B Lab will undertake a multi-stakeholder development project, including the convening of expert working groups, to develop a specific set of performance standards for B Corp Certification and the B Impact Assessment. The project is expected to begin in 2023, with implementation of the new standards beginning in 2024.
“B Lab’s existing standards for the financial services industry were initially developed in 2008 via an expert working group,” said Dan Osusky, Head of Standards & Insights at B Lab Global. “With the ongoing evolution of this industry, evolving expectations from stakeholders and industry best practices, and the growing recognition of urgent and widespread need for improved action on social and environmental issues, it’s necessary to update our standards to ensure that the B Corp Certification and B Impact Assessment continue to be mechanisms to determine authentic leadership in the space, aligned with the goal of achieving an inclusive, equitable, and regenerative economy.”
While the new standards are in development, B Lab is placing a moratorium on new B Corp Certifications for financial services companies with greater than $1B in revenue. Companies will still be able to engage with the existing standards via the B Impact Assessment as well as B Lab’s other programs for companies, such as the B Movement Builders program. All existing B Corps in the financial services industry will be eligible to undergo their normal recertification process while the new standards are in development. Financial services companies with less than $1B in revenue will undergo B Lab’s normal risk assessment and verification process to determine if they are eligible for B Corp Certification, but may also be subject to wait for the new standards.
B Lab invites all interested stakeholders to provide input on the project, either via participation in a working group, testing, and/or public comment. To signal your interest to receive updates or provide direct input on the project, please complete our intake form.
For additional details about the project, including the project deliverables, scope, and timeline, download the Project Overview.