Complementary Impact Topics
B Lab’s standards define the performance that a company needs to manage and continuously improve upon to achieve and maintain B Corp Certification. Since 2006, they have been developed to improve their impactfulness and clarity around what it means to be a leading business and to incorporate feedback shared along the way.
In order to achieve these goals, the draft standards have departed from the current framework where companies have flexibility in how to achieve a verified 80-point score, and instead meet specific requirements across the standards’ Impact Topics. While the components of the draft standards have been developed with the existing standards in mind, you can expect to see new topics, designed to optimize and improve our certification processes. After all, the B Corp community is on a journey of continuous improvement.
While taking action on proposed Core Impact Topics sets a specific level of impact management commitment for all companies, the wider impact of a business is extensive. It is essential that companies identify broader repercussions of their business and improve upon them over time. The Complementary Impact Topics address these impacts, to support businesses in measuring and managing them whilst focussing on continuous improvement.
Luana Messena, Senior Standards Manager, shares why these holistic Complementary Impact Topics touch all stakeholders affected by a company’s own operations and value chain.
Running any business has an impact—positive and negative—touching on multiple topics and potential practices. Taking action on the Core Impact Topics proposed in the draft standards sets a level of performance for all B Corps, however, it is also essential that companies look at the bigger picture of how they affect the world and continuously strive to improve.
In essence, the Complementary Impact Topics make sure companies are identifying, measuring, learning, and improving on other important components of business impact beyond taking action on the Core Impact Topics such as Human Rights, Climate Action, or Fair Wages.
The Complementary Impact Topics cover diverse practices across Ethics & Transparency, Worker's Career Development, Health, Wellness & Safety, Civic Engagement & Giving, Economic Impact, Supply Chain Management, and Customer Stewardship (already within the current B Impact Assessment). They cover a broad array of assessments, including whether your company has appropriate anti-corruption practices, evaluating the potential to improve the existing policies that guarantee employees' career development and well-being, assessing the impact and value created for your customers, and so on. By maintaining Complementary Impact Topics in the evolved standards, we're making sure the B Corp Certification continues to cover a broad range of aspects of how businesses impact society and the environment.
The current standards for B Corp Certification within the B Impact Assessment offer a comprehensive set of questions that allow companies to learn, measure, manage, and improve a company's positive impact performance for workers, communities, customers, suppliers, and the environment. Users of the B Impact Assessment often express how enlightening and motivating it is to navigate the diverse best practices covered in the standards. This process sheds light on aspects they might not be aware of or typically focus on, leading to a more comprehensive understanding of impact and better management practices.
Throughout the development process of the draft standards, the idea of setting specific requirements on Core Impact Topics became clear, while maintaining the holistic approach of the B Corp Certification approach and the educative role of the B Impact Assessment content.
The proposal in the draft of the standards is to keep those topics currently within the B Impact Assessment that aren't directly or fully addressed by the Core Impact Topics as part of the Complementary Impact Topics. Companies would still measure their impact in these areas and make progress based on improvement goals, tailored to their unique context and operations.
Some stakeholders may have concerns about how flexible the standards are when it comes to goal-setting. As proposed in the drafts, different companies could have varying levels of ambition. The decision to let companies determine their goals and ambitions is a deliberate move to strike a balance in the overall framework. As the requirements become more specific and prescriptive on the Core Impact Topics, these Complementary Impact Topics will drive achievable improvements, allowing each company to adjust the level of ambition to its context and conditions. Getting goals approved at the highest governance level and transparently disclosing them in the B Corp Public Profile are mechanisms that promote accountability to both commitments and results directly from the company's stakeholders.
Another potential criticism is that Complementary Impact Topics might not cover all the areas of potential impact creation. It's important to highlight that the evolving standards are already introducing new topics and areas for B Corps to address beyond the actions already taken to meet the existing performance requirements in the B Impact Assessment. To manage the scope and support B Corps in gradually adopting the evolved standards, Complementary Impact Topics are limited to those already part of the B Impact Assessment and not covered by the Core Impact Topics’ requirements. Over the coming years, as the standards continue to evolve, new and relevant topics may be added to the scope of Complementary Impact Topics.
Lastly, due to the comprehensive and management-oriented approach of the Circularity & Environmental Stewardship and Climate Action topics, these core-specific requirements directly or indirectly cover most existing environmental themes in the B Impact Assessment. As a result, Complementary Impact Topics focus more on governance and social aspects.
Taking action on the other Impact Topics will allow B Corps to achieve a high level of social, environmental, and governance performance. Yet, for leading businesses like B Corps to truly excel, it's crucial that they actively measure and manage a wider range of impact areas.
The second consultation will run from 16 January 2024 to 26 March 2024.
B Corps comprehensively identify and measure the impacts of their business and improve upon them over time.
Previously called Impact Management, the topic was revamped and renamed to concentrate specifically on the assessment and management of Complementary Impact Topics.
Another significant change is that the requirements will apply to all types of companies, including companies with Impact Business Models that were exempt from these requirements in the earlier draft. Noting, that the approach for recognition of Impact Business Models was significantly reviewed, influenced by the feedback from stakeholders in the last consultation, and an updated proposal will be presented during the second consultation.
All companies are required to measure their impact against the Complementary Impact Topics. However, the standards that each company will interact with are different, as the B Impact Assessment is appropriately tailored to the size, sector/industry, and location of a company.
All companies are required to take action, set improvement goals for the most material themes, and disclose both their goals and progress. The expectation is higher for larger companies, which need to commit/progress on five goals, while medium and small companies need to commit/progress on two goals every certification cycle. This adjustment in the number of goals reflects a response to concerns from small companies regarding the overall effort required to meet these requirements.
The Complementary Impact Topics cover a diverse range of practices—Ethics & Transparency, Worker's Career Development, Health, Wellness & Safety, Civic Engagement & Giving, Economic Impact, Supply Chain Management, and Customer Stewardship—that are part of the B Impact Assessment but are not directly or conceptually covered by the proposed Core Impact Topics. For example, for Worker's Career Development companies can assess against best practices on professional development and training offered. Within Economic Impact, there are practices about how a company supports its local community, while in Civic Engagement & Giving, they can evaluate the extent of community investments and donations.
If you are a B Corp, you're already ahead on this topic! You are already measuring your impact against all the Complementary Impact Topics. So it is important to keep monitoring these impacts annually or, at the minimum, every 3 years (each certification cycle) and ensure your systems have credible evidence and updated data sources. Businesses looking to become B Corp Certified need not worry either; the current B Impact Assessment questions will allow you to begin to measure and monitor your company's impacts in these areas.
Existing B Corps are incentivized to continuously improve their impact, so you might already be setting improvement goals using the Goal Functionality in the B Impact Assessment or through your management systems. Regardless of whether you are an existing B Corp or not, to fully comply with the new proposed requirements, the complementary impact goals set would need to be approved by the highest governing body(1), and the company would need to publicly commit and share its progress against to these goals. To kickstart your efforts, preparing both the governing body and the organization for these commitments is a strategic first step, as well as understanding how to align the prioritization of goals with impact materiality.
(1) Highest governing body: Person or group of people who have ultimate accountability for the whole organization. Every organizational entity has one highest governing body, whether or not it is explicitly established. When the organization is not an organizational entity, the term governing group is applicable where “highest governing body” is used throughout this document. A highest governing body can be explicitly established in a number of formats including, but not limited to, a board of directors, supervisory board, sole director, joint and several directors, or trustees. ISO management system standards refer to the term “top management” to describe a role that, depending on the standard and organizational context, reports to, and is held accountable by, the highest governing body. (Adapted from ISO37000)
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