Redefining What Good Business Actually Looks Like
In a moment of high demand for the B Corp movement, it’s necessary to root our work in standards, recognizing that growth isn’t impactful unless it comes with integrity.
Leadership, as defined in B Corp Certification, is about performance, not intent, which means that B Corp Certification is not designed to be easy or quick.
Certification doesn’t mean that a company is ‘perfect,’ however — and B Lab has various mechanisms in place to ensure that a company is meeting its ‘risk standards.’
Continuous improvement is necessary, and B Lab is continuing to explore the future of the B Corp Performance Requirements, including specific requirements on key topics to ensure that they are more clear, impactful, and responsive. We welcome your feedback as we continue this process.
It’s widely recognized at this point that businesses need to step up to address the compounding societal and ecological challenges that the world is facing. But in order to do that, and sift through the potential noise of impact-washing that could easily result, it’s necessary to codify what good business actually looks like in practice. Among other things, that is what B Corp Certification — and the work of the B Lab and Sistema B Global Network — aims to achieve.
As my colleague Kali shared last week, the past year has shown us unprecedented demand for B Corp Certification. While this is a good thing, the growing interest in our work has also unfortunately led to increased wait times for companies who are seeking certification, straining both the B Lab team and the movement as a whole. Expansion of the B Corp community has also led to controversy, with members of our community and the B Corp standards coming under further scrutiny and criticism. As a stakeholder-driven organization, B Lab is not only committed to listening to those affected by our work: we strive for continuous improvement, just as we expect continuous improvement from B Corps.
B Lab can, and must, evolve in order to ensure that B Corp Certification remains positioned to lead towards an inclusive, equitable, and regenerative economy. At the same time, we must hold true to certain core values and principles. The B Corp standards are intended to be what unifies the B Corp community: a tangible manifestation of the vision of the world we are trying to achieve; a mechanism to hold companies accountable; and the key to our credibility and integrity, which are essential to maintain and grow in order to achieve our collective ambition.
Leadership, as defined in B Corp Certification, is about performance, not intent. While B Corp Certification offers participation in a community of like-minded companies, the leadership of B Corp Certification is not just about a different mindset of doing business. It is about backing that mindset with specific and concrete actions, i.e. meeting the standards in a verifiable way. As a result, B Corp Certification is not designed to be easy or quick. The median score on the B Impact Assessment is 55, while B Corp Certification requires 80.
To be credible and meaningful, it takes time to ensure that a company meets the standards. Companies consistently have ‘inflated’ scores at the beginning of the verification process and have challenges providing the necessary verification of their practices. Independent of the need for improvements in our standards and verification processes, this ‘inflation,’ particularly in a period of high demand, leads to extra time in the process that has cascading effects for all businesses who are trying to certify. It also highlights the importance of diligence in the verification process itself to ensure that the companies that achieve the Certification are in fact meeting the standards.
At the same time, while B Corp Certification is difficult, and requires verified and concrete performance on the standards, it doesn’t mean that a company is ‘perfect.’ Companies are not expected to have every possible best practice, or even be free from mistakes.
That means, particularly as demand grows for the certification, the types of companies who will achieve the certification will continue to shift and evolve. That has included larger, more complex, and even more controversial companies. There are a number of specific mechanisms in place to ensure that these companies meet the comprehensive standards and expectations of the certification:
The ‘Risk Standards’ of B Corp Certification that all companies are required to comply with in addition to a minimum score on the B Impact Assessment — including the Disclosure Questionnaire in the B Impact Assessment to flag sensitive practices; the specific requirements (already) established for controversial issues and continuing to be developed; and the complaints mechanism for stakeholders to raise concerns about the conduct of members of the B Corp community,
Additional specific certification requirements for large multinational companies, and a designated MNC Standards Advisory Council composed of multi-stakeholder experts to apply them
Collectively, the B Corp standards are complex — because impact, and how to measure it, is complex. It is necessary to navigate complicated topics with nuance and thoughtfulness, to understand the varying perspectives of experts and stakeholders, and to recognize where stakeholders will disagree. And yet to achieve our vision of economic systems change, it is necessary to engage the broad range of companies that exist in and influence that system. The standards therefore need to be applied independently and impartially, and then continuously interrogated and improved.
Among other ongoing improvements, we are excited to have embarked on an extensive stakeholder engagement process to inform the possible future of our Certification requirements, designed to ensure that they are more clear, impactful, and responsive. Based on the input of more than 1,200 stakeholders over the last year (and with much more feedback and development to occur), we are now exploring specific requirements on key social, environmental, and governance topics in a way that can embrace more contextualization and acknowledge more interlinkages with other credible standards that share our version for a different, better way to do business.
With increasing demand for B Corp Certification, it’s necessary to keep an eye on the long term goal, all the while recognizing the urgency towards changing the world. Meeting demands alone won’t help us achieve our vision, and may undermine it if that growth doesn’t come with integrity and impact. ‘Quantity over quality’ is a symptom of white supremacist culture that is necessary for us to avoid, as B Lab continues the journey towards being an anti-racist organization. Among the ways that we can do that is to reinforce the importance of high performance standards as a necessary part of B Corp Certification and the B Corp movement.
Dan Osusky is Head of Standards & Insights at B Lab Global.