In our last article, we discussed why B Corp certification would help your company in its ESG strategy. This article elaborates on the actual process of getting certified, digging deeper into the requirements that B Lab needs to give your company the seal of approval.
As of May 2022, there are 5000 B Corps worldwide, and numbers are constantly growing. If your company wants to be part of the movement, you’ll need to know exactly what steps to take in order to become B Corp certified. Here’s how.
How Does the B Impact Assessment Work?
One requirement to achieve B Corp certification is passing The B Impact Assessment (BIA). With more than 200,000 businesses using BIA to date to measure their impact, companies are more than ever interested in achieving exceptionally high standards in social and environmental impact.
BIA is a tool that safely and confidentially measures your company’s impact in several areas, including Governance, Workers, Environment, Community and Customers.
Remarkably, it is the only tool that measures a company’s entire operation in a holistic manner, evaluating areas such as employee engagement to rating their carbon footprint.
To pass the assessment, you need to:
- Reach a score of at least 80 out of a minimum of 200
There are typically 200 questions to answer in the assessment unless it is a large organisation, in which case there will most likely be more questions as part of the rigorous process.
Companies need to answer questions from each of the five impact areas. Example questions can be:
- Does your company monitor and record its universal waste production?
- What % of the company is owned by full-time workers (excluding founders/executives)?
- How do you verify that your product improves the impact of your client organisations?
What are The Legal Requirements for B Corp Certification?
As Maanch and other B Corp companies can attest to, there are several legal requirements B Lab needs in order for your company to become B Corp.
However, because countries from around the world can become a B Corp, there may be slightly different requirements to adhere to as per your country’s laws. You can find out the best legal pathway to take for your company here to start your B Corp certification journey.
One road to B Corp certification is to update your company’s Articles of Association. According to B Lab, this is a legal requirement to ensure the company is embedding a structural change in the organisation, ensuring all the stakeholders have a say throughout the entire company.
The change will usually mean amending 2 clauses of your Articles of Associations to fit with B Lab’s mission statement and vision. Click the document here to see the legal language necessary for B Corps in the UK to include in your Articles of Association.
Before finally sending over your documents and forms to Companies House, another requirement to achieve B Corp certification is getting approval from your Board of Directors to approve the legal changes.
This can be done either in a meeting or in writing to reach a resolution by embedding all shareholders in the legal framework of your company. Once reaching a legal agreement with your company’s Board, you can then submit your documents to Companies House within 15 days of passing the special resolutions.
It’s important to note however, that if your company has fewer than 50 employees then your company needs to meet these legal requirements before finalising the B Corp certification journey. If your company has more than 50, the process will be more complex and therefore longer to ensure every avenue of your organisation is taken into account.
What Are the Next Steps?
As said throughout this article, the entire process of applying for and reaching B Corp certification depends on the size and structure of your company. This process can take anywhere between 6-8 for small-medium-sized companies, whereas for larger companies it could take up to a year.
The reason being is because of the last step – the verification. It is very rare that companies reach a score of 80 in their BIA on the first try. As a result, companies should try to push beyond the 80 score mark because, during the verification phase, scores will most likely drop due to overestimating their performance.
Once completed, you will simply have to wait until B Lab finally certifies your company as a B Corp. Don’t get too comfortable, however – every 3 years you will have to apply for recertification as a way to not only make sure your company stays on track, but continually improves your sustainability performance.
To sum up, to achieve B Corp certification your company needs to
- Be a for-profit business that has been in operation for at least 12 months (B Lab focuses on for-profit businesses because nonprofits are inherently focused more on the planet than on profits)
- Submit your B Impact Assessment with more than 80 points
- Change the articles of association to meet the legal requirements
- Pay an annual fee (the fee takes into account your total revenue with fee bands to make the certification process affordable for all companies. Click here to find out your specific pricing bracket)
If you need expert advice and further guidance on how to reach B Corp requirements, Maanch is the place to go.
Here at Maanch we supply companies with tailored improvement plans so that you can reach your goals the first time – helping you save plenty of time and money.
Contact us here for consultancy and advisory services to achieve B Corp certification for your company.