There are a lot of tags and certifications associated with products and their companies. These are supposed to help the customers make their choice. One such certification is the B-Corp certification.
What is a B-Corp certification?
B-Corp certification is a 3rd party certification standard for companies that harness the power of their business to build a more inclusive and sustainable economy. This is a trademark for a company that meets validated performance, accountability, and transparency standards, from employee benefits and charitable contributions to supply chain practices. It also includes assessing and possibly changing some of the company’s methods related to social and environmental processes, such as the treatment of its employees, scrap material, etc. This is a highly selective status and companies must document their positive impact to qualify and be audited every 3 years to maintain their certification.
Who grants the B-Corp certification?
B Lab is a non-profit organization accrediting B Corporations. It supports companies through the creation of standards, guidelines, programs and tools to change the culture, behaviour and structural underpinnings of capitalism. Their goal is to shift our world economy from prioritizing individualism to complete interdependence.
What are the standards for this certification?
B Lab’s standards define the best social, environmental, and governance practices for businesses. The standards that define a certified B Corporation are-
- ACCOUNTABILITY- Directors are obliged to consider the impact of the company on all shareholders.
- TRANSPARENCY- Companies must have public records of their social and environmental performance evaluated by neutral, 3rd party standards.
- PERFORMANCE- They must have a minimum score on the B Impact assessment test and recertify every 3 years.
These standards are independently governed by the Standards Advisory Council and strengthened by the community of users and stakeholders. This panel brings diverse experience and expertise on topics related to the use and evaluation of business as a force for good.
What’s the difference between a certified B-Corp and a benefit corporation?
A certified B Corp company is one that meets the social and environmental impact criteria validated by the B Impact Assessment. A benefit corporation, on the other hand, is a legal structure that incorporates stakeholder governance into a company’s DNA and ensures that the company considers its impact on all stakeholders.
The benefit corporation is not a certification and is not required to meet B Lab’s standards. A company can be a Benefit Corporation but not a Certified B Corp and vice versa or both.
What are the benefits of B-Corp Certification?
- Helps in building the company’s credibility and amplifies the voices of all stakeholders.
- By maintaining B Corp certification through impact assessment, organizations can set improvement goals.
- If a company is certified, it can use the B Corp seal on a product, website, business cards, etc. to signify that the company is a verified leader. This attracts more customers and smart employees.
- The B Corp regulatory framework helps protect the company’s missions through capital augmentation and management changes. It also gives companies more flexibility in assessing potential sales and liquidity options.