B Corp status is often called the Fairtrade of business. It is the latest certification socially-minded companies in Britain are trying to achieve.
Since it first launched in the US in 2007, more than 4,000 companies have achieved B Corp status from Patagonia to Ben & Jerry’s.
The non-profit B Lab is behind the B Corp Certification. It has a strong US profile and then launched its UK arm.
Royalty: The Queen’s bank Coutts is one of the most prominent companies to be granted B Corp status
It has quietly certified more than 500 British businesses since then, including Coutts, the Queen’s bank earlier in the year.
This is due to more corporations becoming B Corps, and businesses becoming more conscious of their environmental, social, and corporate governance practices (ESG), this number will likely rise in the future.
But could this rapid rise of B Corps threaten to compromise the integrity and validity of the certification?
Chris Turner, B Corp UK boss, tells This is Money about why more and more companies want B Corp status and whether it’s now merely a PR exercise.
What is the B Corp process?
Despite the existence of hundreds of B Corps across the UK, certification seems rigorous.
As part of our B Corp Beat series, we spoke to companies about the long time it takes to be certified.
Businesses must achieve a minimum score of 80 out 200 in five areas that have the most impact on their business: Governance, Community and Workers, Environment and Customers.
The website is opaque beyond that and Turner admits it is difficult to use.
“We shouldn’t call this an assessment. It makes it sound like you’re sitting down at your A Levels. You fill it out, and it goes. Then you get your result. It’s not how it works.
It’s more than a tool. Any business can create an account, start filling out an assessment, see their score… it’s their own assessment to update and change, see their score, for as long as they like.’
Once a business has met the 80 point threshold, they are eligible to submit an application for independent verification.
The review process requires businesses to recertify every three years in order to maintain compliance with the standard.
According to Turner, not one UK company lost its B Corp status during the review.
It’s not easy to become a B Corp. Therefore, businesses must believe in the goals they are trying to achieve.
Turner says that it is very unusual for businesses to go through all that work and then to stop because they get so much value from it.
What companies are B Corps members?
After years of experience in international development policy and policy, Turner joined B Lab in 2019. There were only 150 B Corps in the UK when Turner joined B Lab. Now, there are more that 500.
Turner predicts that there could be 150 B Corps by the end 2019 in the UK.
Turner explains that the pandemic has partly contributed to the sharp increase in B Corp certification applications.
But it also reflects a wider sea change in society and a greater focus not only on climate change, but also on social good.
“This is the way we’re going, this is the direction in which our society and economy are heading.
“If you look at the whole picture, you will see that consumers demand a purpose-driven company. On the other hand, employees are demanding that the business where they work be clear about their values. They are as driven as anything else.
‘B Corp provides a way for them do it their own way.
Although consumer demand is an important factor in companies seeking B Corp status. Only 33% of B Corps sell products directly.
The vast majority of them are business-to–business services businesses.
“In the early years of B Corp, there were many impact investors in the UK. But over time, there have been many mainstream investors.” [and companies].
‘That shift is something you can chart… and it means we’re now getting far greater numbers interested in certifying.’
As heavyweights like Mishcon de Reya, Queen’s bank Coutts, and Mishcon de Reya City law firm Mishcon de Reya use social media to show off their B Corp status it is likely that more professional service companies will follow their lead.
Defiant UK boss Chris Turner says certification can take a lot of work and time.
Is the B Corp badge at risk of being diluted?
Turner and his team have made it possible for over 500 B Corps to be established in Britain. But, a cynic might suggest that too many companies bearing the badge could diminish its value.
Turner stated, “We certainly want this to be our new normal.” Our overarching mission is that we want to see an economic system that is equitable, just and regenerative… Business plays a hugely important role [in that].
“We are not saying that every company must become a B Corp in order to achieve this, but that’s not the point. It’s about proving that doing good business in a purposeful way and with impact is good business.
However, could this slow growth of B Corps in the UK undermine its progress?
As more companies become aware of consumer demand for green and better companies, they might see the B Corp badge in a positive PR move.
“When you have big names such as Coutts in particular sectors certifying, you create a bit a race to be the top and you’ll start to see a wave interest.”
Turner says that the recertifying procedure ensures that there are strong standards.
“If certification was a PR exercise, it wouldn’t be possible because of the time and effort required to do so.
“If you thought that I’m going to get great headlines and responses, then you’d quickly become discouraged by the amount of work you have to do.
“But, I don’t think it’s possible to argue with the fact B Corp is a great PR instrument for businesses to claim they are a B Corp. It carries a lot weight and credibility.
“It’s fine to use it as a PR exercise, provided it has the backing of being really solid and credible as a certification.