A new set of tougher standards for B Corp certification 

B Lab UK, the verifying body for B Corp certification, has announced a new set of tougher standards, which could make it more difficult for businesses to become and remain certified.

The upcoming year will see the implementation of new rules that require larger businesses to demonstrate responsible lobbying practices towards policymakers, eg purchasing electricity exclusively from renewable sources. In addition, proposals are under consideration that would mandate companies seeking B Corp status make the long-term wellbeing of their employees, suppliers, and local communities a top priority before they engage in share buybacks and dividend distributions.

Small businesses will be expected to provide evidence of how they have engaged their stakeholders in key strategic decisions. Businesses will also be required to evidence how they monitor their suppliers on aspects such as human rights, going beyond accepting their word for it.

B Lab UK has also announced its plans to scrap its ‘scoring system’, the B Impact Assessment, moving away from awarding businesses with accreditation if they score at least 80 out of 200 against its current ‘five pillars’. Currently, organisations can score more points in some areas and less in others and still be eligible for certification. B Lab UK has called the assessment a ‘flexible scoring mechanism’ and with the new standards in place, there will be a ‘fixed’ approach to certification.

Businesses will now be expected to meet a minimum requirement against a revised set of nine core topics which range from human rights to workplace culture and fair wages.

B Corp’s proposed new performance requirements

• Complementary impact topics
• Purpose and stakeholder governance
• Fair wages
• Workplace culture
• Justice, equity, diversity and inclusion
• Human rights
• Climate action
• Environmental stewardship and circularity
• Government affairs and collective action

To ensure businesses are meeting the new standards, B Lab UK is preparing more guidance on how businesses can engage their key stakeholders in the assessment process. Once these changes are adopted, all 1,500 UK-based businesses that are already accredited will be affected when it is time to renew their status, which happens every three years.

B Lab UK has said that it will be running a consultation on the proposed changes until 26 March 2024.

Commenting on the proposed requirement changes, Callum Giliker, Associate in our Corporate team, said:

It is not surprising that B Corp is keen to continue to evolve its requirements for proving performance given the increasing popularity of the scheme, as each prospective perceived ‘failure’ by a member would call into question – and perhaps dilute the reputation – of the scheme itself. This does mean that existing or prospective members will need to continue to evaluate their own targets and the potential cost of compliance going forward. For some, the calculus may shift and B Corp status will become less of a priority, or less workable. For others who remain committed, the effect may be that the B Corp status itself will be of greater reputational value.