by GK Strategy 24th July, 2019
3 min read

How to take advantage of the rise in B Corps

Four years since the launch of B Corps in the UK and many of the UK’s for-profit organisations are yet to join this global movement, which commits B Corp certified companies meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.

What is a B Corp?

To date there are 2, 788 B Corps across 150 industries in over 60 countries, including 199 here in the UK. The community of B Corp holders in Britain include footwear and accessories brand, Veja; petition website, Change.org; and drinks company, Innocent drinks.  And the movement has gone beyond its traditional ‘ethical consumer’ base to more mainstream businesses, including financial and business service companies.

B Corporation certification is awarded by B Lab, a non-profit organisation headquartered in the US, where B Corps have existed since 2007. The B Lab assesses a company’s entire social and environmental impact with a business needing to meet a minimum score against a number of social and environment ‘impact areas’.

The time is now

It is 2019. A commitment to sustainability, transparency and social issues is a top priority for many companies. From the Government’s pledge to reach zero net carbon emissions by 2050 to the single-use plastics debate moving from the periphery to dominating public debate, ethical issues are now an integral part of business.

B Corps certification allows companies to demonstrate a robust and independently verifiable commitment to sustainability, in an age where scepticism of ‘greenwashing’ is growing and it is easier for consumers and policymakers to call out companies that exaggerate their green credentials. GK’s Environmental, Social and Governance (ESG) service has seen a significant increase in the use of ESG updates in company reports, alongside an increase in ESG due diligence sought by the investment community.

As noted elsewhere, there is also a commercial imperative to being a responsible business. According to research from B Lab, B Corp certified business grew on average of 14% year on year, 28 times higher than the national economic average of 0.5%.

Equally, having B Corp status has been found to make companies more attractive to investors. Political uncertainty due to Brexit and a growing likelihood of a Labour government, are causing investors to be a lot more cautious in their investments, especially when considering diversifying their portfolios. B Corp status businesses require much less due diligence.

How to become a B Corp

The first step to achieving B Corp status is to have a genuine commitment to being an environmentally and socially responsible business; this means taking a forensic look at your organisation.  A business may already have ethical policies in place or be undertaking initiatives for a good cause but a rigorous ESG audit and gap analysis can pinpoint areas where standards can be improved. Once this is done a company is far more able to have a clear vision for how it will be responsible.

With foundations laid, a company should the start the formal B Corp process. Certification is assessed on key areas including Governance, Workers and Environment, with companies needing to score a minimum of 80 out of 200. This is done via an initial B Impact Assessment, assessed by B Lab, and is followed by a virtual meeting with B Lab staff to submit confidential documents to verify responses. If successful, certification if renewed every three years with an annual fee, dependent on revenue.

Missing ingredient

Becoming a B Corp can provide the missing ingredient and impetus to your organisation’s vision for purpose beyond profit. It provides a focus and robust approach to ESG and the development of a business overall.

It is not suitable for every business and there are many other ways of demonstrating a robust approach to ESG. But it has worked for thousands of companies across many different sectors. It now might be the time to seize that opportunity.

Find out more about our ESG services here.

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