For those unfamiliar, B Corp is a certification that signals a company is committed to benefiting all stakeholders, not just shareholders. Nearly 10,000 companies across 100 countries are currently certified.
B Lab, the non-profit behind the certification, recently introduced the most significant changes to the standards in its history. This article outlines some of the major changes and implications.
What Has Changed
B Corps will now be all-rounders. Previously, companies needed a minimum score on the B Impact Assessment and could compensate for poor performance in one area by overachieving in another. The new model is a pass/fail system, requiring companies to meet minimum standards across seven topic areas, as well as foundational requirements.
Becoming a B Corp is now a five-year journey. The new standards include 172 sub-requirements, 20-124 of which must be met, depending on company size, sector, and geography. These are phased in over five years:
~60% at initial certification
~30% by year three
Remaining ~10% by year five
What It Means
Certification will be harder to achieve, particularly for larger companies. The changes reflect B Lab's mission to transform the economic system and is at least in part a response to criticism that it has been too easy for some large, multinational organisation to achieve B Corp status.
If you have customers in certain industries, you may no longer be eligible. B Corp's naughty list includes fossil fuel production, gambling, pornography, prisons, tobacco and weapons. If 1% of your revenue comes from helping clients in those industries make money or look good, or 1% of your assets under management are invested in them, then you won't be eligible for B Corp certification.
Strong climate action is required. The bar varies by size and sector but, in general, companies will need to:
Measure Scope 1, 2, and 3 emissions annually
Set science-based emissions reduction targets
Develop and implement a plan to meet them
Smaller firms can publish a lighter-touch climate action plan while large firms must publish detailed transition plans with Just Transition elements. The very largest will also need to publicly advocate achieving net zero by 2050.
What's Next
The new standards will be phased in over the next 6 months:
Existing B Corps with 2025 recertification dates can apply under current standards if they submit by 30 June 2025
Those with 2026 recertification dates will get a 12-month extension
All new applicants must use the new standards from 2026
Further refinements are expected in the coming years. B Lab plans to evaluate implementation of the new standards and explore how to recognise companies that are designed to deliver specific positive outcomes.