3 steps to becoming a certified B Corp
B Corps, or Beneficial Corporations, are businesses that act in ways that benefit society as a whole. What defines them is their belief that the purpose of a company is not just profits, but also social and environmental good.
The movement of people using business as a force for good has exploded since B Corp certification was launched in 2006. More than 6,200 companies in 87 countries and 159 industries are now certified B Corps.
What is B Corp certification?
B Corp certification is a designation—based on a rigorous assessment—that indicates your business meets the highest standards in three areas:
- Social and environmental performance
Certification attests that B Corps “walk the talk” in a range of business areas, from employee benefits to ethical supply chains and charitable giving. The assessment process includes indicators and best practices that affect all stakeholders and encompass all aspects of a company’s operations and business model to arrive at a holistic view of its overall impact.
- Public transparency
Certified companies must post their impact reports on the B Lab website, which certifies B Corps. This builds public trust in companies’ claims about sustainability and other beneficial practices.
- Legal accountability
Certified B corps are legally required to consider the impact of their decisions on all stakeholders (a model known as stakeholder governance). This ensures that as B Corps grow and evolve, they remain legally accountable to workers, communities, customers, suppliers and the environment—not just shareholders.
The combination of these three pillars is what makes B Corp certification unique.
There are plenty of examples of Canadian B Corps. One is The Unscented Company, which offers a complete line of unscented home and body care products sold in refillable bottles. Another is Chandos, an employee-owned construction company that’s committed to becoming net zero by 2040.
What are the benefits of getting certified as a B Corp?
Michelle Reid, a BDC advisor, Corporate Sustainability and B Corp , says certification carries numerous benefits:
- A greater understanding of your potential
The assessment and certification process helps you clearly define your company’s impact.
- Improved operational performance
The need to recertify every three years promotes continuous improvement.
- Trust in your brand and increased credibility
This is a true perk given that today’s consumers are skeptical about “greenwashing” and likely to question claims.
- The opportunity to differentiate your business from industry competitors
Thanks to third-party verification, many B Corp companies become leaders in their industries.
- An improved ability to attract, engage and retain talent
Employees want to see their values reflected in the organizations they work for.
- A leg up in raising capital
Because B Corps are generally better managed than their peers, they are also lower risk for investors—making it easier for entrepreneurs to raise funds.
But in Reid’s view, as valuable as these benefits are, the biggest gains are made during the certification process. That’s because the program is designed to help companies understand how they can maximize impacts in every area of their company.
“The B Impact Assessment gives you holistic insight into your company, and most businesses get really excited about that,” says Reid.
Carla Heim, Senior Advisor, Sustainability at BDC, agrees that going through the certification process is valuable. “It requires taking a close look at how you run your business. It engages the entire workforce, gets them focused on what they do well and points out where you can improve.”
The B Corp assessment is comprehensive and somewhat daunting. A poorly managed company will not pass. As a result, B Corps tend to be highly successful and at the cutting edge of innovation, good governance and corporate citizenship.
These companies are just as profitable and resilient as traditional businesses. But they have advantages when it comes to brand differentiation and employee recruitment.
“Entrepreneurs who invest in their employees and their community are the ones who turn heads,” Heim says. “Employees want to work with them and consumers want to buy from them.”
How to get the B Corp certification?
Here are the three steps Heim says entrepreneurs can follow to become certified.
1. Believe in the power of business as a force for good
B Corp entrepreneurs are committed to a vision of business contributing to the public good. They believe that the purpose of a company is to create inclusive, environmentally sustainable prosperity.
They also believe in making money. This means non-profits and organizations that receive funding or grants from governments or charities aren’t eligible. On the other hand, neither are companies in certain industries, like oil and gas or mining—the assessment process tends to rule them out.
To become a B Corp, your business should have clear, specific social or environmental goals. It should also be managed in a transparent way and be accountable to stakeholders, including the local community.
2. Take the B Impact Assessment
If you think joining a movement of people trying to harness the power of business to make positive change in the world might be right for you, then the next step is to find out if your business is eligible for certification.
The B Impact Assessment measures your company’s economic, social and environmental impacts and is a key part of the certification process. The confidential assessment grades your company’s accountability and transparency, its impact on employees, the community and the environment, as well as the beneficial impact of its products or services.
It also allows you to benchmark your social and environmental performance against other companies. “It’s a really good health check for your business,” Heim says.
Completing the full B Corp assessment will give you access to a B Impact Report, which includes a score that rates your company’s performance as a social enterprise.
You can complete the B Impact Assessment as a free self-assessment. To be certified, businesses need to achieve a score of at least 80.
If you decide to pursue B Corp certification, you will then need to submit your results to B Lab for verification. Staff will go over the results, explain the certification fees, ask for supporting documentation and possibly arrange site visits.
3. Change your articles of incorporation
When you’re ready to formally join the movement, the next step is to change your company’s articles of incorporation to enshrine its commitment to a broader societal purpose.
This is the key tweak that differentiates B Corps from traditional companies. B Corps are required not only to create shareholder value, but also to account for the impact of their actions on other stakeholders.
Companies with 49 or fewer employees will need to make this change at the time of certification, while those with 50 or more employees have a year. This change helps preserve your legacy going forward and ensures that your corporate values are baked into the DNA of the business.
The B Corp certification process
- Understand the business case and legal requirements for B Corp certification.
- Create a team that will be responsible for shepherding the process.
- Complete the B Impact Assessment.
- Submit your application along with the submission fee.
- Complete the evaluation and verification process.
- Sign the B Corp Agreement and pay annual fees going forward.
Reid says that understanding the business case for certification is important. She also recommends understanding the legal requirements thoroughly before proceeding, because they can present barriers for certain companies. “You don’t want to dig in until you’ve figured that out.”
How long does B Corp certification take?
The time it takes to gather the necessary documentation and apply will vary according to a company’s size, age and complexity, says Reid, adding that it could be from a few hours for smaller companies to a few weeks for large ones.
“Everything will need to be verified, so you’ll need documentation to prove you have certain practices in place,” says Reid. Conversely, the process can sometimes take a bit longer for smaller organizations because they may be following policies that are not formally written down.
After the application is submitted, it can take up to seven months to be approved, depending on wait times.
How much does B Corp certification cost?
There is a nominal application fee of $150, though larger companies may incur extra costs for additional processes or requirements.
There are also ongoing post-certification costs. These are based on your company’s gross annual revenue, ranging from $2,000 a year for companies with annual sales under US$4.9 million to US$50,000 a year for companies with annual sales over US$750 million. B Lab may provide entrepreneurs who face systemic barriers with an equity discount.
Staying B Corp certified
Once you’re certified, the job is not done: You will want to regularly monitor your company’s performance. You’ll also need to recertify every three years. B Corp standards are always evolving, so you should be ready for any new requirements.
The next B Corp standards update, slated for 2024, is expected to contain more significant changes than usual, with a move away from the current minimum score toward a set of requirements in 10 different areas that define leadership on social, governance and environmental business impacts.
“The B Corp community is really amazing,” Heim says. “They meet regularly and are open to people who reach out. People collaborate to make things happen, because they believe in the same things and want to build a community. This is a movement of leaders and trailblazers; if you network with them, you’re certain to learn a lot.”
Find out more about B Corp certification
- Attend a BDC live workshop on B Corp certification or other business topics. Look for events and workshops, including Getting to 80.
- BDC is the B Corp movement’s national partner in Canada and presents the B Impact Assessment to thousands of business owners every year.
- Contact our sustainability team for more information.