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What it means to become a B Corporation

Author: ICAEW Insights

Published: 20 Feb 2023

You may have heard a lot about the B Corp stamp. But what does it signify, how do you earn it – and how can it help accountants?

Among the badges companies can earn to signal their environmental, social and governance (ESG) credentials, the B Corporation – or ‘B Corp’ – stamp is arguably the most prestigious.

Launched in the US in 2006, the B Corp movement set out to inspire businesses to adopt or hone behaviours that would yield positive social and environmental impacts. Now overseen by global certification body B Lab, the movement continues to anoint companies that are eager to enfold ESG ethics within their operational DNA.

Some of the best-known B Corps include crowdfunding giant Kickstarter, ice cream maker Ben & Jerry’s and clothing brand Patagonia.

Currently numbering more than 6,000 businesses, the B Corp movement is a broad church that welcomes any company willing to step up to meet its exacting evaluation. And that includes accountancy firms.

Natural step

“We’d been working for several years to ensure we created a diverse, inclusive place to work where everyone’s voice can be heard,” says Simon Bussell, Marketing and Business Development Director at London-based chartered accountants BKL. “In that time, we’d embedded diversity and inclusion (D&I) practices deeply into our systems to build a culture of innovation and creative ideas. Plus, we’d set up the BKL Foundation, which allocates a percentage of our profits to charity. So, as part of our ongoing efforts to make a positive impact through our business, B Corp felt like a natural next step for us.”

At the end of the first COVID-19 lockdown in 2020, Bussell and three of the firm’s partners – including ESG partner Myfanwy Neville – sat down to brainstorm ideas of where it wanted to be in five years’ time. The discussion quickly turned to how BKL could amplify the efforts it had already undertaken to be ‘a Good business, with a capital G’. “We saw B Corp as a means of providing us with an initial framework for what matters – and a tangible measure of where we were in relation to that,” Bussell says.

In July 2021, with its D&I achievements as a foundation, BKL embarked upon B Lab’s scrupulous certification pathway – a process Bussell describes as “robust and insightful”. An initial online questionnaire consisting of 150 questions led to another of 100 or so. “The questioning delves deeper and deeper into how you work and the impact you make,” Bussell notes. “So: ‘You’ve said you do X with your people – can you tell us more about that?’ You must also answer a disclosure questionnaire.”

In the next stage, B Lab assigned BKL a specialist to examine the firm’s policies, procedures and structures. Then came a thorough analysis – the real heart of the process – that required the firm to provide hard evidence of its efforts relating to D&I and people.

“At the questionnaire stage,” Bussell explains, “we’d said that we were working with a social mobility charity to represent underserved populations. So we had to provide data around that – including figures about our employees’ backgrounds, age range and salaries.”

In the final stage, a two-hour phone call between BKL and a designated, third-party verifier combed through and rubber-stamped every piece of evidence the firm had submitted. “The whole certification process took 14 months,” Bussell says. “We passed first time, with a score of 83.6 points, and were awarded a very rare Impact Business Model for our work with people.”

A higher bar

Not every B Corp applicant is immediately successful in gaining accreditation – B Lab’s stringent certification rules require companies to make governance-enhancing, structural changes before they can be approved. However, BKL had given itself a head start. “If we hadn’t already put so much work into how we support and develop our people and create an inclusive environment where everyone has a voice, I don’t think we’d have done as well as we did.”

B Lab’s initial application fee is £250. Successful companies must then pay an annual certification fee determined by turnover. BKL plans to achieve ROI by continuing to embed elements of its impact assessment deeper into its working practices – an aim intrinsically linked with the cachet and long-term benefits of the B Corp stamp.

“Part of threading an ESG approach through every aspect of the business involves helping clients with their own responsibilities and questions, plus helping other firms and our people,” Bussell says. “It’s about using our standing as a business in the market we’re in to share what we’ve learned and keep doing more.”

In addition, he notes: “We’re already finding that potential employees are interested in and excited to know more about our B Corp status. On the commercial side, meanwhile, we’ve noticed that it’s opened doors to opportunities we wouldn’t otherwise have had from our existing client base – as well as from external clients coming to us independently.”

Mindful of all those advantages, BKL is committed to recertification, which takes place every three years and requires companies to evidence continuous improvement. “B Lab is looking to update its certification process to set greater accountability around areas such as supply chains and stakeholders,” Bussell notes. 

“One big question in the B Corp community of late has been, ‘Are these changes going to rule out some larger businesses from recertification?’ Even we have had to ask ourselves what’s possible. It will stretch us – but we’re committed to achieving that higher bar.”

Comprehensive framework

So which sectors are showing particular interest in becoming B Corps?

“It really varies,” says B Lab UK Customer Success Coordinator Joanna Adjetey. “Leaders from all sorts of industries get in touch – often following competitors’ certifications and/or large advertising campaigns. For example, the B Corp Intrepid Travel had a huge campaign in 2022, which led to an increase in tourism companies reaching out to us. Plus, the launch of the B Corp Beauty Coalition in January last year resulted in more beauty companies wanting to find out about certification.”

Adjetey also sees interest from manufacturing and carbon-heavy industries – and says that more and more consumer-goods companies are considering the pathway, thanks to retailers such as WH Smith and Whole Foods championing B Corp-certified products.

Reasons that new applicants typically cite for wanting to become B Corps fall in line with B Lab’s own research, which shows that certification is an increasingly important topic in job interviews. “I’ve heard from both certified and aspiring B Corps that jobseekers are actively looking for B Corps to work for,” Adjetey says, “and will question companies on whether they are planning to go for certification.”

Businesses are also aware that consumers increasingly care about sustainability credentials, and there is a broad consensus that B Lab provides the most comprehensive framework for verifying them. But away from competitive gains, Adjetey notes, there are applicants who are simply sold on B Corp’s values and wider mission. “They want to be an active part of the movement to change the UK economy and use their business as a force for good.”

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