B Labs, the company that dishes out B Corp certification for businesses, has tightened its rules following accusations in some parts of facilitating greenwashing.
Previously, B Labs assessed the worthiness of a business on a points-based approach across a range of criteria. Businesses had been required to score 80 points out of a possible 200, meaning that they could perform brilliantly in some areas and be found wanting in others.
For instance, US-based natural soap brand Dr. Bronners publicly dropped its B Corp certification earlier this year, despite being the highest-scoring business in the country and holding the certification for a decade.
“The increasing certification of multinationals including Unilever Australia and Nespresso in 2022 followed by Nestle Health Sciences in 2023 demonstrated that B Lab is not committed to protecting the integrity of the B Corp Certification and movement, nor ensuring that the certification won’t be used to mislead consumers,” wrote David and Michael Bronner, CEO and President of Dr. Bronner’s.
“Dr. Bronner’s has long advocated to B Lab that certified companies, especially large multinationals, should be required to certify all major supply chains to credible eco-social certifications in order to be part of the Certified B Corp community. This requirement would prevent companies, who have the resources and ability to certify all their major supply chains yet choose not to do so at all or only in part, from pursuing B Corp Certification for marketing purposes.”
There was also significant controversy last year when Havas spectacularly lost its B Corp certification after winning Shell’s B2B media account the year prior. There are around 80 B Corp certified businesses operating in the advertising, marketing and media spaces in Australia including Cocogun, Compass Studio, Dig, Paper Moose and Think HQ.
Now, B Labs appears to have taken some of that criticism on board. To become certified, businesses must now meet criteria across seven critical Impact Topics and instead of the cumulative point scoring. B Labs hopes this will mandate business to view their impact holistically while increasing transparency and clarity for the public.
The criteria are:
- Purpose & Stakeholder Governance: Act in accordance with a defined purpose and embed stakeholder governance in decision-making, creating governance structures to monitor purpose, social, and environmental performance.
- Climate Action: Develop an action plan to support limiting global warming to 1.5°C, and, for larger companies, include GHG emissions and validated science-based targets.
- Human Rights: Understand how their operations and value chain may involve negative human rights impacts and take action to prevent and mitigate negative impacts.
- Fair Work: Provide good quality jobs and have positive workplace cultures, implement fair wage practices, and incorporate worker feedback in decision-making.
- Environmental Stewardship & Circularity: Assess their environmental impacts and take meaningful action to minimise them in their operations and value chain.
- Justice, Equity, Diversity & Inclusion: Foster inclusive and diverse workplaces, and contribute meaningfully to just and equitable communities.
- Government Affairs & Collective Action: Engage in collective efforts to drive systemic change, advocate for policies that create positive social and environmental outcomes, and, for the largest companies, publicly share their country-by-country tax reports.
Businesses must also demonstrate impact improvement over time, including milestones after three and five years.
“For the last 20 years B Corps have been leaders globally in demonstrating you can be sustainable, ethical and profitable,” says Andrew Davies, CEO of B Lab AANZ.
“The new standards are more than an update, they mark a complete reimagining of business impact to meet the challenges of our time. After four years, two public consultations, and more than 26,000 pieces of feedback from businesses, the public, and experts, we’re confident that the new standards are clear, ambitious, and capable of raising the bar for businesses worldwide.”
“B Lab’s standards provide a powerful framework to model what good business looks like, offering a comprehensive blueprint for companies to transform the global economy that prioritises people and planet, alongside profit. At their core, the new standards support businesses to measure what matters and accelerate the positive change our world needs now more than ever.”stil
