CERTIFICATION , CHANGES , AND THE W ORLD OF

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As the world of business has become more concerned with administering itself according to the principles of environmental, social, and governance (ESG) criteria, so has B Corporation (B Corp) certification become one of the leading ways in which companies can show that they are in compliance.

What is B Corp certification? In a few words, it is the most shockproof, standardised certification that a company can get to prove to customers, investors and employees that it abides by goals embedded in ESG standards –or, in the words of one advisor, that a company is “running a tidy shop and leaving no stone unturned”. Thoroughness is the name of the game, and it seeks to be a force against the tide of lip service and greenwashing.

First, a bit of backstory: B Corp certification is designed for for-profit companies and is administered by B Lab, a globe-spanning non-profit that has offices in the US, Canada, Europe, Australia, and New Zealand, as well as a partnership with Sistema B in Latin America; note, too, that it is distinct from the legal term ‘benefit corporation’, which is also often shortened to ‘B Corp’. To achieve the certification, companies are rated on a number of metrics – the five core three years.

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Growth for B Corp certification has been brisk: since being founded in 2006, there are 5,697 certified corporations in 185 industries and across 85 countries (as of September 2022).

A noble cause, certainly, and one that’s also looking to be an enduring facet of the business landscape. But what does it actually entail? How must companies adapt their operations in order to become B Corp certified?

One commentator points out that there is a certain type of company that is more they spend a lot of time going back and formalising their processes before they can certify, or may not score as highly as they hoped.”

Still, he maintains that achieving B Corp certification is an end worthy unto itself: “The act of going through the certification process is hugely beneficial in itself. The assessment is essentially a benchmarking tool that has been crowdsourced from some of the leading responsible businesses over the last 15 years. It’s like selfguided consultancy. It gives you a pretty comprehensive picture of all the things that every responsible company should be thinking about, and then tells you how you are performing compared to others/ best practice - this is hugely valuable.”

The process, though, is not without its drawbacks. Arowana is an Australia-based investment firm specialising in electric vehicles and sustainability that can boast B Corp certification. I asked Benn Lim, the group’s chief operating and impact officer, about the limitations with which certification might be fraught. He points to the fact it’s time and resource intensive as well as the bottlenecks that have become more common as certification has become increasingly popular. Lim notes the limitations on operations: “Undertaking the B Impact assessment requires a company to commit time and resources – the return on invested time is not immediately evident. Furthermore, attaining B Corp certification is a deep-rooted change in management process that requires stakeholder management and buy-in at all levels within an organisation.”

Speaking on the inherent bottlenecks, he mentions that Arowana’s certification was delayed by twelve months, “because of the sheer volume of new companies on top of those recertifying with B Lab.”

Despite this, there is no doubt in his mind that it was worth the effort:

“Securing and retaining B Corp status has undoubtedly made us more competitive.

“What has been particularly noticeable is the increasing number and quality of unsolicited inbound requests for engagement, from talent that wants to work for us to companies that specifically seek out investment from us over other investment firms, as well as capital seeking to co-invest with us.”

WRITTEN BY: HELEN ADAMS

PRODUCED BY: CRAIG KILLINGBACK