A B Corp, or “Certified B Corporation”, is a certification given to for-profit companies that meet high environmental, social and governance (ESG) standards. B Lab, a non-profit organisation, sets the standards for B Corps and issues the certifications.
B Corps are organisations that actively develop their business model to have a positive impact on the world, rather than purely focusing on profit. They put high value on the effects of their business on all stakeholders, including customers, employees, the community, and the environment.
How does a business become a B Corp?
Achieving B Corp status involves a rigorous assessment process that evaluates a company's performance across five key areas: Governance, Workers, Community, Environment, and Customers.
To get certified as a B Corp, companies typically need to follow these steps:
- Companies need to evaluate their impact on workers, the community and the environment, as well as its governance.
- Analysts at B Lab (who set the standards for certification) will review the results of this evaluation. The company may also need to provide supporting documentation.
- Companies must update governing documents to demonstrate a commitment to all stakeholders, not just shareholders.
- There is also a one-time submission and verification fee and an annual membership fee. Discounts may be available for certain companies.
B Lab provides a cost calculator to help companies understand what B Corp certification may cost.
B Corps must demonstrate transparency in their performance and abide by high social and environmental standards. This certification signifies a company's commitment to balancing profit with purpose and making a positive impact.
Why might businesses seek B Corp certification?
There are several reasons why UK companies might wish to gain B Corp certification:
Credibility and reputation
B Corp certification is a public declaration of a company's commitment to social and environmental responsibility. Customers across most industries actively seek businesses with greater commitment to these issues. B Corp status can lead to greater trust and loyalty with such customers.
Staff recruitment and retention
Young, talented professionals, particularly Gen Z and younger Millennials, are placing greater importance on the social and environmental impact of the companies they work for. B Corp certification can make a company a much more appealing place of work, helping both recruitment and retention of staff.
Cultural boost
The actual assessment process of B Corp certification can help a company pinpoint specific areas for improvement in its social and environmental performance. This encourages a more engaged and motivated team and helps instil a greater sense of purpose within the organisation.
Networking opportunities
As a B Corp, a company becomes part of a global community of organisations with aspirations and values similar to their own. This can present opportunities for worldwide collaboration, business development and knowledge sharing.
Investment opportunities
B Corp status acts as a credible third-party verification of a company's social and environmental performance, making it more attractive to certain investors from an ethical perspective. The organisation’s focus on long-term sustainable planning can also be an encouraging sign of growth potential.
Future-proofing
In a world where Environmental, Social, and Governance (ESG) factors are becoming more prominent, B Corp certification can be a strategic long-term move for companies. It can also help a company meet certain standards before they might be mandated by governments later on, reducing the need for urgent changes in strategic direction.
Are there any tax breaks resulting from B Corp certification?
As of June 2024, no specific tax breaks are associated with B Corp certification for UK companies. While the UK government recognises the positive contributions of B Corps, they are not offering any financial incentives tied directly to the certification itself.
However, regardless of B Corp status, B Corps can still benefit from existing tax reliefs and programs available to all companies. These include R&D Tax Reliefs, small business relief, environmental reliefs, and Patent Box.
How many B Corp-certified companies are there in the UK?
According to the latest figures from Bcorporation.uk, there are currently around 2,000 certified B Corps in the UK. As awareness grows throughout the national business community, this number is set to grow considerably over the coming years.
