Has the B Corp movement got too big?

There are now more than 6,000 B Corps globally – including, controversially, numerous multinationals. Will an overhaul of the certification process help the movement remain a force for good?
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The B Corp movement has come a long way. For instance, in 2007, when the first B Corps were certified, all of the companies were either small or medium-sized, with bold, purpose-driven agendas, as exemplified by the outdoor clothing retailer Patagonia. Today, 90 of the 6,000-plus B Corps are multinationals, and their staff represent almost a third of the total workforce of all B Corps.

One of their number is Nestlé-owned coffee brand Nespresso. The brand’s certification as a B Corp last year was the straw that broke the camel’s back for many in the movement, prompting an open letter signed by 30 existing members urging B Lab to make the certification process more stringent or else risk undermining the whole endeavour.

“The movement has reached a point where it needs to step back and critically reassess its purpose and how far it is living up to its potential,” says Dr Malu Villela, a senior research associate at the University of Bristol’s School of Management. 

She understands the anger some B Corp members felt when Nespresso achieved certification, but she doesn’t believe that bringing multinationals on board is necessarily a bad thing – as long as they raise their standards from what would usually be expected of such organisations and don’t settle for incremental change.

“The traditional CSR approach used by many multinationals has social and environmental goals at the periphery rather than the core of the business,” says Villela. She saw a similar response when researching B Corps in Brazil and the large cosmetics firm Natura was certified. Smaller beauty brands questioned the value of that certification, she says.

The movement has reached a point where it needs to step back and critically reassess its purpose

Her research in Brazil left her unconvinced that the existing certification process encourages companies to make radical change. “The high scores in the certification of these companies did not necessarily lead to improvements in the critical areas that needed attention or roadmaps for further improvements,” she says.

Instead, she believes that certification too often serves as a mechanism to improve external relationships with investors and clients, rather than improving workers’, communities’ and other stakeholders’ lives via social and environmental projects.

Introducing the new certification model

James Ghaffari, director of growth and product, B Corp, at B Lab UK, acknowledges that the existing certification process needs reform. A new iteration, he says, will be released in 2024. He points out that the online impact measurement tool, which is one of the central parts of certification, is already on version six, so these are by no means the first tweaks B Lab has ever made. But it will be the biggest evolution of the standards so far, driven by the urgency and scale of challenges such as the climate crisis and growing inequality.

“A deeper review and engagement with our stakeholders was needed, to really understand what leadership was necessary for the future of purposeful business,” Ghaffari says. 

The first consultation around the new standards began last year and involved canvassing not just existing B Corp members, but other experts drawn from academia, industry, business and government. “So far the process has reached about 1,200 different individuals,” Ghaffari says. “We’re trying to prove a model that is a different way of operating, in which businesses take ownership of their impact on people and planet, and we need all businesses to get on board with that,” he says.

Will the overhaul go far enough? 

For Villela, if B Lab’s new certification model is to be radical enough, it must include minimum standards so that companies can’t pick and choose what standards suit their business – for example, having a great work culture but a poor carbon footprint. 

Ghaffari confirms that minimum standards will be included across 10 categories and that the implementation will be phased to allow all the companies to make sure they’re meeting the new criteria. “There will be a high level of rigour, and we want businesses to see and understand that this is really a holistic look at a company’s impact across these minimum requirements,” he says. 

Is there a scenario where a brand which is currently a B Corp won’t meet the new standards? Ghaffari replies that most B Corps aren’t just signed up to one particular certification model but to a set of principles and values that are shared across the B Corp community. “Everyone in the community is aware of the scale of the challenge and therefore the scale of impact that we need to try and create to respond to that,” he says. 

How B Lab is growing the movement

All of this comes as B Lab attempts to reach out more widely. Ghaffari explains that the B Corp community has grown by welcoming larger businesses which have a desire for change, and that such an expansion is essential given the scale of transformation required. 

“A certain level of environmental and social performance from a large company brings a huge lift in positive impact,” he says. “Large businesses provide that heft in terms of moving their own impact, but also through the influence that they have with their stakeholders and their engagements on a policy level.”

But the doors haven’t been thrown open to everyone. Ghaffari insists that companies from certain industries will still be prohibited from becoming B Corps, including those working in coal mining, tobacco, pornography and firearms.

And despite some high-profile mudslinging, Ghaffari insists that purpose-led businesses remain on board and will have a key part to play in guiding the future of the movement. In December, for instance, more than 150 senior B Corp leaders, including execs at Patagonia, Abel & Cole and Honest Mobile, signed an open letter disputing an article in The Times, which had suggested that the B Corp gold standard encouraged greenwashing. “B Corp is more than a certification, it means being part of a community working towards a shared goal,” the letter stated.

Can the movement retain its soul?

Indeed, Villela believes that the movement’s biggest positive – in addition to requiring businesses to amend their articles of association to prioritise social and environmental impact alongside financial returns – has been the collaboration and networking it has encouraged between companies. That ranges from regional working groups such as those Villela studied in Brazil, to industry- or issue-specific groups. Moving forwards, she thinks this could be a route to broader systemic change in business, through working with other sectors and movements.

She also suggests that B Lab should explore ways of measuring success that go beyond metrics and ranking. “It should look towards ways of deepening values, principles and ethics, which it has become too technocratic about,” she says. 

In Brazil, she even heard B Corp members speak about the movement having soul. “Maybe that’s been diluted now, but when they take stock, they should consider those elements and push further in that direction,” she says. “Not just to build social capital, but to help build change within the network and beyond.”