Consumer attitudes are changing – and quickly. According to a 2022 survey, two-thirds of UK consumers consider the environmental impact of the items they purchase, while nine in 10 say it is important that companies do social good and have a strong ethical reputation.
But identifying what makes a company sustainable and socially conscious is tricky in a world where many organisations are laying claim to responsibility – some with more evidence than others. As a result, B Corporations are emerging as a critical benchmark for ethical business practices.
B Corps are businesses certified by the non-profit B Lab for meeting rigorous standards of social and environmental performance, accountability and transparency. “Every B Corp is making a legal change to consider people and planet alongside profit,” explains Rosalind Holley, director of communications and marketing at B Lab UK, which adjudicates B Corp certification in the UK. The organisations that apply for and achieve B Corp certification are signalling to the world that they are dedicated to doing the right thing for the future of the planet and its inhabitants.
But despite their growing relevance, many consumers remain unaware of what B Corps are and why they matter.
“I suspect most consumers don’t know about B Corp,” says David Duffy, co-founder and CEO of the Corporate Governance Institute. In part that’s down to the scale of the B Corp certification: there are around 1,700 officially recognised B Corps in the UK that employ more than 80,000 people. Since August 2023, Raconteur has been one of them. That number sounds impressive until you realise that there are 32 million people working in the UK. There’s still a way to go before B Corp certification becomes standard.
Public perception of B Corp businesses
The comparatively small reach has an impact on public perception. While consumers know that they want businesses to do good in the world, or at a minimum to tamp down their extractive and exploitative elements as much as possible, many aren’t paying enough attention to B Corp certification and what it means for a company’s ESG credentials.
Consumers are increasingly drawn to purposeful brands. Holley points out that: “Eighty per cent of people say that they would buy with people and planet in mind.” But she also acknowledges the challenge that consumers face in identifying truly sustainable brands in a sea of green marketing, underscoring the value of certifications like B Corps in guiding consumer choices.
“It’s a good thing that somebody out there is trying to certify organisations to a particular standard,” says Duffy. “If you’re a customer of these organisations, hopefully, you’re buying something that’s ethical and meets criteria that appeal to you.”
But not everyone believes that the B Corp assessment is an appropriate litmus test for sustainable practices. Rebecca Gudgeon, head of sustainability at Hudson Sandler, raises concerns about the effectiveness of some certifications, including B Corps.
Gudgeon recognises that certification schemes like B Corp can signal a company’s good intentions to consumers. Still, she also points out that firms “can score highly by having the right policies in place. But whether you enact those policies is a completely different matter.”
Listed companies in particular need those sustainability policies in place because every listed company produces a sustainability report, reasons Gudgeon. But those reports are tailored internally to present the company in the best possible light to peers and investors. Verifying how those policies are implemented is a challenge.
What B Corp means for customers
Still, B Lab and the companies it certifies insist that a clear, uniform sustainability certification system is more than a marketing tool. It’s necessary if robust sustainability policies are to be more widely adopted.
“It sends a strong signal to your customers, employees and consumers that your business is committed to doing the right thing for people and the planet. But it also shows a commitment to continuous improvement, accountability and transparency,” says Holley.
Making B Corp certification a status symbol – and one that literally can be brandished to consumers to claim your credentials – is vital, argues Holley, because it compels change across organisations. “We’re not going to move to an economy that’s more inclusive and more equitable unless business plays its part,” she says.
So, while businesses have started to show their commitment to sustainability through accreditation like B Corp, it’s now incumbent on consumers to play their part. Consumers interested in making sustainable purchasing decisions have a responsibility to seek out information on certification standards and sustainable businesses and use that information to guide their purchasing decisions.
Consumers are bombarded by claims to sustainability; most of them inconsistent and unverified. Attempts to standardise and confirm those claims are essential to creating a more sustainable world and shouldn’t be ignored.
The impact of B Corp certification and other standardised processes depends on closing the consumer knowledge gap, ensuring rigorous certification processes and improving communication about what these certifications mean. As consumers grow more environmentally and socially conscious, their attention to certifications like B Corps can significantly drive the movement towards a more sustainable and equitable economy – and improve the future for everyone.