How are companies incentivized to improve?
B Lab believes that changing the economic system requires continuous improvement and B Corp Certification is meant to shine a light on those leading the way in business; we must advance the standards for B Corp Certification to meaningfully demonstrate the leadership role that B Corps and the B Corp movement play in the world. This latest draft of the standards embodies and incentivizes the spirit of continuous improvement through mandatory improvements as part of standards requirements and encouraging companies to do more through ‘above and beyond’ measures.
Furthermore, there will always be opportunities for increased improvement through periodic updates to the standards themselves.
Mandatory Improvements
Mandatory improvement expectations from companies are incorporated into the latest draft standards in the following ways:
Within Complementary Impact Topics, companies are expected to set a specific number of improvement goals and demonstrate progress against these goals to recertify.
Further, after meeting the certification performance requirements, companies would be expected to start progressing against the Recertification Performance Requirements. Many recertification requirements require ongoing (e.g. annual) action and improvement, which would be verified at each recertification cycle (e.g., setting a net-zero target and demonstrating progress annually, demonstration of ongoing action for identifying and managing salient human rights issues).
‘Above and Beyond’ Measures
The latest draft standards also encourage companies to continuously improve in the following ways while not “requiring” such improvement for certification to manage the attainability of the standards.
Companies that ‘meet’ the requirements for certification are encouraged to ‘exceed’ their performance on these requirements, with clearly differentiated compliance criteria for both these buckets of performance. Companies’ performance on Impact Topics (either meet or exceed) could then be displayed on their B Corp Public Profile. For more details, please see section ‘How is performance recognized?’.
For the companies that are already exceeding performance in some topics/requirements, there will be opportunities for improvement within those topics where they are not yet exceeding performance.
While having an IBM will not be a prerequisite to certify as a B Corp, by providing flexibility and equivalencies in sub-requirements, and public recognition for possession of IBMs, companies would be encouraged to develop an Impact Business Model and grow it over time.
Beyond the requirements of setting a specific number of goals within the Complementary Impact Topics, companies can also go beyond and set more goals on such topics.
Companies will be able to see what higher sub-requirements apply to larger companies and therefore get visibility into what other ‘above and beyond’ measures they could take.