The B Corporation (or ‘B Corp’) initiative was launched in the USA in 2006, with the first company being accredited in 2007. The movement transitioned across to the UK in 2015. It is a private, non-legal status certification for profit-making companies.
To gain B Corporation accreditation, companies must meet high standards in several areas. Companies must demonstrate their social and environmental impact, not just profit-making. The assessment standards include performance,accountability and transparency on multiple factors from charitable giving to employee and stakeholder benefits. Companies are required to go through a stringent selection process. Only those that exceed a score of 80 succeed in becoming B Corps.
In December 2021, there are currently over 4400 Certified B Corporations in more than 75 countries and over 150 industries. In a study carried out by PWC in 2020, it was found there were over 425 B Corps in the UK. This was an increase of 32% over accredited UK-based B Corps in 2019.
Any company can be successful in becoming a B Corp, however most current B Corps are small and medium-sized businesses that are privately held.
B Corporation status is granted by B Lab. B Lab is a not-for-profit organisation that creates global standards and policies to measure performance. Their mission is to drive the actions of the business community towards addressing the critical challenges facing the world today.
To achieve B Corp status, companies must:
· Achieve a B Impact score of over 80, which is an assessment of high social and environmental performance.
· Must change their corporate governance so that they are accountable to all stakeholders. Stakeholders include employees, the local community, their shareholders and the environment.
· Allow B Lab to publicly display their performance against accreditation standards, demonstrating transparency and commitment to the movement for change.
“B Lab positively impacts companies around the world, helping them balance profit with purpose.” – B Lab
In order to retain their status, B Corps are required to undertake the verification process every three years. They go through the same stringent assessment as initial certification which ensures their commitment to continuous improvement. B Lab measures a company’s entire ongoing social and environmental impact through the recertification process.
Notable B Corps globally include Ben & Jerry’s, Ethique, The Body Shop and Patagonia, Inc.
Why is B Corp status important?
Achieving B Corp status helps the company’s audience to quickly and easily determine that the company is committed to a broader set of values than just profit-making. The audience may be made up of potential investors, potential employees, customers and partners. It eliminates the risk to the audience of working with companies who are simply ‘greenwashing.’ Becoming a B Corp demonstrates a company is a genuine advocate for stakeholder benefits. It builds trust with consumers and stakeholders.
B Corps, by the very nature of their accreditation, demonstrate their commitment to their workforce. This helps attract and retain employees. B Corps also focus on long-term resilience and continuous improvement.
“Identifying as a B Corporation is a way to publicly claim an identity as an organization interested in both shareholderand stakeholder success. Having a clear identity can help firms communicate their values to customers, which is particularly beneficial when they are claiming an identity different from the industry norm.” – Harvard Business Review
When a company achieves B Corporation status, it is recognised as meeting the highest standards of social sustainability and environmental performance. Whilst many companies want to demonstrate their ‘green’ credentials, B Corps are recognised leaders in economic and environmental change.
In a study published in the Harvard Business Review, it was reported that many corporations are assuming the character of a ‘green’ company for the perceived reputational impact. These companies are still, however, adopting business practices that maximise profit as their driving force, which contradicts the façade they are publishing to the outside world. This is known as ‘greenwashing.’
In response to greenwashing, responsible businesses have united in their desire to demonstrate their commitment to ethical and sustainable practices. This has fuelled the rise in companies applying for B Corporation accreditation.
Simon Bocca, CEO and founder of PayCaptain says, “When setting up PayCaptain, it was critical that the business was set up to align with my own personal values. Whilst being profitable is an important factor, there is so much else we can do. We’re in the middle of a climate and social crisis that everyone has a responsibility to address. By becoming a B Corp, we are nailing our colours to the mast and demonstrating our commitment to a better future.”
How to become a B Corporation
For SMEs and start-ups, the route to B Corp status can be through becoming a Pending B-Corp. This is followed by full accreditation. Becoming a Pending B Corp signals to the business world that the company takes its environmental and social responsibility seriously. It also demonstrates that it has strong business governance in place. To apply for Pending B Corp status, the company must have a robust legal framework already. If they do not have this governance already in place, they will be unable to apply.
Requirements for Pending B Corps:
The company must have stakeholder governance documentation built in to the structure of the company. This documentation means that the company is legally accountable to its stakeholders – including customers, employees, the local community, the environment as well as its shareholders.
A ‘B Impact’ Assessment must be completed. This gives the applicant the information about the policies and procedures that must be implemented prior to application for Certified B Corp status. If the company progresses to applying for full B Corp accreditation, it must demonstrate how it has implemented the policies and procedures from the Pending B Corp Impact Assessment.
A contract then must be signed between the company and BLab. This is accompanied by an application fee.
PayCaptain is a fully certified B Corporation
Says Simon, “I’m incredibly proud that PayCaptain is a fully certified B-Corporation. From day one we’ve used the B-Corporation framework as our guiderail for being the best company we can be. We’re dedicated to creating positive experiences for our own employees as well as those of our clients.”
By engaging in the B Corp movement, PayCaptain has been built on a solid foundation for the future. PayCaptain’s aim is to operate in the most sustainable, transparent and impactful way. By becoming a B Corp, performance against accreditation standards is published on the B Lab website. This demonstrates PayCaptain’s commitment to transparency in the dealings with clients, employees and stakeholders.
PayCaptain is passionate about making a positive impact for both customers and their employees.
To learn more about how PayCaptain can support your business, whilst supporting social and environmental change, please contact us. We’ll be happy to arrange a demo of PayCaptain, including how your company can set up charitable giving and provide enhanced payroll benefits for your employees.
PayCaptain Payroll Solutions Limited, www.paycaptain.com is an HR/FinTech company that delivers a fully automated cloud payroll service. The solution contains many unique and innovative features for employees, helping them to take control of their pay and increase their financial well-being. PayCaptain is a payroll solution that helps employers pay their workforce, regardless of income and personal circumstances. The solution also incorporates functionality that is specifically designed to positively impact financial resilience for people struggling with money, or vulnerable and low-income employees.