A guide to the UK B Corporation movement

Sustainability is now mainstream.  Our studies show that the UK consumer is becoming more cautious with their money.  Brands are having to fight harder to win. For many, positive sustainability credentials gives your brand a competitive edge and keeps you on top of their mental shopping list.

New hires are increasingly looking to an organisation’s ethical credentials before they agree to take on a role. Our Workforce of the future study highlights four work scenarios, including the “Green World”. Here corporate responsibility isn't a nice-to-have but a business imperative. Workers and consumers demand that organisations do right by them and the wider world. Having B Corp certification shows your potential new recruits this is fundamental and increases your likelihood of getting that great new hire.

There is a growing “impact” investor community focused on financing profit-led businesses with strong environmental, social and governance (ESG) values.  Private equity houses too are coming under scrutiny. They use ESG specialists to show their backers that their portfolios reflect positive standards and best practice.  For all it’s more and more important investments are diverse, inclusive and accountable. B Corp status requires a certain level of due diligence, which means future investors can have more trust in a B Corp and potentially less cost when they perform their own. Many investors are also positively screening for B Corps to check a potential investment fits with their organisations values. So when it comes to funding, B Corp status could be the deal-clincher.

Certification needs to renewed every three years and there is an annual fee, scaled according to revenue and starting at $500. Certification requires a score of at least 80 (out of 200) against 5 areas of impact: Governance, Community, Workers, Environment and Customers. The time taken to achieve accreditation varies with each organisation and its complexity, but the process typically takes four to six months. B Corp status is a long term commitment and needs to be resourced accordingly with the appropriate checks and measures in place.

Whilst there is a growing community of investors who find B Corp status appealing it is still early days. As B Corporations will need to take decisions not necessarily around profit maximisation, investors are rightly cautious that such a certification could inhibit growth and flexibility (a commonly cited perceived tradeoff is cost base vs ethical supply chain). If you are looking for investment in the future it is worth considering now who you are targeting and their likely response to your B Corp status.