B Corporations in 2020
How has COVID-19 impacted the B Corp landscape?
With sustainability still perceived as a ‘nice to have’ in some industries, a pandemic might not seem the time to focus on ESG.
However, the pandemic has strengthened the argument for businesses to progress their ESG roadmap. In March, quick pivots saw UK companies such as Brewdog making hand sanitiser, Mulberry making NHS gowns and Leon feeding the Nation. It showcased how a clear social and/or environmental mission provided direction and durability in a time of uncertainty.
B Corp certification is a comprehensive tool for a company to measure their social and environmental impact. Five areas of impact are assessed: governance, workers, community, environment and customers, with certification awarded if a score of at least 80/200 is reached. Given their need to look beyond their own shareholders when it comes to setting strategy, are B Corp certified companies therefore more robust?
B Corps: Purpose-led and leading performance
B Corps have arguably fared better when compared to the wider-UK economy. B Lab (the not-for-profit which certifies B Corps) has seen its mission-locked businesses outperform their non-certified peers:
- Only 33% of B Corps reported to have implemented the furlough scheme, compared to a national average of 66%[1]
- 55% of respondents to a B Lab survey[2] believe that being a B Corp has contributed to improving the resilience of the business
- 47% of B Corps reduced management team’s salary compared to just one fifth of senior UK managers[3] indicating a more progressed corporate governance
- From March 2020 to July 2020 only 20% of B Corps in the UK had to postpone or abandon existing projects or initiatives, linked to their social and environmental impact
How has this changed the B Corp landscape?
Since March 2020, the number of companies creating accounts on the BIA (Business Impact Assessment tool) as well as those submitting assessments has doubled. Daily active users have increased by 150% and there has been an uptick in average monthly certification of 89% compared to last year.
More recently, in the Consumer space, this has been evident in the multiple recently publicised certifications. In food and beverage, Dash Water, Equinox Kombucha, Charlie Bighams and Riverfords have all been certified since July. In the wider Consumer space, The Little Soap Company, Vivobarefoot and Jamie Oliver have also achieved B Corp status in this time. In M&A, B Corps have continued to be attractive assets with Mindful Chef recently acquired by Nestle.
What does the future hold for B Corps?
There are now over 425 B Corps in the UK, an increase of 32% since 2019 and almost double that of 2018. As certified companies continue to flourish, this has had a step change in the mainstream. We predict the pace of change is only going to increase as the world economy bounces back from COVID-19, with Consumer awareness following suit.
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