The Spirit of Continuous Improvement Is at the Heart of the B Corp Movement
How the Draft Standards for B Corp Certification Aim to Raise the Bar on Impact Improvement
“Continuous improvement.” A quick online search throws back a definition as “the process of making small incremental changes that add up to significant results based on deliberate observation of current processes.” Often used in a business context, this refers to evaluating and optimizing processes and operations, enhancing the experience of stakeholders, and, fundamentally, scaling impact. There is an inherent recognition of imperfection; it is the commitment to ongoing evaluation and improvement that matters.
It’s easy to see how this concept reflects the collective belief of B Lab and the Certified B Corporation movement. B Corps are not claiming to be perfect companies, but instead are companies willing to measure their impacts, identify opportunities for improvement, and implement changes to drive incremental change over time. As such, globally, the B Corp movement is an embodiment of continuous improvement.
This Way Forward
Uniting companies across 96 countries and 162 industries that employ more than 750,000 workers, the B Corp community showcases daily how to move business forward. Continuously improving their impact to create more inclusive workspaces, improve their climate impact, and respond to the world’s ever-changing issues, every B Corp business has its eye on progress. Getting certified as a B Corp isn’t the end of the road — it’s just the beginning.
Most B Corps keep improving their impact over time. That’s not just anecdotal. Throughout 2022, when it was time to renew their B Corp Certification, 63% increased their impact score. Right now is the time for upholding that improvement, when throughout March for the annual community celebration of B Corp Month this cohort of companies is — more than ever — showcasing what it means to be a B Corp by sharing the inspiring breadth of ways they are moving, changing, and growing impact to create a better future for everyone.
Last year, our Forces for Good podcast closed on its first season, reminding us of this future-facing mentality. The episode “How companies can learn from mistakes and continuously improve,” saw host Irving Chan Gomez remarking that “B Corp Certification is a journey, not a destination. Making your business a Force for Good — and ensuring it stays that way — means constantly working to improve your practices.” As Irving said: “B Corps acknowledge that they are not perfect. Their leaders, like all humans, will inevitably make mistakes and missteps in their business practices. And when they do, they recommit to mitigating their negative impact and striving to create a positive one; on people, communities, and the planet.”
This could also be said about B Lab as an organization. While the format of our current standards has served the movement well for the past 17 years, with six updates and iterations during that time, we are now evolving them in their entirety. This is a multi-year process with plenty of iterative learning and stakeholder consultation to overhaul the existing structure and content, along with our products and processes, raising the bar for businesses.
Community Leading by Example
The spirit of continuous improvement is at the soul of this movement, with a mindset of continuous improvement prevalent and encouraged across the B Corp community. Under the current standard, businesses are required to recertify in three-year cycles, and the recertification process requires companies must maintain their 80-point score while also adapting to any recent changes in the standard to remain a B Corp.
Many businesses in the community have increased their performance at recertification. The Guardian recently increased its score by 17% on recertification and proudly shared this progress. Patagonia has long embodied the values of impact improvement; on initial certification in 2011 it gained a score of 107. This climbed 113 by 2014 and continued to rise until 151 in 2020. Today Patagonia’s score sits at 166. Vivobarefoot, Amalgamated Bank, Cotopaxi, Legacy Vacation Resorts, and Nice & Serious (who designed this year’s B Corp Month campaign!) are some of the B Corps that have raised their score by over 20 points since last verification.
The Future of the Standards
While this is encouraging, the proposed new standards go a step further and recertification expectations will be much more defined; companies must demonstrate ongoing compliance with the outlined requirements and share progress on topic-specific plans and goals. We have pulled out some specific examples (and each mentioned sub-requirement is numbered for your reference) from the latest draft standards to highlight this in business-relatable terms below.
Fair Wages
At initial certification, larger companies will be required to calculate their gender wage gap and publicly disclose it under requirements FW1.4 and FW1.5. The impact improvement does not stop there. At recertification, through FW1.6, the same companies must reduce the gender wage gap by at least 50% or explain why the target was not reached.
Human Rights
Through HR3.9 and ESC2.7, all companies in the service with a minor footprint sector will be required to assess the potential negative human rights and environmental impacts of working with each potential client (or project) and take necessary mitigation actions. At initial certification, the company must explain how it assessed the potential negative impacts for the three most material potential clients or projects in the last fiscal year and the outcomes. To recertify, the company will be required to do the same assessment for an additional six most material potential clients or projects. Further, if a potential or actual negative impact is identified, the company is required to explain the mitigation actions that it took.
Climate Action
At certification, through requirements CA2.1 and CA2.2, all companies will be required to set a science-based target (including interim targets) to keep global warming below 1.5 °C. Through requirement CA3.1, all companies must also define a climate transition plan to reach their target. At recertification, CA3.6 ensures that all companies are required to make progress on their plan by demonstrating that they: took action since the last certification in line with the company’s climate transition plan; continue to set interim targets every five years; and if the plan was ineffective, demonstrate what they will plan to do differently … and more.
Environmental Stewardship and Circularity
All companies (except sole proprietorships without other workers or those in the service sector with minor footprint) will be required to annually monitor their waste production, energy consumption, and water consumption through requirements ESC1.1, ESC1.2, and ESC1.3. At recertification, through requirements ESC 4.4, ESC4.5, and ESC4.6, they’ll have to mitigate their environmental impact, progress with their environmental strategy, and consider actual and potential environmental impacts in their procurement decisions through ESC5.1 and ESC5.2.
Purpose and Stakeholder Governance
At certification, all companies will be required to have a public purpose statement that is aligned with the Purpose Clause of the B Corp legal requirement (PSG1.1), and their highest governing body must monitor the company’s social and environmental impact and stakeholder considerations (PSG5.1). At recertification, larger companies are required to measure worker perception of the company’s social and environmental strategy as per PSG6.2.
Complementary Impact Topics
Through requirements CIT2.2 & 2.3, companies will be required to publicly commit to two or five improvement goals, depending on their size, for the most material themes from the Complementary Impact Topics of Ethics & Transparency, Worker’s Career Development, Worker’s Health, Wellness, & Safety, Civic Engagement & Giving, Economic Impact, Supply Chain Management, and Customer Stewardship. At recertification, companies will then be required to publicly disclose the progress against these goals.
‘Above and Beyond’ Measures
Beyond the examples of mandatory improvements mentioned above, the proposed standards will also encourage companies to continuously improve while not requiring such improvement for certification. 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. More details on this proposed framework are available in the section “How is performance recognized?” of the draft standards.
For the companies that are already exceeding performance in some areas, there will be opportunities for improvement within other topics where they are not yet exceeding performance. Further, while having an Impact Business Model (IBM) will not be a prerequisite to certification as a B Corp, by providing flexibility and equivalencies in sub-requirements and public recognition, companies would be encouraged to develop an IBM and grow it over time.
To reach an even higher bar, businesses will be able to see what higher requirements apply to larger companies to gain visibility on other “above and beyond” measures they could take.
We’re Looking Ahead
As companies that care for people, profit, and the planet in equal parts, B Corps are leading the way on how the business sector can influence a better, bolder, brighter future. Whether you are certified already, looking to improve your impact, or curious about how the proposed standards will raise the bar for businesses, have your say. Share your feedback by March 26!
This article was originally published at https://www.bcorporation.net. B The Change gathers and shares the voices from within the movement of people using business as a force for good and the community of Certified B Corporations. The opinions expressed do not necessarily reflect those of the nonprofit B Lab.
