Businesses with Standards: What is The B Impact Assessment?

a world map in man hands forming a heart (Earth map furnished by NASA)

I’ve recently discussed the way that social good is quickly becoming far more measurable, but many of us (myself included) are still trying to wrap our heads around what it means for a business to be truly ethical, and how that can be measured. Today I had the chance to talk to Dan Osusky, Standards Development Manager at B Lab, who gave me some insight into what the B Impact Assessment can tell us, not only about a company’s values, but about the real, measurable impact that they are having on our community and environment.

There is evidence to support a shift among both businesses and consumers toward socially and environmentally responsible business practices – so much so that even Al Gore is optimistic about it. However, with the rise in consumer interest in “green” products, comes an increased incentive for companies to advertise socially responsible practices without necessarily adhering to them. That’s where B Lab steps in. As they put it, their certification is designed to help people tell the difference between “good business and good marketing.”

On the business side, the B Impact Assessment helps companies take a look at their practices and compare them against best practices for ethical and impactful business. The Assessment scores companies across four dimensions:

  • Governance: The dedication of the business to social and environmental matters, financial responsibility and oversight, transparency, and the prevention of negative outcomes.
  • Workers: The company’s contribution to the financial, social, physical, and professional well-being of its employees, defined as those individuals who are on the payroll of the business (excludes independent contractors).
  • Community: The company’s contribution to the economic and social well-being of the communities in which it operates, including job creation and inclusivity, charitable activities, and collaboration with other businesses and organizations.
  • Environment: The environmental footprint of the business, as created by company facilities, input materials, outputs/wastes, and suppliers/distributors.

Once a company completes the Assessment, they are subject to a rigorous verification process to ensure that the information in their self-assessment was accurate. This includes an assessment review, in which the B Lab team asks follow-up questions on items that may have been unclear. Companies are also asked to submit supporting documentation to ensure that policies and practices discussed in the assessment are clearly documented and enforced. Finally, a background check is conducted. In addition, 10% of Certified B Corporations are randomly selected each year for an on-site review. This is a chance for B Lab staff to triple-check the accuracy of the company’s claims.

So what does all this signify?

It’s difficult to tell right away what the B Impact Assessment means, since it spans so many different dimensions. In order to be a certified B Corporation, a company must score at least 80 on the Assessment, however, those 80 points do not have to be evenly distributed across all of the dimensions that are assessed. As a result, it is possible for a B Corporation to become certified without high scores in every area of the Assessment (ex. maybe they treat their workers very well, but are not necessarily good for the environment). To find out exactly what a B Corporation excels at (and what they don’t), you would have to look them up in the B Corp Directory. B Corp Certification is complementary to other certifications (such as fair trade, organic, etc.), and does not replace them, but it is meaningful in its own right. Here’s what B Corporation certification really signifies (in my humble opinion):

  • A corporate effort to be socially impactful (not just appear so). In a culture that is so affected by advertising, it is easy for companies to fake a sense of social responsibility. The B Impact Assessment is designed to help companies take an inward look at their practices and think about how they could have a better impact on our world. Taking the assessment and scoring highly on it shows that a company is truly committed to social values and improving on their practices – not just talking about it.
  • A commitment to transparency. While many companies are trying to hide information about their social, labor, and environmental practices from the public, B Corporations are allowing this information to be scrutinized by experts, scored, and shared with the public.
  • A dedication to improve. One of the things that struck me the most about the B Impact case studies was the way the companies were taking a critical look at themselves and how their practices could be improved – and many of them really did improve over time. To me, this is the biggest signifier that B Lab is motivating companies, not just to show the public how they are impactful, but to actually improve the impact that they are having on the world today.

I hope this post was helpful – I am thinking about making a series of posts like this explaining what various certifications mean, and would love to hear some feedback on whether this is useful or how it could be improved (email or comment below). In the meantime, for more ways you can make an impact, check out my Advice and Tips section. As always, thanks for reading!

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