A Brief Overview of the 5 Impact Areas of B Corporation Certification
By now, most of us have seen the term "B Corporation" before, but what does it mean? At the highest level, a B Corporation is a for-profit company that has been certified by the non-profit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency. In order to become certified, a company must receive a passing score in the B impact assessment and complete a lengthy disclosure questionnaire.
The assessment looks at 5 key areas: governance, workers, community, environment, customers, as well as a Disclosure Questionnaire. In this article, we are summarizing each of the 5 areas of impact and the rationale for the disclosure questionnaire.
The Accordion Principle
Before we get into the nuts and bolts of the B Impact Assessment areas we need to share a crucial insight. The B Impact Assessment is a complex tool, it just looks simple at the outset! The assessment was constructed to create space for companies of all sizes, sectors, and regions to be able to measure and improve their impact. It’s a one-size-fits-all tool that allows for some fancy tailoring.
The assessment expands and contracts, like an accordion, to meet your company where you are at. The questions you encounter are determined by some of the first questions you are prompted to answer. Some may not feel right sized… it’s okay. Keep going!
1.) Governance
The first area of the assessment is Governance. The Governance Impact Area evaluates a company's overall mission, ethics, accountability and transparency through topics such as integration of social and environmental goals in employees’ performance evaluation, impact reporting and transparency, stakeholder engagement, and more.
Mission & Engagement: Training on Impact, Accountabilities for Impact, Stakeholder Engagement, Governance of Impact
Ethics & Transparency: Governance Structure, Code of Ethics, Financial Controls, Transparency (Internal or Public, Finances, Impact)
2.) Workers
The second area of the assessment is Workers. The Workers section looks at practices such as financial security, health and wellness, career development, and engagement and satisfaction. These questions are intended to achieve awareness and clarity around how your workers are treated.
Financial Security: Living Wage, Profit Sharing, Employee Ownership, Financial Literacy & Empowerment
Health & Wellness: Healthcare coverage, Wellness initiatives, Occupational health & safety, Leave practices
Career Development: Learning & Training, Review Process
Engagement & Satisfaction: Engagement & Satisfaction, Decision-Making (e.g. employees included in strategy), Flexible Work
3.) Community
The third area of the B Impact Assessment is Community. The Community Impact Area evaluates a company's positive impact on the external communities in which the company operates, covering topics like diversity, economic impact, civic engagement, and supply chain impact. The B Corp movement is working to create a just and inclusive economy where people from every walk of life thrive. The community section of the assessment is both a measurement tool and a blueprint for how companies can support thriving local economies.
Equity, Diversity, Inclusion: Inclusive Hiring, Retention, Compensation & Promotions, Diversity Metrics, Accessibility, +Reconciliation
Economic Impact: Jobs Growth, Local Impact, Banking
Civic Engagement: Donations, Volunteer Service, Ecosystem Development, Policy Advocacy
Supply Chain: Supply Chain: Supplier Diversity, Local Suppliers, Supplier Screening, Certifications, Social Practices
4.) environment
The fourth area of the assessment is Environment. The Environment Impact Area evaluates a company's overall environmental stewardship, including how the company manages general environmental impacts as well as specific topics like climate, water use and sustainability, and impacts on land and life.
Environmental Management: Facilities Management, Produce Certification, LCA/EMS
Air & Climate: Energy Use, GHG Emissions, Air Emissions, Transportation & Logistics
Water: Water Use, Wastewater
Land & Life: Waste, Packaging, Chemical Use
5.) Customers
The Customers Impact Area evaluates the value that your company creates for your direct customers and the consumers of your products or services through topics such as ethical and positive marketing, warranty and quality assurance of products and services, data privacy, data security, and more. This section of the B Corp Impact Assessment is the smallest section of the assessment, with just one sub-section on Customer Stewardship.
Customer Stewardship: Customer Satisfaction, Customer Outcomes, Data & Security, Ethical marketing
Disclosure Questionnaire
The final section of the assessment is the Disclosure Questionnaire. The disclosure questionnaire must be completed prior to submitting a B Impact Assessment for review. The five impact areas award positive practices. This disclosure seeks to understand risks and negative behaviours that may impact a company’s ability to become certified.
THE 5 IMPACT AREAS In a nutshell
B Corporations are for-profit companies that have been certified by the non-profit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency. In order to become certified, companies must complete a rigorous B Impact Assessment and receive a passing overall score of 80 points in the five impact areas; governance; workers; community; environment; customers. In order to submit for evaluation companies must also complete the disclosure questionnaire. The B Corp journey is different for every company. Decade clients tend to submit for certification after 4 - 6 months of effort and wait in a 6 - 8 month certification queue.
As specialist B Corp consultants Decade Impact can help advise you along this journey. Feel free to learn more about what we do, and how we do it and reach out to us, today.