How (and why) to become a UK B Corp

What do allplants, Presto Coffee, Propercorn, and The Body Shop all have in common?

They are all certified B Corps!

But what does it mean to become a B Corp company? And how can a humble startup become part of such an illustrious club?

Since the B Corp movement began back in 2015, its mission has been to create a community of businesses that are leaders in the global movement for an inclusive, equitable, and regenerative economy.

The concept took the business world by storm. However, the desire from small UK businesses to achieve B Corp certification began to dwindle due to the myriad of issues caused by the COVID pandemic.

But as the dust settles on what was an incredibly trying time for businesses, a new dawn of priorities and ambitions for UK startups has risen, among them the goal to become more sustainable, inclusive and ethically viable.

And since the end of 2020, the number of B Corp certified organisations in the UK has nearly doubled from 360 B Corps to over 700 in 2022.

But why should you join the 700 plus B Corp organisations already operating in the UK? And how do you do it? Read on for all you need to know.

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This article will cover:

B Corp definition and requirements
What are the benefits of becoming a B Corp?
B Corp case study: Spruce
The three steps to becoming a B Corp organisation
What's a Pending B Corp?

B Corp definition

Being a B Corp means that certified businesses are part of a wider network of like-minded, for-profit organisations that see the business sense in making money, but also the business value in its capacity for positive social change.

Throughout any decision-making process, a certified B Corp will consider how each business move will impact both the community and the environment.

Rather than being driven solely by profits, every B Corp has a vision that’s grounded in moral and social good.

Certified B Corp status is awarded to those businesses that meet very high standards in social and environmental performance, transparency and accountability. This criteria is verified by B Lab, the not-for-profit organisation behind the B Corp movement.

What are the requirements?

To become a fully certified B corporation, a business must score at least 80 out of a possible 200 points in an online survey of roughly 200 questions, as well as pass a phone interview with B Lab.

A prospective business must also provide the necessary supporting documentation to validate its claims, and amend its corporate bylaws to include its commitment to positive social and environmental change.

What are the benefits of becoming a B Corp?

Excellent brand building

Becoming a B Corp is a great way to publicise your business in a positive light and set yourself at a higher standard than many of your competitors.

Since its launch in 2006, more than 150,000 businesses have signed up for the B Corp Impact Assessment, yet only 4,500 have been certified – which stands testament to its exclusivity.

Gain new customers and increase retention

Not the primary reason to become a B Corp, but certainly a pleasant by-product is that such a title can heighten the attractiveness of your brand and improve demand for your products/services.

A recent Deloitte survey indicated that a third of consumers look for brands with strong sustainable (34%) and ethical (30%) credentials

Attract talented employees

A B corp business is more likely to attract top talent. This is because one of the categories examined during the application process is a company’s impact on its workers and the community. So a B Corp business would typically have a happier, more inclusive and diverse workforce.

98% of employees surveyed at B Corp businesses say they are highly satisfied with where they work, according to B Impact Assessment results.

More attractive for investors

Investment firms and venture capitalists are more frequently applying the principles of ESG (Environmental and Social Governance factors) to their analysis of growth opportunities that can impact investment decisions.

A B Corp organisation would certainly have a higher ESG than a business that hasn’t been through such a thorough certification process.

As the Big Society Capital report found, social impact investing reached £6.4bn in 2020, up from £833m in 2011 – a clear indicator that investment in conscious businesses continues to grow.

B Corp case study: Spruce

For Mahira Kalim, founder of non-toxic cleaning products producer Spruce, her company’s mission has always been clear. To have not only a positive impact on the planet, but to make a meaningful contribution to the health and wellbeing of people through ethical practices.

In order to achieve this, Kalim put a plan in place to achieve B Corp certification. As of January 2022, Spruce is officially able to display its B Corp badge with pride.

Discussing the motivation behind Spruce’s B Corp certification, Kalim said:

“I really wanted to strengthen our commitment to people and the planet with something tangible. B Corp was a way to make sure we are holding ourselves fully accountable for every decision we make, from choosing our packaging and ingredients, to how we choose our suppliers and partners.”

As well as honouring the businesses commitments by achieving B Corp certification, the process also allowed Kalim to take a deeper look into how Spruce operates:

“One of the biggest benefits for us is how deeply the process made us look into monitoring and minimising the negative impact on the planet. From choosing our supply chain, selecting conscious suppliers and partners and treating our employees and customers fairly. It helped us improve on so many aspects of our business.”

And although for many businesses the annual cost of B Corp certification is a deterrent, for Spruce and Kalim, the benefits of such an accolade are a small price to pay.

“For us at Spruce, B Corp Certification is priceless. There’s no denying It is a lot of energy and time for a startup which I can understand would put some people off.

“But the benefits totally outweigh the costs. We got started on the certification journey before we launched our products, and this helped us put together a blueprint for how a new business should be set up.

“It allowed us to consider what dimensions must be thought through, where we can do better and build better business processes, how we can implement policies that improve our workforce’s physical and mental wellbeing, and how to work with partners and suppliers by making sure they understand our core business values and are committed to supporting us throughout our journey.”

In the initial stages of starting your business? Why not check out our article on the best sustainable business ideas for some inspiration.

The three steps to becoming a B Corp organisation

Step 1: Complete the self assessment

Used by over 50,000 businesses, the B Impact Assessment (BIA) is a free, online platform that evaluates how your company interacts with your workers, customers, community, and environment.

To qualify, your business must score at least 80 out of 200 in a self assessed performance assessment that focuses on B Corp’s five key areas:

Governance
Workers
Community (physical or virtual)
Environment
Customers

This step will take approximately 90 minutes, depending on the size and complexity of your business. It’s also possible to ‘save as you go’, so you don’t have to do it all in one chunk.

You will receive questions tailored to the size and sector of your business. In fact, most businesses that use the B Impact Assessment are firms that have between 0 and 50 employees. The questions in the B Impact Assessment (BIA) will look something like this:

After completing your BIA, the information from your self assessment is passed to the B Lab team. B Lab will then verify your score, rigorously analysing and verifying the long-term validity of your claims, to determine if your company meets the 80-point bar for certification.

At this stage of the process, you may be asked to produce some supporting documents to verify claims you’ve made in the BIA.

For example, if you state that 45% of the ingredients used in your products come from recycled materials, you’ll need to provide documentation proving this claim.

Once this step is complete, your business will receive an impact report. Should you qualify as a B Corp, your report will be published online on the official B Corp website, and will look something like this:

Note: reassessment is required every two years. Any company can fill out B Lab’s free self-assessment tool anytime to measure its impact on employees, the community and the environment, and get details on more than 150 best practices.

Step 2: Meet the legal accountability requirement for B Corp Certification

Make sure your business is in-line with the legal stuff. B Corp status is available to companies with at least six months of revenue – including Corporate Leaders’ Groups, Commercial Listing Services and Community Interest Councils – that are able to demonstrate the following:

The majority of revenue is generated through trading
The business competes in a competitive marketplace
The business is not a registered charity
The business is not a public body, nor is it owned by the state

You’ll also need to have, or adopt, governing documents that include an objects clause stating that the success of the business is designed to benefit its shareholders, and makes a pledge to have a material, positive impact on both society and the environment.

The governing documents of B Corps must also state that board members need to acknowledge a range of ‘stakeholder interests’. This means considering all shareholders, employees and suppliers, whilst justly regarding the impact any business decision might have on both society and the environment.

Critically, the business’ governing documents must stress that shareholder value is not the prime business consideration, but is one factor amongst the many stakeholder interests to be taken into account during the day-to-day running of the business.

Please note that the above is by no means extensive legal advice. If you’re looking to amend your business values to incorporate the interests of employees, consumers, the community, and the environment into your corporate governing documents, we strongly suggest that you discuss this move with your legal advisors.

Doing so keeps things watertight, making sure that you don’t leave your business open to any risks or loopholes that might occur if you reshuffle your corporate structure.

For a helping hand along the path to legal compliance, here’s a step-by-step guide to amending your constitutional documents. And, for a more comprehensive breakdown of ‘the legal stuff – including which aspects of the B Corp legal language you’ll need to incorporate into your constitutional documents – take a look at the full legal requirements for B Corp certification.

Step 3: Sign the B Corp Declaration of Interdependence, and pay the fee

The declaration of interdependence states that all B Corps:

“Must be the change they seek in the world.”

After you’ve signed the declaration, you must pay the mandatory annual fee before you can be officially certified as a B Corp organisation.

Your annual certification fee will depend on your annual sales figures, as detailed below:

Annual sales	Annual fee
£0 - £149,000	£1,000
£150,000 – £499,999	£1,250
£500,000 – £999,999	£1,500
£1m – £2,499,999	£2,000
£2.5m - £4,999,999	£2,500
£5m - £7,499,999	£3,000
£7.5m - £9,999,999	£4,000
£10m - £14,999,999	£6000
£15m - £19,999,999	£8,500
£20m - £29,999,999	£12,000
£30m - £49,999,999	£16,000
£50m - £74,999,999	£20,000
£75m - £99,999,999	£25,000
£100m - £174,999,999	£30,000
£175m - £249,999,999	£35,000
£250m - £499,999,999	£40,000
£500m - £749,999,999	£45,000
£750m - £1bn	£50,000

What’s a Pending B Corp?

Only available to companies that have been operating for less than 12 months, Pending B Corp status is designed to help early stage companies make that commitment count.

It’s a stepping stone towards becoming a fully certified B Corp (although full certification is not mandatory beyond the pending stage).

After 12 months, Pending B Corps can then go through the full B Corp Certification process. However, with a head start on the legal requirement and full knowledge of the B Impact Assessment, Pending B Corps should certify with ease.

How to become a Pending B Corp

To become a Pending B Corp, you simply go through the B Impact Assessment with best estimated answers, and meet the legal requirements for certification.

Then there’s the £500 fee, for which your company can use the “Certified B Corp: Pending” intellectual property, so you can publicly communicate your commitment.

Why become a Pending B Corp?

To show current and future investors that your company is already beginning to measure and manage its social and environmental performance with the best tools available
Demonstrate strong governance by adopting the legal framework early, protecting mission and brand equity from the beginning
To become part of the B Corp community, helping you network with like-minded, ethical businesses

Conclusion: becoming a B Corp is worth the effort

Gaining B Corp status means that as a business, you are committed to treating people, communities and the environment as they should be treated: respectfully, sustainably, and ethically.

Cutting corners and turning a blind eye to discrimination or unethical business practice is not in line with the B Corp vision.

As such, those businesses flying the B Corp flag are proving their commitment to the society in which they operate – showing more than just a keen sense of ESG (Environmental and Social Governance), but proving via credible means that they’re a business committed to making positive change.

Let’s recap the pros of your startup becoming B Corp certified:

Brand building and prestigious accolade that sets you apart from competitors
Expand customer/client base and retain existing customers who appreciate your strive for conscious excellence
Attract top talent from a variety of different backgrounds
Become more viable for investors

There’s really nothing to lose. And it is a lot easier to become B Corp certified whilst you are a small business laying down the foundations of your business model, than later down the line when you have become more established and rigid in structure.

So why not fill out the B Impact Assessment (BIA) today, and see how close you are to that magic score of 80?

Or to find out more about how your business can become greener, read our article on the five sustainable initiatives your business can adopt to help reduce its carbon emissions.