What Does It Mean To Be A B Corp?

The current political climate puts a big lens on where products are manufactured or produced. I think it's good that it makes us look at labels, learn about the origins of products and reflect on our shopping habits. I was never a big fan of buying strawberries from Chile in the winter (as an example), but I had no idea where my yogurt was from.

But while we’re already at it, why not also consider the ethical and social dimensions of products? Knowing that I’m opening a box of Pandora here, I would like to talk about the B Corp certification that recently caught my attention.

A few weeks ago, I went to buy my Nespresso capsules (don't judge me) and noticed the "B Corp" label in the store. Really?? A Nestlé brand is a B Corp? As someone from Switzerland, I'm well aware of what Nestlé has done over the years, so I was more than skeptical. But it made me look into the label and here's what I've learned.

B Corp Certification: A Brief Overview

B Corporations (also B Corps) are for-profit companies certified for social and environmental impact by B Lab, a global nonprofit organization. The organization was founded in 2006 in the US by three friends who had the vision to turn business into a force for good. The first 82 B Corps were certified in 2007.

According to their website, the B Corp Certification recognizes businesses that meet high standards of social, environmental, and ethical performance. To earn certification, companies must achieve a score of 80 or higher (out of 200), commit to stakeholder accountability, and, if possible in their jurisdiction, achieve benefit corporation status. They must also ensure transparency by publicly sharing their performance on B Lab’s website. They also have to undergo the verification process every three years to get recertified.

According to their website, there are currently 9,503 certified B Corps operating in 160 industries in 102 countries.

If you are interested in learning more about the process of becoming a B Corp, here is the feedback from the company Waterlust that actually went through the process.

While researching this post, I also found a podcast solely dedicated to the B Corp Movement. It's called "Beyond the B: Your Insider's Guide to the B Corp Movement."

So far, I'm intrigued by the idea of a label that holds companies accountable to social, environmental and ethical standards.

Canadian B Corp Directory

There's a website featuring a Canadian B Corp Directory, where you can explore the over 500 Canadian B Corps. Additionally, there are local chapters, including one in Vancouver, that host events and provide additional information. Of course, I had to check out the list of BC B Corps and I was excited to see companies from various sectors, such as a food delivery service, a construction company, a dental practice, and a film studio.

The Flaws of the B Corp Label

The more I read about B Corp and the B Lab, the more critics and different opinions popped up, which is to be expected. So, let's revisit my earlier suspicion regarding Nespresso. I searched for criticism about B-Corp, and guess which company popped up first? You bet—Nespresso. They and a few other large corporations are at the heart of the criticism. A major question being debated is:

Can a label certify large multinational corporations that have huge supply chains and may only address one area of sustainability?

In April 2022, a backlash erupted when B Corp-certified coffee companies and the Fair World Project criticized Nespresso, a Nestlé-owned brand, for receiving its B Corp certification. The groups called attention to Nespresso's poor human rights record, extractive business practices, and single-use packaging, which they felt did not align with the values of social and environmental responsibility promoted by B Corp. They urged B Lab to enforce stricter standards for certification. (BBC Article)

Another example is the French advertising agency Havas, which won a huge PR contract with Shell. Havas has four subsidiaries certified as B Corps: in London, Amsterdam, New York, and Malaysia. Heavy criticism led to an investigation, and Havas eventually lost its B Corp status (BBC and another source).

In episode 18 of the podcast I mentioned, Vincent Stanley, a longtime Patagonia executive, addresses the criticism of the label and the Nespresso case (I really hit a nail with this discovery :)). Stanley acknowledges the criticism and understands it, but argues that we shouldn't exclude big brands from trying to make an impact. He emphasizes that large companies, like Danone, have the capacity to drive significant positive change due to their extensive resources and global reach. They can also set new industry standards. Ultimately, achieving systemic change requires the involvement of large companies.

Although I understand his arguments and agree that having big players at the table is essential, I also believe we cut them too much slack. We all recognize the urgency of the climate crisis, and companies like Nespresso and its parent company have the potential to drive substantial change. If they are part of initiatives like the B Corp, they should be held accountable to constantly improve. They might achieve the 80 points needed for certification, but that leaves 120 points of notable challenges. Nespresso received 84.3 out of 200 points. So, what I hope from labels like B Corp is that they push the companies to continually strive for more.

I believe Patagonia is a good example. They are a B Corp, yet they are transparent about their shortcomings. At the same time, they challenge the whole industry to do better. And I think Ben&Jerry's is another big company that tries to impact the industry (especially with what's currently going on in the US).

Let's talk about greenwashing

Another criticism targets the process of the certification. To pass in five impact areas (environment, workers, customers, community, and governance), a company must score 80 or more out of 200 points. This means the sustainability goals are largely up to the company, allowing them to focus on specific areas. While this is not wrong, it may not align with your values. For instance, a company could score full points in governance but none in the environment. Alternatively, to put it more negatively, companies can prioritize what's easier to implement in order to achieve the 80 points.

Final Thoughts

When reading through the pros and cons of such a certification and the list of criticisms, a few things stood out to me.

• Consumers are increasingly conscious of environmental and social standards, and we all pay more attention to greenwashing. If H&M launches a "green campaign" today, we raise at least one eyebrow, whereas a few years back, we readily bought the "conscious collection".

• So, a mere stamp might prompt questions about a company's intentions, particularly if it is a multi-million dollar corporation. Is this a strategic approach to seem more sustainable, or is it part of a broader mission?

• A certificate with such a broad and holistic approach can never cover all aspects of today's complex supply chains, especially for large companies.

• However, I believe, the label provides small and medium-sized companies with a powerful way to differentiate themselves in the marketplace by showcasing their commitment to social and environmental responsibility. It offers credibility and access to a network of like-minded businesses, helping them attract customers, investors, and employees who value sustainability.

You can see that this label is not without controversy. Like almost every certification, it has its pros and cons. Simply dismissing it wouldn't do it justice though, but I would like to encourage you to reflect on these labels. Personally, I don't research every label, company, or manufacturer while shopping, but occasionally, such as with B Corp, it catches my attention, and I read about it at home to learn more about it.

I hope this was helpful. It kept me busy for a few weeks as I started to read more about it and realized that it was more complex than I thought. I'm curious to hear your thoughts.