There is an ever-growing community of B Corporations in the UK, with over 2,000 companies now certified; a figure which has doubled in the past 18 months.
Certified B Corporations, or B Corps, are companies that have been assessed by B Lab UK’s independent governing body as meeting verifiably high standards of social and environmental performance, transparency and accountability. B Corps have reported an increase in the motivation and commitment of their employees and in customer loyalty, with research showing a faster rate of annual growth in turnover for B Corps when compared with other UK companies.
But what does B Corp certification involve?
Step 1 – Impact Assessment
In order to pursue certification, the business must have been operating for at least 1 year.
Using B Lab UK’s online B Impact Assessment (BIA), the performance of the company is measured across 5 key impact areas: Governance, Workers, Community, Environment and Customers.
The BIA consists of around 200 questions and requires certain data depending on the size and sector of the business. The turnaround time for receiving the company’s score is generally within a week, though this may be longer for larger companies.
Step 2 – Improving Your Company’s Score
To submit the BIA, a baseline score of 80 is required. For companies that fall below this threshold, the BIA contains resources which can be used to improve their score. Once an assessment has been completed, a personalised report is generated to identify key areas for potential improvement, such as becoming more transparent with employee policies or establishing a Code of Conduct for suppliers.
Step 3 – Meeting the Legal Requirement
Companies who wish to become certified must demonstrate their commitment to the values of the B Corp movement by making an amendment to their articles of association. B Lab provide approved language to be inserted into the articles, which largely relates to the duties of the directors and embeds a stakeholder-focused mindset within the company’s constitution.
To amend its articles, a company will need to obtain board approval along with a special resolution, approved by over 75% of its shareholders. The amended articles of association and shareholder resolution will then need to be filed with Companies House within 15 days of making the changes.
Step 4 – Submission and Review
On submission of the BIA, a one-off fee of £250 plus VAT is payable. Additional supporting documentation and evidence may then be requested, and the company will need to attend a review call with an analyst to discuss the BIA in detail.
Once the review process is complete and a score of over 80 has been achieved, the company will officially become a B Corp.
Step 5 – Post-Certification
Once a company has become certified, they can begin to make use of the benefits associated with being a B Corp including signing up for events, connecting with other local B Corps and making use of the B Corp logo in the company’s marketing.
B Corps are required to recertify every 3 years, and B Lab therefore recommend that companies make active use of the BIA in order to strive for continuous improvement.
Additionally, as part of the amendments to their articles made in Step 3, the company’s directors must publish an annual Impact Report, which serves as a method of regular communication with all relevant stakeholders regarding the company’s impact, progress and future plans.
For assistance with amending your company’s articles of association as part of the process of becoming a B Corporation, please contact our Corporate and Commercial team on 0116 289 7000 or info@bhwsolicitors.com.