During the pandemic, Adrian Ma had an epiphany that convinced him to make his company more environmentally and socially responsible.
“We celebrated all the people who did a great job,” he says, looking back at the time when people across the UK took to the streets to clap to show their appreciation for NHS workers and other key workers .
“And I thought, ‘Wouldn’t it be good to build a better world myself and start realigning the company with more purpose?'”
Mr. Ma is the boss of the London-based public relations firm Fanclub. Instead of creating his own framework for the company to adhere to, Mr. Ma decided to apply for a global certification called “B Corporation” or “B Corp” for short.
To receive accreditation, companies must demonstrate that they meet certain thresholds related to their social and environmental performance. And they must commit to changing their corporate governance structure to be accountable not just to their shareholders but to all of their stakeholders – employees, customers and suppliers.
The ethical system was first introduced in the United States in 2007 and 6,543 companies worldwide have now achieved B Corp status. These range from small companies to bigger names like Ben & Jerry’s Ice Cream and outdoor clothing company Patagonia.
The non-profit organization behind B Corp is the Philadelphia-based B Lab. It says it wants to “make business a force for good”. Each company pays a fee when they apply, and then – if successful – an annual subscription based on their earnings. In the UK this is initially £250 and then between £1,000 and £50,000 per year before VAT.
For Mr. Ma, joining the B Corp community meant his company went through several changes, including reintroducing paid volunteer days and providing guidance on recycling in an employee handbook.
However, he concedes that obtaining the certification hurt the company’s sales.
“We had to make difficult decisions and turn down 70% of customers who have since approached us to work with us,” says Mr. Ma.
“In one case, there was a great tech company with lots of money, but they were set up by a sovereign wealth fund in Saudi Arabia, where homosexuality is criminalized. It didn’t feel right to have gay people working for us.”
On the plus side, however, he says, it has increased employee engagement: “Everyone is much more motivated as they are focused on targeted deals.”
He adds that the firm’s B-Corp status has given it “a massive advantage in recruiting, especially younger employees, and in clients.”
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Chris Turner, executive director of B Lab’s UK arm, says the pandemic has prompted a huge surge in applications.
“Companies had time and used it as an opportunity to complete their B corp assessment,” he says. “Then there was more attention paid to sustainability – a continuation of trends we saw before the pandemic.
“And the climate discussion had picked up speed…there was also the explosion of the Black Lives Matter movement, which caused companies to think more deeply about issues. There was just more time to think deeply about the purpose and why we are here.”
Due to high demand, the verification process can currently take six to nine months, according to Turner. As part of the process, B Lab will require documentary evidence and may conduct site visits and spot checks, particularly for larger companies. The member companies then have to recertify themselves every three years and achieve a higher standard each time.
Companies can lose their certification, as happened to Scottish brewery Brewdog late last year. The removal of B-Corp status came after a BBC documentary – Disclosure: The Truth About Brewdog – exposed allegations of bullying at the company.
Despite this move, B Corp still has its distractions and controversies. Critics point in particular to the certification of the Nespresso coffee brand last year.
Nespresso, part of Swiss food giant Nestle, has long been targeted by environmentalists who have criticized both its business practices and its single-use coffee pods. Nespresso welcomed the achievement of B Corp status as a sign of its “commitment to sustainability, transparency and responsible business”.
This prompted an angry response from a group of smaller coffee companies, all B Corp members, who issued an open letter warning that granting Nespresso status “endangered” B Corp standards and called for stricter accreditation standards.
Currently, companies applying for B Corp membership are only required to achieve an 80 out of 200 score based on a list of criteria. Nespresso received 84.3 points.
Mr Turner defends the Swiss brand’s admission: “First of all, the standards to which Nespresso is certified are transparent, their assessment covers 500 pages and is public. You can download them directly from our website.
“On the other hand, there’s continual improvement, companies aren’t perfect … Companies join B Corp not just because they want to be recognized for a job well done, but because they want to improve.”
But what about other B Corps outrage at Nespresso? “We rely on the B Corp community to constantly push forward…we absolutely applaud that.” Our standards are always updated.”
Laura Harnett, co-founder of Seep, a plastic-free cleaning company that achieved B Corp status in 2021, says the application process isn’t easy.
“It’s a really big commitment and it keeps you from focusing on things like selling because you spend about 100 hours on the assessment.”
Ms Harnett adds that the transformation into a B-Corp company has so far produced tangible results, including the London-based company’s products now being stocked in 60 Oxfam stores.
Catherine Wang, Professor of Entrepreneurship and Strategy at Brunel Business School, points out that there are a number of other programs companies can join if they want to add a social mission to their business. These include Fair Trade, Community Interest Companies, Employee Ownership Association, Social Enterprise World Forum and the International Cooperative Alliance.
She says companies need to embrace a system like B Corp and “fundamentally transform their business models.” Ms. Wang adds that “a mere window dressing approach will not transform the business or bring lasting benefits to people and the planet.”
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