B Corp Services

What is a B Corp?

B Corporations, or “B Corps”, are for profit businesses certified by the non-for-profit organization, B Lab, for meeting ‘high standards of social and environmental performance, accountability and transparency’.

Legally required to consider the interests of all potential stakeholders (such as employees, society and the environment) rather than solely the company’s shareholders, the B Corp structure allows companies to work towards ‘reduced inequality, lower levels of poverty, a healthier environment, stronger communities, and the creation of more high-quality jobs with dignity and purpose’ while still making profit.

Why become a B Corp?

B Corp certification offers numerous compelling reasons for businesses, with B Lab research showing that UK B Corps out-perform traditional SMEs across a number of important business metrics. As well as validating a company’s economic social governance (ESG) activities and providing a useful high-level management decision-making framework, B Corp certification helps engage and retain talent, attract investors and bring in new business due to its verified ESG reputation.

What is the certification process?

B Corp certification is an extensive process and applicants must overcome a number of stages to achieve certification.

1. Meet eligibility requirements

Certification is measured on the verified practices and policies of a company over the past year and therefore, only for-profit businesses which have been operating (namely having at least one individual who has been contributing 35+ hours per week to the company) for at least twelve months can become a B Corp.

Newer businesses and startups without a year’s trading history may, however, still apply for B Corp Pending status before transitioning to a fully-fledged B Corp after a year. Sole traders can certify as a B Corp but are not eligible for Pending B Corp status, whereas charities, public bodies, majority state-owned entities and non-profit organisations are not eligible for B Corp certification at all.

There are additional eligibility requirements for large multinational companies with a revenue of over £100 Million, and subsidiaries who may be certified separately if they are able to demonstrate that they are operationally distinct from their parent company.

2. Complete the B Corp Impact Assessment

Consisting of approximately 200 questions, the B Impact Assessment (BIA) seeks to verify a company's social and environmental performance by examining a company's impact across five categories, namely governance, workers, community, the environment and customers.

Companies must demonstrate a high social and environmental performance in these impact areas by achieving a score of 80 or above, passing B Lab’s risk review and responding to the B Corp disclosure questionnaire. The questionnaire involves a series of “Yes-No” questions, thereby allowing the company to ‘confidentially disclose any sensitive industries, practices, fines or sanctions related to it or its partnerships’ to B Labs. The process can involve providing additional documentation, further background checks, attending interviews with B Labs and facilitating onsite visits from B Labs.

3. The B Corp legal requirement

The B Corp legal requirement is a fundamental element of certification and requires the company to alter their corporate governance structure and amend their constitutional documents to legally bind them to their promise to make a material positive impact on society and the environment.

The legal changes must be completed prior to certification for companies with 0-49 full-time employees, but companies with 50+ full-time employees are granted additional time to complete the change depending on its legal structure. For example, limited companies have up to a year after certification to complete the change and Limited Liability Partnerships have ninety days.

Our B Corp lawyers can help your company earn the full “mission lock” points available on this question, by ensuring that the legal requirement is correctly implemented during the B Corp certification process.

4. Sign the B Corp Declaration of Interdependence

As well as adopting the necessary legal changes, companies must also sign the B Corp Declaration of Interdependence, a legally binding mission statement which affirms their commitment to considering the interests of all stakeholders.

5. Agree to meet the transparency requirements

Companies wishing to be certified must exhibit transparency by allowing information about their performance, their overall BIA score, and their individual category scores to be published on the B Labs website. Public companies and their subsidiaries have extra transparency requirements however, and must publish their entire BIA online with any particularly sensitive information redacted.

6. Fees for registration

There is an initial registration fee of £250 plus VAT for submitting your business for certification and a one-off fee of £500 plus VAT to register for Pending B Corp status. There is also an annual fee based on the firm’s total revenue in the last twelve months which ranges from £1,000 (based on annual revenues of £0-£149,000) to £50,000 (£750 Million -£1 Billion). The BIA must be updated every three years in order to retain the B Corp certification and the price of re-certification also depends on the company’s annual turnover.

7. Review process

The length of B Lab’s BIA review process varies based on the company's size and complexity. B Labs estimate that small to medium-sized businesses will take approximately 6-8 months from start to certification, and large multinationals, companies with many related entities, or companies operating in controversial industries should expect a longer verification process.

How can we help you?

B Corp certification is a holistic process and may involve engaging various teams and departments across your company on several social and environmental issues. As a full-service firm, we have a broad range of experience in dealing with all legal issues relating to people in the workplace. From employment law to business immigration, pensions and corporate services (including employee incentive schemes), we are well-equipped to support you through the B Corporation certification application process. As an employee-owned business, we also understand the importance of promoting ESG goals and implementing a fairer and more employee-balanced approach to business.

As well as conducting an in-depth review of your governance processes and employment practices against the B Corp standards for a fixed fee, our B Corp lawyers can provide practical solutions to any issues found within your BIA application and address any areas for improvement. From assisting you with collecting the necessary information to support your application to drafting any missing documentation required to achieve certification, our teams are on hand to assist.

Our employment team will:

  • review your employment documentation to ensure you have clear and fully inclusive policies and contracts in place;
  • draft any omitted documentation following our review, for example any necessary whistleblowing policies to be implemented by the company;
  • provide advice on how best to manage employee performance and disciplinary actions from an ethical stance; and
  • ensure you are fully compliant under the Equality Act 2010 and deal with any outstanding discrimination claims before you apply.

Our corporate commercial lawyers can help you with:

  • meeting the B Corp legal requirements and amending the company’s constitutional documents to acquire the full 10 “mission lock” points in the BIA;
  • drafting the necessary ancillary documentation and Companies House filings as applicable;
  • preparing the relevant documents to extend your leadership team by appointing a non-executive director should you require;
  • employee incentivisation and satisfaction, by implementing comprehensive employee share option schemes; and
  • updating your commercial contracts to guarantee your suppliers’ compliance with the B Corp values as well as your own.

Our data protection experts can assist by:

  • providing tailored advice on how to best handle your organisation’s data from an ESG standpoint; and
  • modernising your data protection policies across the board.

We also have a number of contacts in the environmental consultant space and can work alongside them to provide a comprehensive approach to helping your company achieve B Corp certification.

Next Steps

To find out more about how our B Corp lawyers can help you, contact any of our offices, use our contact form, e-mail info@doyleclayton.co.uk, or book a free call today.

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