B Corp certification pros and cons

A certified B Corporation, or 'Benefit Corporation', or B Corp, is a company that is said to meet “high standards of social and environmental performance, transparency and accountability." 

You might have seen its logo on products or websites of companies including The Big Issue, FatFace, GiffGaff and The Guardian.

Critical views of B Corp certification

Amidst this explosion of interest, increasing numbers of critical voices are emerging, not least from the smaller mission-oriented companies that adopted the label in its early years. 

In September 2023, news emerged that the giant French advertising agency Havas had won a huge PR contract with Shell. Havas has four subsidiaries certified as B Corps, in London, Amsterdam, New York and Malaysia. Extinction Rebellion and indigenous activists staged a die-in inside Havas London’s reception area, and a group of 22 other B Corp-certified PR agencies called for B Lab to strip the companies of their B Corp Status. B Lab launched an investigation in January 2024 and on July 18th stripped Havas of their B Corp status.

A much more widely reported backlash occurred earlier in April 2022, when a group of B Corp-certified Fairtrade coffee companies wrote an open letter to B Lab, alongside US-based non-profit Fair World Project, when Nestlé-owned coffee company Nespresso received its B Corp designation. Predictably, the single-use packaging of the product and poor human rights reputation of the parent company did not reflect the 'high standards of social and environmental performance' they had imagined to have a place in their 'community'.

Criticism has not been restricted to the movement's own members either. In April 2024, for example, the campaign groups EKO and toxicbonds.org filed a formal complaint with B Lab over its certification of the Swiss bank Lombard Odier. They specifically wanted to draw attention to Lombard Odier's investments in fossil fuel giants including Saudi Aramco, ExxonMobil, Shell, BP and Adani (an Indian coal company).

What B Corp does well

In one sense, none of this is surprising. Certification schemes which are trying to drive change are essentially political projects. This means that they are frequently, and quite rightly, the target for criticism and debate. And the B Corporation movement, which tries to be a 'holistic' scheme, accrediting across a wide range of issues, is likely to get more flak than most.

The important thing that B Corp certification does, which most other certification schemes do not, is require companies to amend their governance structure to become accountable to all stakeholders, not just shareholders. While the jury is still out as to whether this constitutes a radical enough change, it offers a glimpse of systemic solution to the core problems of profit-seeking corporate behaviours that lie at the heart of many of the world's most pressing issues. 

This practical step means that it's quite simple for existing companies to convert into a slightly more progressive form. And conversion at scale is something that other mission-oriented company models have been less good at.

In addition, whilst B Lab has been much criticised for certifying some of the subsidiaries of giant multinationals, (witness the Nestlé and Havas controversies above), it does offer a vision of how such monoliths might be changed - one subsidiary at a time - into something less damaging. The French food multinational Danone, of Alpro and Evian fame, is the poster child for this approach: 82.5% of its sales are now covered by B Corp certification, and it still has a stated ambition of making it 100%.

What B Corp does less well

As well as being criticised for certifying problem companies as we have seen, their approach to certification has also been under attack. Although B Corp claims to be a 'holistic' approach looking at five impact areas (environment, workers, customers, community and governance), a company only needs to score 80/200 to pass. This means a company could score zero for an area you feel strongly about (say environment) and still display the logo.  

At Ethical Consumer, we have also found some of the B Corp climate standards to be unusually vague. There didn't appear to be, for example, an expectation to be reporting carbon emissions or to have science-based targets for reduction in the versions we have seen - things that have sat at the heart of our own ranking standards for 5 years.

This doesn't look so good - particularly as the project describes itself as "transforming the global economy to benefit all people, communities and the planet".

All this would perhaps be less important if there were sufficient transparency in the system for consumers to see more detail on how their favourite brands were scoring. Unfortunately only high level scores across each impact area are available on the B Lab website.

In addition, one person's holistic approach can have obvious gaps for others. Ethical Consumer readers for example, long concerned about animal rights and welfare, would be disappointed to find only a few non-scoring 'disclosure' animal questions at the end.

B Corp standards review

In fairness to B Lab, some of these issues will apparently be dealt with once its standards review is complete. The review began in 2020 and has now just finished its 'second consultation' phase. Current proposals include a new notion of minimum standards in each area, greater public transparency around the detail of each company's score, and much tighter requirements around carbon management and reporting.

However this review has been a very long time coming and looks like it won't be implemented until 'some point in 2026'. As it is three years before a company needs recertification, there could still be companies out there in 2029 certified under the old standards, which we still won't be able to critically evaluate because the transparency is still poor.  

Campaigners have been critical of the weakness of B Corp certification in the area of tax avoidance since at least 2019. B Lab’s response has tended to be been along the lines of "we'll fix this in our next standards iteration". 

Perhaps that is OK for some issues. However, given that the UN's own climate secretary Simon Steill said earlier this year that there are only "two years left to save the world", delaying the implementation of stricter climate rules for all B Corp certified companies until 2029, and failing to require them of all companies right now doesn't feel right.  

Obviously with 8,000 certified companies in 50 countries, there is a lot of bureaucracy and a big community to consult. But with some ethical issues, you just need to find a way to move more quickly to remain relevant. Perhaps an exception should be made around climate standards and they could be fast-tracked?

B Corp - necessary but not sufficient

Because of this we can describe the B Corp certification as one that is in many cases necessary, but not sufficient, for ethical consumers to be sure they are making an ethical choice. 

It is necessary because it can provide an assurance that the business is sufficiently serious about ethics to change its governance structure to reflect this (though being a registered Co-op or Social Enterprise can do this too). 

It is not sufficient though, because most industries will have much more specific assurance schemes which will be needed, in addition, to sort the wheat from the chaff in each specific case.

Having said that, B Corp certification can bring value to areas where there are no specific industry-specific labels yet - such as solicitors or adverting agencies or sustainability consultancies. And it is in areas like this that B Corp appears to be thriving particularly. Though sometimes its desire for a broad appeal can, as we have seen, trouble the most radical of these.

Community and networks

Some businesses we have worked with at Ethical Consumer are also impressed with the active community that B Corps have built in the UK, and with the learning that can be had from going through its standard self-assessment. 

Of course, other communities of ethical businesses are available in the UK: such as those in the Co-op movement, the wider Social Enterprise sector, among the Good Business Charter's companies and even among Ethical Consumers own Best Buy network. And some companies are members of multiple networks as well as having multiple labels.

B Corp has done well in using language to inspire its movement, perhaps better than some of the other networks. Though there's a point where phrases like "transforming the global economy to benefit all people, communities and the planet" can seem a bit like over-claiming, especially given some of the criticisms discussed above. It looks like all the networks could learn from each other in this space to some degree.

In conclusion, in 2024, B Corps continue to be a welcome addition to the ecosystem of transformational ideas that the world still needs. But ecosystems, as we know, need diversity to thrive, and for consumers, other certifications and ethical business structures will continue to play more specific roles alongside it for the foreseeable future.

Read more by Rob Harrison 

Rob is an editor at Ethical Consumer and author of the Handbook of Ethical Purchasing. 

Read an introduction to the Handbook of Ethical Purchasing. 

Read Rob's 2017 article on B Corps as they were just beginning to take off.

Read other in depth articles about ethical consumer behaviours, institutions, ideas, interventions and campaigns on our Ethical Consumer Review hub on our research site.