Sustainability is high on the agenda for many businesses. Discover why becoming a B Corp could make perfect business sense
There is plenty in the media at the moment about sustainability, as the UK gears up to host the COP26 conference in Glasgow in November. Delegates from countries that signed the UN Framework Convention on Climate Change (UNFCCC) will gather to discuss how they are going to tackle climate change in a coordinated manner.
Sustainability and the environment have always been something I have been interested in and, earlier this year, I submitted my B Corp application for my accountancy firm to become a member of the B Corporation UK.
The B Corporation was established in 2006 in the US and there are currently 3,720 companies worldwide who are members across 74 countries and 150 industries. Currently, we have more than 400 members in the UK and they have one common goal – that by considering the social and environmental impact of their business, they balance profit and purpose.
Certified B Corporations are often referred to as B Corps and are defined by the B Corporation as ‘businesses that meet the highest standards of verified social and environmental performance, public transparency and legal accountability’.
In order to be admitted to membership of the B Corporation, it is necessary to go through a rigorous certification process and some of the companies that have become members include household names such as Brewdog, The Big Issue, Alpro and The Body Shop.
The area of sustainability frameworks is complicated as many frameworks exist but there is no single global sustainability reporting standard.
In the UK, it is mandatory for large companies to report on certain environmental areas already. By 2025 this will be extended, and it will be mandatory for some larger companies and financial institutions to disclose certain climate-related financial information in their statutory accounts with a significant portion of these reporting requirements coming into force by 2023.
At present, there is no mandatory requirement for all UK companies to report on their impact on the environment and society. It is for this reason that the B Corp framework is adopted by many businesses to monitor and measure their sustainability, giving them some specific areas of consideration and a structure that considers their governance and social and environmental impact.
Having targets and a clear focus really assist in identifying where they are today and areas where they can improve, as well as tracking their progress and allowing them to join the wider B Corp community with similar, like-minded organisations with similar goals and values.
To become a member of the B Corporation it is necessary to go through a comprehensive accreditation process. The business is required to complete the business impact assessment (BIA) which measures company performance across the five key areas of:
Points are scored in each area with the aim of scoring 80 or more points overall to become accredited. Each area is detailed and goes through a number of questions where you can score a range of points depending upon your answer and there are around 200 questions in total. Questions include, for example, details of spend with local suppliers, details of charitable donations and information on energy use.
Certified B Corps also need to amend their legal company governing documents in order to reflect the requirement for their board of directors to balance purpose and profit.
Once the BIA is completed and a score of 80 or more is achieved, it can then be submitted to B Labs. Once submitted, the company will then undergo a rigorous verification process by B Labs in order to check and validate the company’s application before admission to membership.
There is a fee of £250 to pay on submission of the BIA and, if accepted, there is then an annual membership fee based upon the turnover of the business. This currently starts at £1,000 for businesses with annual sales of up to £149,999.
In order to maintain B Corp certification going forward, companies need to update their BIA every three years and maintain or improve their score of 80 points or more.
I found the process of going through the BIA to be extremely valuable as it provided me with a clear structure. I really like that it also provides a roadmap of areas where I can improve in the future. I took a number of months to complete it thoroughly and read around the subject, but it could be completed more quickly if required and you have adequate resources available.
In short, the answer to this is no, it is a matter of choice, but the BIA can be a helpful tool to help your firm focus on becoming more sustainable whether or not you choose to continue to apply for full B Corp membership.
For example, you could use all or part of the BIA to help you examine and improve your policies and processes. You may want to focus solely on a specific section such as Workers and then take action in this area using the framework. Alternatively, you could go through the BIA as a firm annually and then track your process and target specific actions so you make improvements.
As the BIA is a free online diagnostic, it is accessible to everyone and many businesses do use it but have no intention of submitting their application for membership.
B Corp also has designated B Leaders who are officially trained by B Lab to help and support businesses through the certification process. They are located all across the UK and have detailed knowledge of the B Corp framework; I am currently going through my B Leader training. However, whilst it can be helpful to enlist the help of a B Leader, it is not essential and you could opt to undertake the application process on your own.
Sustainability is a huge area of focus today for both customers and employees (both current and prospective) and is something that many businesses will need to address to ensure their continued success. The UK has set out its plans to become net-zero and, to achieve this target, businesses will play a key role.
As accountants, we can assist businesses through raising awareness of the issues and by providing them with key financial information, metrics and support to help them track their progress and to make positive improvements.
We also have a role to consider with our own firms’ policies and procedures and the impact that we are having on sustainability and the environment. For example, we may want to make changes to our choice of suppliers, how we offset our carbon emissions, how we recruit, our impact on our local communities or our level of charitable contributions.
We all have a role to play and it may be that B Corp is the route that you choose to follow to make a positive impact The key is that we are making positive changes to become more sustainable firms that consider our impact on the environment and every step that we make to do so is a positive move forward. Something is better than nothing at all!
Caroline Harridence, Counting Clouds Cambridgeshire