“I only buy sustainable products from now on. It’s good for the environment, the animals, the suppliers and the employees!”
Many of us have already had this thought. But what do you use as a guideline? Today, there is an almost unmanageable forest of different certificates, all of which claim to make a special contribution to the sustainable treatment of our environment.
Whether “organic” or “non-GMO”, for the protection of the primaeval forests or the producers. They are called “FairTrade”, “Blue Angel”, “UTZ”, “FSC” etc. But what do they mean? Are they as sustainable as they claim to be? – difficult questions, especially when you consider that most standards usually only cover part of the production process.
What good is an organic product if the workers are mistreated? What good are fair prices if the rainforest continues to fall victim?
It is becoming increasingly difficult to distinguish genuine commitment from green- or woke-washing.
B Corp“-Certification and the Stakeholder Approach
The independent sustainability network B Lab has been trying to solve this dilemma. Its internationally valid B Corp-Certificate is now considered the ‘Holy Grail’ among product certifications by consumers as well as labour lawyers, scientists, and environmentalists. For many companies and their brands, it is the ultimate accolade.
In this context, B Lab follows the stakeholder approach, which the company wants to make the standard: instead of profit maximisation at any price and sustainable commitment to a few parts of the value creation process, all stakeholders who are directly or indirectly affected by a company’s activities are to be considered.
Stakeholders include suppliers, customers, shareholders, communities (where the company has factories and headquarters) and the environment.
A B Corp-Certification is only awarded to those who meet the demanding requirements in five categories covering these stakeholders and make a binding commitment to follow the B Corp guidelines, actively address stakeholder needs and transform the global economy in this way. Every three years, the company is reassessed and only progress is rewarded – if the score stagnates, the company is kicked out again.
Among consumers, experts, environmentalists, and labour lawyers, B Corp is regarded as a kind of 3-Michelin-Star ranking for exemplary social and ecological behaviour.
The B Lab-Network
The certification is carried out by the US non-profit organisation B Lab. In addition to branches in the USA, it is also represented in Latin America, Australia, Europe, and East Africa. To maintain the credibility of the B Corp-Certification-Standard, it operates according to the principles of independence, completeness, comparability, dynamism and transparency.
B Lab thereby has an advisory board for the further development of the standards, which can make independent decisions with or without the support of “B Lab. The members are made up of scientists, entrepreneurs, activists, suppliers, and customers. It recommends improvements to the B Corp guidelines every two years. There is a 30-day public consultation before a new version of the B Corp-Certification is published.
The Five Categories
Control and Transparency
In the spirit of full transparency, the results of the B Impact Assessment are published after certification and can be viewed on the “B Corp“ website. Companies must also include the commitments made in their corporate documents and publish them for monitoring by shareholders, employees, suppliers, customers, environmental organisations, and trade unions. In addition, there are regular background checks by B-Lab of public records on the companies, employees, products, and other relevant topics (reports, newspaper articles, rating portals) as well as random on-site visits.
Companies that have received the certificate must go through the certification process again every three years. For certification, a one-time submission fee and an annual contribution, which depends on the company’s turnover and its location, must be paid to B Lab.
The Incentive?
First of all, the incentive to participate in such a certification comes from the company’s own attitude towards its stakeholders. Ultimately, however, entrepreneurial incentives also play a role, such as satisfied and loyal employees and suppliers as well as a growing reputation and thus sales. The latter is particularly relevant in view of current, highly heated debates about environmental damage, climate catastrophes, occupational health and safety, exploitation and the general transformation of the economy towards a post-industrialised society.
In addition, like other business associations, participating companies, their employees, and suppliers have access to a range of benefits from external bodies and other members. Branding tools are provided by B Lab. In addition, many countries and banks offer the waiver or partial waiver of credits if companies take and maintain appropriate measures to sustainably expand their business models.
An advantage for companies but a disadvantage for consumers and suppliers is the lack of legal liability. If one violates the certificate, there is no legal recourse. Instead, the certification is revoked for an indefinite period. In part, however, this approach is also the goal of B Lab. On the one hand, the aim is to make it easier for companies to get started, to keep sanctions low in the event of a breach of the rules, and thus to convince as many companies as possible to participate. True to the motto – the more that participate, the more relevant the certificate becomes. Competition between companies and pressure from consumers are the key factors. If a company does not belong, it will be shunned.
On the other hand, it is important to only accept companies that are completely convinced of this demanding certification – this way, the certificate is not softened by half-hearted commitment and green-washing.
There are now over 3,600 companies in more than 65 countries, including the online search engine company Ecosia and Einhorn, a manufacturer of condoms based on sustainably produced natural rubber.
Outlook
Do we now end up with yet another new certification that further confuses us and leaves us alone with the real problems in the value chain? Not necessarily! Of course, we have to wait and see whether these tough guidelines will be adhered to by the companies in the long run, whether they will be softened over time by the B Lab-Committee in order to make the certificate more widespread, or whether enough companies will participate at all to give the seal the necessary prestige.
Nevertheless, a number of points suggest that these concerns need not necessarily materialise: B Lab is a non-profit organisation that does not gain any direct financial value from the dissemination of its certificate – the revenue goes directly into monitoring and paying staff. The stakeholder approach is not only increasingly classified in public debates as the right way for future and more sustainable business but is also placed at universities as the starting point for teaching business and economics to our young entrepreneurs. Sustainability and prudence are thus finding their way into our thinking in the long term.
Moreover, studies show that purpose-driven brands not only make more sense, but, also increasingly do better business. They grow twice as fast in comparison, investors like the powerful financial manager Blackrock already check whether a company has dealt with its sense of purpose enough before the money flows, according to their own statements.
Generation Y is now more concerned that a company improves society than that it makes high profits in the short term.
Blackrock CEO Larry Fink
Thus, it remains to be seen whether “B Corp” and other certification standards following this idea will ultimately prevail. The moral and monetary approach is there. But further control by consumers, suppliers, trade unions and environmental organisations will be necessary.
