New B Corp rules to tighten standards and rebuild credibility

For the first time in its 18-year history, B Lab, the non-profit behind the B Corp Certification, has overhauled its standards to enforce stricter rules and shore up credibility. The new framework, described by B Lab as a “complete reimagining,” replaces the previous points-based system with clear, mandatory requirements to ensure companies meet minimum benchmarks across critical social and environmental areas.

The changes, announced on April 9, come after years of criticism over the certification’s inconsistencies. Founded in 2007 as a gold standard for ESG practices, B Corp Certification now applies to over 9,600 companies across 102 countries. But cases like the Shell-Havas controversy, where French communications giant Havas lost its certification after working with the oil company, have raised questions about the integrity of the process.

Tougher standards across seven key areas

The new standards follow four years of consultation, during which B Lab collected 26,000 pieces of feedback from stakeholders in 67 countries, held 70 focus groups, and consulted 70 experts.

Under the updated framework, B Corps must meet benchmarks across seven specific impact areas. The previous system, which allowed companies to offset poor performance in one area with high scores in another, has been scrapped. The seven areas include:

1. Purpose and stakeholder governance
2. Climate action
3. Human rights
4. Fair work
5. Environmental stewardship and circularity
6. Justice, equity, diversity, and inclusion (JEDI)
7. Government affairs and collective action

The new rules also require companies to assess and mitigate impact across their supply chains, a complete departure from previous standards that largely ignored such issues and companies could offset poor performance in one area with high scores in another. 

Further, to maintain certification, continuous improvement and mandatory milestones at three- and five-year mark will be needed. Existing B Corps, which recertify every three years, will transition gradually to the new framework.

Addressing credibility concerns

The Shell-Havas controversy that dominated headlines in 2024 is a singluar example. Several high-profile controversies, like the issue with Nespresso's B-Corp, called the certification’s rigour into question. In 2022, Nespresso’s B Corp certification faced intense backlash due to allegations of human rights abuses in its supply chain. 

Duncan Meisel, executive director of Clean Creatives, the group behind the action on Havas for signing Havas' global media account, praised the update. "B Lab's new standards on polluting clients for B Corp agencies are an excellent step forward," he said. "The B Corp community is full of creatives who are deeply passionate about climate change, and it's clear that their voices have shaped this into a much stronger policy."

He added: "Under the new rules, agencies have clear guidance that steers them away from working with fossil fuel polluters, which will once again position the B Corp certification as the standard for forward-thinking companies on climate."

Global alignment with sustainability frameworks

The revised standards incorporate methodologies from established sustainability frameworks, including the Global Reporting Initiative (GRI), the European Sustainability Reporting Standards (ESRS), the Science Based Targets initiative (SBTi), and Fairtrade. This alignment strengthens the certification’s credibility and provides businesses with tools to navigate evolving regulatory requirements, such as the EU’s Corporate Sustainability Reporting Directive (CSRD) and the U.S. SEC’s climate disclosure rules.

Clay Brown, co-lead executive of B Lab Global, issued a statement to emphasis the urgency of the changes. “This isn’t merely an update; it’s a complete reimagining of business impact to respond to the challenges of our time,” he said. “B Lab’s new standards can serve as a roadmap for leadership on social and environmental issues when needed most.”

The B Corp movement has grown rapidly, with the number of certified companies more than doubling since 2020. However, this growth has raised concerns about whether the certification’s standards can keep pace with its expansion.

By introducing these stricter requirements, B Lab aims to address rising expectations from consumers, investors, and regulators. Judy Rodrigues, director of standards at B Lab Global, said, “The new standards are clear, ambitious, and truly capable of raising the bar for businesses worldwide.”