020 7812 1460
Search
We look at the evolution of the B Corp certification in response to criticism and rapidly changing global challenges.
“We’ve always been committed to providing well considered financial advice for the long term. As a business, we’re also proud that our environmental and social responsibilities have been fundamental to our identity.” says our Managing Partner, Steve Pyne.
This commitment was formalised by Holden & Partners in 2020, when we became B Corp certified. This recognises companies that meet high standards of social and environmental performance, as verified by the nonprofit B Lab. We’ve since recertified with improvement in 2023, and we will be publishing our latest Impact Report later this month.
However, as the B Corp scheme has gained popularity, it has also faced criticism and accusations of “corporate greenwashing.” 1 Indeed, some multinationals achieved B Corp status when significant areas of their operation could be considered contrary to the ethos.
The original scoring system allowed companies to offset weaknesses, or indeed failure, in some impact areas by excelling in others. Critics argued that this amounted to buying legitimacy and could be misleading to consumers who trust and seek out the B Corp brand.2
For example, in 2022, a group of B Corp-certified coffee companies called out newly certified Nespresso’s “abysmal track record on human rights” and “extractive business model”.3 This was followed by the workers from British B Corp brewery Brewdog alleging a bullying “culture of fear.” More recently, in January 2024, B Lab launched a formal investigation into the B Corp status of four media agencies linked to fossil-fuel multinational Shell.4
This wasn’t the only challenge facing B Corp. From economic instability to rising right-wing populism, climate backsliding and geopolitical conflict, the global context has reduced the political capacity and will to focus on sustainability.
So more than ever, a reliable, credible and trustworthy framework is needed, to support businesses to step up and bring genuine action on ethics and environmentalism. This is why B Lab has introduced new, more robust, standards, that respond to the criticism and the global situation.
New standards
The new standards represent the biggest overhaul for B Corp so far in its 19-year history. The existing flexible points-based system will be replaced with ‘mandatory minimum thresholds’ across seven critical areas. This ensures a consistent baseline performance.5
The seven critical areas span climate action, governance, human rights, fair work, inclusive hiring, policy engagement and the circular economy. For the detail, look here.
Businesses will be required to demonstrate continuous improvement towards milestones and targets. This was encouraged before but is now necessary in order to achieve recertification.6
Rather than just rely on a business to provide their own evidence, there will now be independent specialists, contracted by B Lab, to review a portion of the applications. This will keep standards high and ensure consistency and fairness. Checks will be random, or targeted if any red flags arise.7
The process of identifying those higher risk companies (for example in controversial industries, less regulated locations or with complex supply chains) will be made easier with a new risk profiling tool.8
Responding to the criticism about multinationals, firms with over 1,000 employees or over $350 million in revenue will now face enhanced requirements. This reflects their broader impact and influence and includes more detailed due diligence and analysis of supply chains. There are different provisions available for parent and subsidiary companies, but transparency in these cases will be critical.
A background of increased regulatory scrutiny
The new B Corp approach is timely, important and appropriate in a time of rising ESG scepticism and increased regulatory scrutiny.
New greenwashing rules came into force last year and you may remember a previous update on the FCA’s Sustainability Disclosure Requirements (SDR). As part of the regime, four investment labels for financial products with sustainability objectives have been available since July 2024.
However, following industry feedback, the FCA has confirmed that “it is not the right time” to apply SDR rules to portfolio management. That part of the framework remains under review for the foreseeable future.9
We’ll stay up to date with the changing requirements of both regulation and our B Corp commitment. Certification under the new B Corp standards begins in 2026 and will be phased in.
In fact, Holden & Partners are likely to be one of the first wave of businesses due to recertify. We’re proud to remain at the forefront of green and ethical action. As B Lab says, “Progress doesn’t come easy. But isn’t that the beauty of it?”
1. As greenwashing soars, some people are questioning B Corp certification – BBC Worklife
2. New B Corp rules unveiled after critics allege greenwashing
3. The B Corp Standard is at Risk – Fair World Project
4. Havas B Corp status at risk after Shell win and open letter triggers official probe | The Drum
5. Explore B Lab’s new standards
6. Explore B Lab’s new standards
7. A new dawn for B Corp: Greenheart’s guide to the new standards – Greenheart
8. Summary of the changes to the B Lab’s New Standards : Support Portal
9. CP24/8: Extending the SDR regime to Portfolio Management | FCA
