IIDA Perspective - Spring/Summer 2016 - 25

Step-by-Step: How to Become a B Corp

MEET THE PERFORMANCE REQUIREMENTS

MEET THE LEGAL REQUIREMENTS

MAKE IT OFFICIAL

The first step to becoming certified is to complete
the B Impact Assessment questionnaire, which
asks companies to provide detailed information
about a variety of processes to ensure they meet
the required social and environmental criteria.
The questionnaire varies depending on a company's
size, industry, and location (there are roughly
40 versions).

The next step is meeting the legal requirements,
which vary depending on corporate structure
and state of incorporation. In some cases,
companies may need to amend governing
documents or adopt benefi t corporation status
to meet the requirements. If necessary companies
may need to engage their board members, legal
counsel, and/or investors about the usefulness
and implications of adopting legal changes.

Sign the B Corp Declaration of Interdependence
and Term Sheet. Each certification term is two
years, after which companies must re-certify.
Companies pay dues based on a sliding scale that's
related to annual sales.

The report scores four categories: governance,
workers, community and environment. Questions
ask for details on: how the business has worked
to develop social and environmental standards for
their industry, how they've ensured that their social
or environmental mission will be maintained over
time regardless of company ownership, if workers
are reimbursed for continuing education, the minimum number of days off employees are given, the
diversity of the company's employees, whether
paid time off is given for community service, what
percentage of energy is saved on a yearly basis
relative to company revenues, and what percentage
comes from on-site energy production.

Once the legal requirements have been met,
companies must obtain board approval and
shareholder approval of the planned amendment,
and if a corporation, file amended articles with
the Secretary of State within 1 year. In the event of
a change of control of the company, recertification
is required within 90 days.
Companies are also asked to confidentially
disclose any sensitive practices, fines, or sanctions.
They are also subject to background checks, which
can include a review of public records and news
sources on the company overall as well as the
executives/founders.

In addition, 10% of Certified B Corps are randomly
selected for an Onsite Certification Evaluation each
year. B Lab also conducts on-site reviews of all
wholly owned and publicly traded Certified B Corps
during each certification term at the company's
own expense. B Lab's goal for on-site review is to
review the accuracy of the company's responses
on the Impact Assessment, and generally involves
additional documentation, interviews with senior
management, and a brief facilities tour. Typically
on-site reviews result in a score adjustment-if
the adjusted score falls below the minimum 80
score required for certification, B Lab provides a
90-day period for companies to adjust, along with
recommendations for score improvements.

After completing the assessment, companies
receive an overall B Impact Report score, which
must be a minimum of 80 out of 200 points.
An in-depth review follows, which randomly
selects 6-8 questions and asks the company to
demonstrate those practices in more detail
through documentation.

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Table of Contents for the Digital Edition of IIDA Perspective - Spring/Summer 2016