A B Corp, also known as a Benefit Corporation, is a type of for-profit company that is legally obligated to consider the impact of its decisions not only on its shareholders but also on its workers, communities, and the environment. B Corps are certified by the nonprofit organization B Lab, which assesses a company’s social and environmental performance based on a comprehensive set of standards. To become a certified B Corp, a company must undergo a rigorous assessment process that evaluates its performance across several categories, including governance, workers, community, environment, and customers. The assessment examines various factors such as employee benefits and engagement, supply chain practices, environmental impact, corporate transparency, and social responsibility.
By becoming a B Corp, a company commits to balancing its pursuit of profit with the achievement of positive social and environmental outcomes. This means that B Corps are legally bound to consider the interests of stakeholders beyond just their shareholders. They are expected to operate in a manner that benefits society and the planet, while still maintaining financial viability.
Note: B Corps are distinct from traditional corporate structures like nonprofit organizations or traditional for-profit corporations. B Corps combine elements of both by seeking to generate profits while having a positive impact on society and the environment.
On April 8, 2025, B Lab unveiled sweeping updates to its B Corp certification standards—the most significant overhaul since the certification’s inception. Departing from its long-standing points-based assessment model, the new framework introduces a set of mandatory requirements that companies must meet across seven core Impact Topics, ranging from climate action to equity and governance. This shift reflects a growing demand for greater accountability and clarity in what it truly means to be a responsible business.
With these changes, B Lab aims to reinforce the credibility of the B Corp badge, ensuring that certified companies are not only well-intentioned but are also delivering measurable, high-impact results.
1. Transition from Points-Based Scoring to Mandatory Requirements: Previously, companies needed to score at least 80 out of 200 points on the B Impact Assessment to achieve certification.The new standards eliminate this scoring system, replacing it with specific, non-negotiable requirements across seven critical Impact Topics.
2. Seven Core Impact Topics: Certified B Corps must now meet defined performance standards in the following areas …
> Purpose & Stakeholder Governance: Embedding a defined purpose and stakeholder governance into decision-making processes.
> Climate Action: Developing and implementing plans to limit global warming to 1.5°C, including setting science-based targets for greenhouse gas emissions.
> Human Rights: Identifying and mitigating potential negative human rights impacts within operations and supply chains.
> Fair Work: Ensuring fair wages, positive workplace cultures, and incorporating worker feedback into decision-making.
> Justice, Equity, Diversity & Inclusion (JEDI): Fostering inclusive and diverse workplaces and contributing to equitable communities.
> Environmental Stewardship & Circularity: Demonstrating environmental responsibility and contributing to a circular economy.
> Government Affairs & Collective Action: Engaging in responsible advocacy and contributing to public policy for a regenerative economy.
3. Foundation Requirements: All companies seeking certification must incorporate stakeholder governance into their legal structure; conduct a risk profile analysis to determine additional due diligence requirements; and avoid generating more than 1% of revenue from industries, such as fossil fuels, tobacco, weapons, and gambling.
4. Continuous Improvement Over Time: Certification is not a one-time achievement. Companies are expected to demonstrate progress over a five-year period, meeting initial requirements and then advancing to more stringent criteria in subsequent years.
5. Tailored Standards Based on Company Context: The new standards are adaptable, with specific requirements varying based on a company’s size, sector, and geographic location. This ensures relevance and fairness across diverse business models.
6. Shift in Performance Recognition: While the previous system highlighted high-scoring companies, the new approach focuses on meeting established performance thresholds. B Lab is exploring ways to recognize companies that exceed these standards, but the emphasis is on collective impact rather than individual scores.