Mulberry announced this week that it has received B Corp accreditation, stating that it achieved the certification “in recognition of our purpose-driven approach” and now it joins “a global community of like-minded organizations seeking to work with transparency and with accountability.” The British fashion group joins the likes of Richemont-owned Chloé and French resale company Vestiaire Collective, as well as Patagonia, Aesop, footwear brands TOMS, Veja and Allbirds, Gap Inc.-owned Athleta, $1 billion Carlyle Group-based BeautyCounter, Khloe Kardashian’s Good American brand, and Kendall Jenner’s 818 Tequila brand, among others, all of which boast B Corp status.
It is clear that a growing number of companies, including many in the fashion and luxury space, are angling to add B Corp to their credentials. To put it in perspective, in the last five years, the number of B Corp has nearly tripled to more than 7,800 businesses worldwide, spanning over 160 industries and 92 countries, the Los Angeles Times reported in December.
> The B Corp. certification system, created and maintained by B Labs, “provides third-party authentication of a business’s social and environmental performance. Applying businesses can become a B Corp if their performance on five dimensions – governance, workers, community, the environment, and customers – exceeds a certain threshold and they adopt a legal structure that mandates stakeholder considerations, such as the Benefit Corporation form,” per Harvard Business Review.
> In the B Lab certification process, businesses must sign a “Declaration of Interdependence,” committing themselves to using “business as a force for good.” A company must modify its governing bylaws to allow directors to “consider stakeholders besides shareholders in company decision-making,” and must also disclose information on “any sensitive practices, fines, and sanctions related to the company or its partners.” Once certified, companies are required to re-certify every three years.
As for what is driving companies to seek B Corp. status, business site Raconteur states that it is difficult, if not impossible, to “accurately calculate a firm’s return on investment in becoming a B Corp.” But in any case, some of the potential benefits at play “extend beyond simple financial gains for the business,” it asserts. As with other ESG and sustainability-centric certifications, there are a few obvious elements at play …
(1) Bottom-line benefits: According to B Labs data, B Corps were more likely than “ordinary businesses” to grow their revenue between 2019 and 2021. Coming out of the pandemic, B Corps were more resilient with 95 percent still operational in 2023 compared to 88 percent of non-B Corps, it found. Meanwhile, the turnover of the average B Corp in the UK grew by 26 percent between 2017 and 2020, compared with a mean of 5 percent for all businesses nationwide, according to B Lab UK.
(2) Attracting employees: B Corp. status may also give companies a competitive advantage when it comes to attracting and retaining talent. In addition to growing revenue, B Corps were more likely than “ordinary businesses” to have grown their worker base between 2019 and 2021, per B Labs. Raconteur found that there is “plenty of anecdotal evidence” to suggest that B Corp. status can help a company to attract “highly skilled people who are drawn to employers that demonstrably care about things other than the pursuit of profit.”
> This is worthy of attention given that ESG initiatives are considered important to more than 4 in 10 U.S. workers (41 percent), according to data from the Society for Human Resource Management. ESG is especially important to younger workers, namely, individuals born between 1981 and 2012, with 46 percent of Gen Z and 55 percent of Millennials saying ESG is important with regard to their employment.
(3) Impact on funding: Tooting its own horn further, B Labs claims that B Corp status can help companies to attract capital, with B Lab UK finding that 70 percent of B Corps that seek equity finance end up raising the amount they want, compared with 56 percent of all companies.
(4) Catering to consumers: And in what is likely the most significant driver of B Corp. demand among companies is what such a certification says to consumers. “Most adults … view [B Corp certification] as trusted and rigorous,” with 63 percent of adults in the U.S. and 71 percent of adults in Canada who were aware of B Corp Certification believe that the certification is making a positive impact,” per B Labs. This is significant in light of the fact that consumers are increasing voicing their interest in companies’ ESG initiatives, which can set companies apart from their competitors.
“Consumer preferences are evolving around buzzwords like ‘upcycled’ and ‘green,’” says sustainability intelligence provider Ecolytics. However, “well-intentioned buyers often do not know where to begin when seeking out truly ethical products,” which is where certifications like B Corp. and others come in. They provide a shortcut of sorts for consumers to identify companies that are doing work on the ESG front.
The draw of B Corp. status is not without nuances. As TFL has previously reported, B Corp certification “should indicate a company’s environmental performance, employee relationships, diversity, involvement in the local community, and the impact a company’s product or service has on those it serves, which can” – among other things – “help investors find companies that balance profit and purpose.” The reality is, of course, that B Labs’ standards are “not legally enforceable, and neither a company’s board nor the company, itself, is liable for damages if it fails to meet them,” per Bournemouth University professor Michael O’Regan. This arguably serves to take away a some of the strength of the certification.
At the same time, the Los Angeles Times reported late last year that B Labs has faced increased criticism as of late over its certification, being accused of greenwashing by allowing multinational companies to “do the bare minimum” to become certified. “Separately, labor unions and consumer groups have called on B Lab to decertify companies following lawsuits and complaints alleging labor violations and human trafficking. Some B Corps have also been accused of engaging in multilevel marketing and predatory lending,” the Times reported.
Such criticism has reportedly prompted companies like Dr. Bronner’s to consider dropping the designation due to a lack of robustness in the certification, with the company’s execs said to be toying with the idea of voluntarily doing away with their B Corp. badge. (As of now, the company remains a B Corp.)
> For fashion companies considering a B Corp. certification, it is worth contemplating just how much of a draw ESG-centric certifications are for consumers given the surging success of ultra-fast fashion giants like Shein and Temu and enduring demand for highly disposable wares. With this in mind, companies are likely looking at B Corp. status both as a way to draw in relevant consumers now (modern consumers are well-known to engage with companies in different segments of the market; this has been a recurring argument from Capri and Tapestry in the case the FTC is waging against them), as well as a way to reach them if/when they move on from throw-away fashion.
It is also worth mentioning that while B Corp certification does not change the legal obligations of a company or its directors, companies need to be careful to ensure that any certifications that they display to consumers (including voluntary ones) are up to date and that the underlying claims that they are making in connection with such certifications are accurate/can be substantiated in order to avoid false advertising or other claims. Dior comes to mind here, as it recently made headlines for displaying a sustainability certification on its website that was no longer valid. Similarly, the litigation that H&M has faced in connection with its use and promotion of the Higg Index is a good example of what could go wrong in relying on third-party certifications.
Even with the foregoing in mind, if Mulberry – which has been in need of a revamp for some time – is any indication, fashion brands still see value in the ability to display the B Corp. logo.