What Is a B Corporation?

A B Corporation (B Corp) is a company certified by B Lab, a nonprofit organization, as meeting rigorous standards of social and environmental performance, accountability, and transparency. Certification signifies that a business has been independently verified as balancing purpose and profit—considering the impact of decisions on workers, customers, suppliers, communities, and the environment alongside shareholder returns.

B Corp certification represents a fundamental challenge to conventional business assumptions. Traditional corporate law centers shareholder primacy—the notion that corporations exist primarily to maximize returns to shareholders. B Corps embrace stakeholder governance, formally committing to consider all stakeholders affected by business decisions. This isn't just philosophy; it's embedded in legal structure, operational practice, and third-party verification.

The B Corp community has grown from 82 founding companies in 2007 to over 8,000 certified B Corps across 90+ countries and 150+ industries. These range from small consultancies to multinational corporations, spanning sectors from food and beverage to financial services to manufacturing. What unites them is commitment to using business as a force for good—and willingness to be held accountable for that commitment.

Certification requires meeting performance standards (the B Impact Assessment), making legal accountability changes (benefit corporation status or equivalent), and committing to transparency (public disclosure of B Impact scores). Recertification every three years ensures ongoing accountability rather than one-time achievement.

Why B Corp Certification Matters

B Corp certification addresses a fundamental question: how do we know which businesses genuinely operate responsibly versus which merely claim to? In an era of greenwashing and purpose-washing, certification provides credible differentiation.

Third-party verification builds trust. Any company can claim commitment to sustainability, social responsibility, or stakeholder value. B Corp certification means an independent organization has assessed actual performance against rigorous standards. Verification replaces claims with evidence.

Comprehensive assessment reveals true performance. The B Impact Assessment evaluates governance, workers, community, environment, and customers—not just one dimension. Companies can't offset poor performance in one area with excellence in another. The assessment reveals holistic impact.

Legal commitment ensures durability. B Corps amend governing documents to require stakeholder consideration, protecting mission against shareholder pressure or ownership changes. Legal commitment outlasts individual leaders and survives transitions.

Community provides support and accountability. B Corps join a community of practice sharing knowledge, resources, and mutual accountability. The community reinforces commitment and accelerates improvement.

Market recognition creates competitive advantage. Consumers, employees, and partners increasingly prefer purpose-driven companies. B Corp certification provides recognized signal of genuine commitment, differentiating certified companies in crowded markets.

Talent attraction and retention improve. Workers—especially younger workers—seek employers whose values align with their own. B Corps attract mission-aligned talent and experience stronger engagement and retention.

Investment increasingly favors responsible business. Impact investors and ESG-focused capital specifically target B Corps. Certification signals the governance, transparency, and performance that responsible investors seek.

How B Corp Certification Works

1. Complete the B Impact Assessment Evaluate company performance across five impact areas:

• Governance: Mission, ethics, accountability, transparency, stakeholder engagement

• Workers: Compensation, benefits, training, ownership, work environment, health and safety

• Community: Diversity, economic impact, civic engagement, charitable giving, supply chain impact

• Environment: Environmental management, resource use, emissions, facilities, transportation

• Customers: Customer stewardship, product/service impact, data ethics, marketing practices

The assessment is free, confidential, and available online. Companies answer questions relevant to their size, sector, and geography. The assessment generates a score from 0-200.

2. Meet the Performance Requirement Achieve a verified score of 80 points or above:

• 80-point threshold: Minimum score required for certification

• Median business scores approximately 50: The 80-point bar represents significant above-average performance

• Points distributed across impact areas: No single area can carry the entire score

• Continuous improvement expected: Recertification requires maintaining or improving performance

3. Pass the Verification Process B Lab reviews and verifies assessment responses:

• Documentation review: Provide evidence supporting assessment answers

• Verification calls: Discuss practices and policies with B Lab analysts

• Site reviews: Random selection of companies undergo on-site verification

• Background checks: Screen for controversies, litigation, or disqualifying practices

• Disclosure questionnaire: Report any sensitive issues or practices

Verification ensures assessment responses reflect actual practice.

4. Make Legal Commitment Amend corporate governing documents to embed stakeholder consideration:

• Benefit corporation status: In jurisdictions with benefit corporation legislation, convert to or form as a benefit corporation

• Legal requirement amendment: Where benefit corporation status isn't available, amend articles/bylaws to require stakeholder consideration

• Board accountability: Ensure governance structure supports stakeholder-oriented decision-making

• Timeline: Complete legal requirements within specified period after certification

Legal commitment protects mission from future pressure to prioritize shareholders exclusively.

5. Sign the Declaration of Interdependence and Pay Certification Fees

• Declaration: Commit to B Corp community principles and continuous improvement

• Annual fees: Based on company revenue, ranging from several hundred to tens of thousands of dollars

• Term agreement: Commit to recertification process every three years

6. Achieve Certification and Join the Community

• Certification announcement: Receive certified B Corporation status

• Logo usage: Licensed to use B Corp certification mark in marketing

• Community access: Join B Corp community with access to resources, events, and peer learning

• Directory listing: Appear in B Corp directory with public score disclosure

7. Recertify Every Three Years

• Updated assessment: Complete current version of B Impact Assessment

• Continued verification: Undergo verification of updated responses

• Improvement expectation: Demonstrate ongoing commitment to impact improvement

• Standards evolution: Meet updated standards as B Lab refines requirements

Recertification ensures certification reflects current performance, not historical achievement.

B Corporation vs. Related Terms

Common Misconceptions About B Corps

"B Corps are nonprofits." B Corps are for-profit businesses. They generate revenue, can distribute profits, and may have shareholders. The difference is that they're legally committed to considering stakeholders beyond shareholders and verified as meeting social and environmental performance standards. Profit is permitted; it's just not the exclusive purpose.

"B Corp certification is self-declared." Certification requires third-party verification by B Lab. Companies complete the assessment, but B Lab reviews documentation, conducts verification calls, performs background checks, and conducts random site visits. It's independent verification, not self-certification.

"Any company can become a B Corp easily." The 80-point threshold represents genuinely high performance—median businesses score around 50. Many companies attempt certification and fail to qualify. Certification requires substantive operational changes for most companies, not just paperwork.

"B Corps sacrifice profit for purpose." Evidence suggests B Corps perform comparably or better than conventional peers financially. Stakeholder orientation can improve employee productivity, customer loyalty, supplier relationships, and risk management. Purpose and profit aren't necessarily opposed.

"B Corp certification is permanent." Certification requires recertification every three years with updated assessment and verification. Companies that fail to meet standards lose certification. It's an ongoing commitment, not a permanent status.

"B Corp is just greenwashing with a logo." The comprehensive assessment, verification process, legal requirements, and recertification create accountability that superficial sustainability claims lack. Companies have lost certification for failing standards. The rigor distinguishes B Corp from self-applied labels.

When B Corp Certification May Not Be Right

For companies whose governance structure can't accommodate stakeholder consideration—due to ownership constraints, investor agreements, or legal limitations—the legal commitment requirement may be prohibitive. Address governance barriers before pursuing certification.

If leadership isn't genuinely committed to stakeholder orientation, certification will be difficult to achieve and harder to maintain. B Corp requires substantive operational commitment, not just marketing interest. Authentic commitment should precede certification pursuit.

For companies significantly below the 80-point threshold, immediate certification isn't realistic. Use the B Impact Assessment as a roadmap for improvement, working toward certification over time rather than attempting it prematurely.

If the primary motivation is marketing rather than impact, certification may not deliver expected value. Stakeholders increasingly distinguish genuine commitment from certification-as-marketing. Purpose must be authentic.

Very large, complex corporations may find the certification process challenging given organizational complexity, though major corporations including Danone North America have achieved certification. Complexity requires more extensive verification but doesn't preclude certification.

How B Corp Connects to Broader Systems

ESG strategy aligns with B Corp principles. Companies pursuing ESG excellence often find B Corp certification validates and structures their efforts. The B Impact Assessment can function as an ESG framework for smaller companies.

Corporate governance evolves through B Corp's stakeholder model. The movement contributes to broader shifts in corporate purpose, influencing legal frameworks, investor expectations, and business school curricula beyond certified companies.

Supply chain sustainability connects as B Corps often prefer sourcing from other B Corps or companies meeting similar standards. B Corp supply chain requirements encourage sustainable practices throughout value chains.

Talent strategy benefits from B Corp's employer brand value. Certification signals to prospective employees that the company takes social and environmental responsibility seriously—increasingly important for talent attraction.

Impact measurement gets structured through the B Impact Assessment. The assessment provides a comprehensive framework for measuring and managing impact across all business dimensions.

Investor relations shift as B Corp signals governance and values alignment to impact investors, ESG funds, and values-aligned capital sources. Certification can improve access to mission-aligned capital.

Industry transformation accelerates as B Corp certification spreads within sectors. When competitors certify, pressure builds on remaining companies to meet similar standards or explain why not.

Related Definitions

→ What Is ESG Strategy?

→ What Is Stakeholder Engagement?

→ What Is Double Materiality?

→ What Is Impact Measurement?

→ What Is Corporate Sustainability?