B Corp in 2025: What It Really Means for Purpose-Driven Business ft. Lauren Scott (The Resilience Report)

[Host: Lauren Scott] Welcome back, everyone to another episode of The Resilience Report. This one is a solo episode, and the way I like to use a lot of solo episodes is to dive deep into some of the questions that you send in. And one of the questions that I consistently get from listeners is, can I talk about the concept of B Corp companies? 

So some of you might be familiar with this name. You might be familiar with some of the brands. I'm personally wearing a Patagonia sweater for anybody who's watching this on YouTube. And we often associate this B Corp certification as a stamp of approval when it comes to being a more responsible company. 

It is a lot of work, and so there are a number of different leaders in the sustainability space that have reached out to ask me, is it worth it? We've actually had a number of different guests on the podcast who are our B Corp certified at their own companies, and they've shared a little bit more about this process. But what I want to do today is really talk about the state of B Corp, where we are in 2025, the risks and opportunities that come with it. Some of the numbers behind the growth globally. And then really what you need to keep in mind as a business leader, if you are thinking about implementing it at your own respective company. 

So let's start at a really high level again to explain what B Corp certification is and why so many companies are pursuing it when it comes to sustainability. 

So first of all, we all know that right now it's a little bit of a Wild West. It probably has been for about the past five years or so in terms of companies making sustainability claims, whether it is on the environmental, social or governance side of ESG, and where we've really seen deep value and appreciation is certainly through third party validation. There are a lot of claims that have been made over the past half, over the past five years or so, and we have definitely seen value with these more serious stamps of approval. 

So let's start things off at a really high level. If this is the first time that you are hearing the term B Corp certification, B Corp certification is certified by a third party nonprofit called B-lab. It is only issued to companies that meet specific standards when it comes to. Social and environmental performance. Accountability. And transparency. It signals that a company is both legally and operationally committed to making a positive impact for all stakeholders, not just shareholders, and really doing so in a way that balances both profit and purpose.

Who is the third party who validates B Corp certification? It is a third party nonprofit called B Lab who looks at the social, environmental, legal and transparency pieces of your business, has multiple criteria across the board that they then evaluate against and see if you can be certified. This is a certification that is also great because it's not one and done. You really do have to apply every three years. And in the next section, I'll talk a little bit about some of the more recent changes that have been impacting businesses. But every three years you have to apply again. It's quite a lengthy process where you're evaluated on different criteria, and you need to have at least a minimum score in these different areas. 

So just how prevalent is B Corp certification globally? We have actually just passed the nine thousand five hundred companies who are B Corp certified and that is across over one hundred countries globally. And one hundred and sixty industries. So that is actually close to representing one million employees globally. And yet it sounds like a lot of different companies have been certified, but know that almost forty percent of applicants don't actually pass the certification. So again, this kind of showcases the rigor that goes into securing  certification. We know that many companies now around the world are Bcorp certified. And yet when we've been speaking to past guests, they have been the first to say that the reapplication process for many of them that are already certified is actually changing quite a bit in 2025 and beyond. 

What has changed and why does this matter? If you are a leader tuning in, you're thinking of applying for  certification. Well, the number one thing is that B Corp is moving from a purely points based system to one where you actually have to have a minimum score in seven different categories. So these seven what they're called impact topics include: Purpose and stakeholder governance, fair work, JEDI (which is justice equity diversity and inclusion), Human rights, climate action, environmental stewardship, and collective action. So all seven categories now require a minimum score in order to secure the certification. So you can't really lean on points on one or the other sections, the impact sections. In order to necessarily be certified, you really do need to have that minimum coverage across the board. 

You might be asking yourself why is B Corp doing this? Well, certainly there are the changing regulations that are helping shape a little bit the approach of the organization. But then it's also really adding in this additional layer of credibility. We know that this is such a sensitive time when it comes to sustainability. I think a lot of people were feeling like there was a lot of greenwashing going on, and so we're certainly seeing some of the pendulum swing back when it comes to ESG. And so this is just adding that extra layer of rigor to make sure that those who are being certified are truly well rounded. 

Another point that is really important with some of these changes in 2025, is that the organization is looking for continuous improvement. So you can't really just get your score. And then every couple of years, every few years when you have to renew just get that same score. They really want to see that you're not resting on your laurels and that you're trying to make this progress with time, which I think is really where we're all trying to go when it comes to sustainability, is to see how we can have measurable improvements with time as we learn how to do things better.

So you might be asking yourself, well, what is the payoff? This is a lot of work and it sounds like it's only getting harder. So what is the value in it for me as a leader as I approach possibly pursuing B Corp certification? Certainly the business value is increasingly being tracked with the longer that B Corp is in place. So we're able to see the ROI of those organisations who are investing. It's not so much in the certification itself as actually meeting those minimum needs and criteria to be able to then be certified. So a good example of this is in the UK, because it is the number one market with companies that are B Corp certified. There's actually over twenty four hundred companies just in the UK alone that have pursued this certification. And what we're seeing is that the financial returns of those organizations who have pursued B Corp certification is actually higher than those that have not. This is true even more broadly in Europe, where we're seeing that the revenue growth of those B Corp certified companies far outweighs their peers when it comes to year over year revenue. It's always interesting also to see which companies are necessarily pursuing B Corp certification. You might imagine, and you're right in this case that it is a lot of B2C companies. So those where the consumer demand and pressure to have more responsible companies is coming into play. So we see this with food and beverage and apparel. But we're also seeing this now increasingly extend over into the tech and even the finance space. 

And of course, coming at this from the angle of The Resilience Report, there is certainly a link between resilience and those companies that are B Corp certified. Think about it. If you are looking at all of those different factors, the environmental, social governance, transparency, all those different elements and trying to continuously improve, you are essentially setting yourself up to be more resilient in the face of the various forms of change facing yourself as an organization. This continuous improvement mindset is absolutely what we need to look for as leaders and as companies moving forward, certainly in what will increasingly only be a time of change, is making sure that we are resilient and able to bend and flex based on those different environments. 

And I've talked about it time and time again, but from a talent perspective. So we definitely just heard from a revenue perspective, it can really play in our favor from both a revenue and a turnover perspective. However, this is also true in terms of attracting and retaining talent. Again, we know that the pendulum has somewhat swayed right now with ESG, but we're still seeing studies come out around the world where employees are still asking for companies to match their value system. So if we're working, whether it's a forty, a forty hour week or a sixty hour week plus, plus plus, we want to make sure that we're pouring our time and our energy into those organizations that we truly believe in. So for maybe right now, and we are back to maybe more of a hiring market versus the employee or the applicant market, we still know that from a retention standpoint, and turnover employees is absolutely always one of the most expensive things for a company. We know that things like B Corp certification can help rally the energy of your associate base in terms of working together. 

Of course, no system is perfect. So now let's look at the risks that kind of balance out the opportunities and see what those might be for businesses and leaders, especially in 2025 and beyond when it comes to  certification. So the number one thing is certainly my number one concern when talking to sustainability teams, which is the resource burden. We know that any application, especially when it's this thorough, requires a lot of time and energy. For example, if we're seeing it with other third party certifications like SBTi, which looks a little bit more at the emissions sector and just overall scope one, two and three, we know that come the time of year where your reports are due, it's all hands on deck. Everybody trying to get the information. This is very similar for B Corp certification, where you're going to be having multiple teams getting together and trying to get the data together. So very resource intensive. 

There's a little bit of reputational concern at the moment, because there were some companies that were pursuing B Corp certification that might have tainted a little bit their reputation, most notably in fast fashion. We saw a couple of companies go and pursue this, which certainly has made some, maybe the more strict followers of sustainability question the actual value. There's also the risk - we do know that this is true - that sometimes when you make those bolder commitments and claims, then sometimes there is a little bit of a reputational risk if you are not able to uphold that level of credibility moving forward. So I would say it's a little bit less so in that you have to put in the work before you get certified. But then as you move towards that recertification, it's certainly something to keep in mind. 

And then we also talked about some of the regulatory changes. We know that right now the pendulum is swinging a little bit. And so it's really trying to weigh “okay well is this absolutely necessary to have the certification if there's maybe a little bit of a regression in terms of sustainability criteria?” I would say that's to be taken with a grain of salt, because maybe while we're seeing ESG be a little bit less of interest in certain markets right now, this isn't meant to say that this is necessarily going to stay the same. We have historically always seen kind of ebb and flow. And so certainly I'd say the investments can just help you in that longer term. 

So while these challenges are really quite clear and honestly quite possible, especially, I'd say that resource component, let's really just look at how even with these risks and challenges, there are true opportunities for you and your business to pursue this year and beyond. 

So what are the opportunities? The first is I would say that while there are close to ten thousand companies now that are B Corp certified, there's absolutely an opportunity to still be a little bit more of a first mover. And that is particularly true if you are an industry maybe beyond B2C. I still think within B2C there is tremendous value of being one of those first companies to do so. And you do still get to lean into kind of that beauty sweet spot in that there are now ten thousand companies who are registered for it and certified with it that there's a little bit of brand equity in terms of the general public understanding what that certification means. And yet at the same time, it's not everybody who has it. So there is that first mover advantage opportunity. 

Another great opportunity is to use B Corp certification and its criteria as a little bit of a guidepost for you and your company. So you can actually use it to diagnose where your organization sits right now in terms of some of these important criteria. This can help set you up for success, obviously with the application itself. But then just overall best practices of your organization. I've heard a term from one of our previous guests who actually referred to this as “B Curious”. And they were saying that this is when you just kind of want to dip your toe in terms of  certification, that there are a lot of local chapters that you can actually go get more information from before you do the full application process, where you can hear a little bit about what worked for them, and maybe some of the tips and tricks that they can help you with.

Another great opportunity that you might not be thinking about is you can actually access the full ecosystem of B Corp certified companies. What you tend to see is folks who have successfully secured certification are often the first who really want to extend a hand and be able to support others who are interested and who then want to be certified itself. So through B-lab or through the B Corpo certification, you're able to access all of these other companies to learn from them and kind of to share best practices.

If you are a business or a leader looking to pursue  certification, some of the first opportunities really are to use it as a diagnostic tool to really assess where you stand as a company right now. Map some of the governance and legal changes that you might need to take. And then use a certification as your resilience roadmap. See where your strengths, where your weaknesses are, where you can continue to see that improvement throughout to make sure that you are taking into consideration the full realm of sustainability initiatives when it comes to your business. 

So just quickly to recap: B Corp certification is increasingly a third party validation out there that companies are leaning into and consumers are turning toward to ensure that they are supporting companies that are in line with their values. We do know that B or that  certification continues to grow globally around the world, with certain markets like the UK driving those initiatives. We also know that it's getting a little bit more challenging to secure the certification. This is both good and bad. Maybe not even bad, but more challenging. We know that the good side of it is that consumers, again, are becoming more familiar with the certification itself. The challenge we are seeing is that perhaps at least the old way of B Corp was being applied to some companies that were a little bit questionable in nature. So this is probably some of the factors that are leading to this tightening up of the certification process itself, which we know in turn has its risks and opportunities. We know that because it is now becoming a little bit heavier of a certification, even for those companies who are just going to go recertify. We know that it is a little bit harder. This can be a bit taxing on human resources. But again, the organization B Lab, who is organizing all of this certification, knows that by doing so, it's not only helping us as companies to be more resilient going forward through these more stringent practices, but it's also allowing us as consumers to be able to truly trust their stamp of approval. Furthermore, with this new model of the minimum score across those different impact areas, as well as the need and requirement for continuous improvement will help us all collectively be more balanced across the board and continue to pursue and do better as we know better. 

So I hope this helped learn about  certification. Again, this directly came from a podcast listener question who wanted to know: is it even worth it doing it in 2025? Hopefully this gave you a little bit of background as to the positives, maybe some of the challenges and what's been changing. If you're hearing some of your friends who are working with B Corp saying 2025 is getting a lot harder. Now you understand why. You also understand why the organization itself is doing it.So hopefully this gives you a more informed decision to be able to explore. Again, you can go back to that concept of “B-Curious” with regards to B Corp, and you can do a little bit of research in your own neck of the woods to see what organizations are available there for you to dig into. You can also do a self assessment using their criteria. Do a diagnostic at your own company to see where you would stand even prior to doing the certification. It can help you see maybe where some of your blind spots are right now that you can pursue as an organization. And then if you do decide to pursue it, you then get access to this brilliant deep network of like-minded organizations all around the world, because we know that sustainability is one where we really do have to work together. So it is a great opportunity for you to explore that with like minded organizations. 

If you have other concepts that you would like me to dive into, please do not hesitate to reach out. You can find me on YouTube, LinkedIn, and Instagram where you can submit your questions directly. Until next time!