The B-Lab, the non-profit organisation that awards B-Certifications to business enterprises, is in the driver’s seat of a global movement that is “using business as a force for good.” A company that aspires to become B-Certified and gain the ‘B’ brand association must achieve a verified score of at least 80 points on the B Impact Assessment, a 200-point diagnostic covering governance, workers, community, environment, customers, and a disclosure questionnaire. They must also meet the B-Lab’s transparency requirements and amend their corporate charter to incorporate the interests of all stakeholders into the fiduciary duties of directors and officers.
In less than a decade, the B-Lab has brought about a sea-change in the business world. The B-Lab’s network of “business leaders that seek to redefine success in business, so that one day all companies compete not only to be the best in the world, but to be the best for the world” feature global brands ranging from Patagonia to Natura Cosméticos SA. At present, there are over 3,000 B-Certified companies across 71 countries and momentum is building. This seems like great news. However, there is a caveat.
The B-Lab’s current stance on human rights compromises the fidelity of the entire movement and creates a situation where the B movement and the business and human rights (BHR) movement diverge rather than converge. Put another way, companies have the option to choose whether they want to focus on doing good and giving back, or on doing no harm and being accountable. This is a lose-lose scenario that weakens both movements.
Rather than stepping up as a champion of the business and human rights agenda, the B-Lab has taken a passive and at times even a regressive stance. In their eighteen-month probe of the B-Lab movement, Joanne Bauer and Elizabeth Umlas reached this concerning conclusion:
A company can reach the required minimum score of 80 (out of 200) without, for example, ensuring a core labor right like freedom of association and collective bargaining, or without conducting a human rights impact assessment, which is the bedrock of corporate responsibility for the BHR movement.
During the B-Impact Assessment process, companies encounter only a few mentions of human rights and none preclude certification. As a result, companies can become B-Certified even if they have done nothing to assess or manage their human rights impact. There is also nothing in the B-Impact Assessment to compel or require companies to commit to the UN Guiding Principles on Business and Human Rights (UNGPs) – the authoritative global standard for addressing and preventing predatory, inhumane, or otherwise harmful business-related activities.
This is a stance that the B-Lab acknowledges and defends. A document posted on B-Lab’s ‘Controversial Issues’ webpage responds directly to Bauer and Umlas’ findings. The three-page statement seemingly boils down to the following:
...the nature of the score is not about compliance, and while a company need not be “perfect” to achieve B Corp certification, they do need to demonstrate a sufficient level of performance on these aspirational metrics across all aspects of a company’s social and environmental practices.
The B-Lab’s current stance celebrates a “shared vision of the BHR and B Corp movements,” but stops short of making human rights due diligence a requirement of certification. As a champion of the business and human rights agenda and as a person who wants to champion the B movement, I feel compelled to make a case as to why the B-Lab is wrong and what could be done to correct course.
A good idea gone astray
First, the B-Lab is behind a global trend that they should be leading. One need not search far to find B-Certified companies that are not in alignment with the UNGPs. In this sense, many B-Certified companies have yet to meet a global norm that is not aspirational but foundational, based upon “the basic expectation society has of business in relation to human rights.” The ramifications of this apathy stretch far beyond the B-Lab. The entire ecosystem suffers. It is difficult to compel ordinary companies to take human rights seriously when their purpose-driven, socially-minded peers have yet to buy-in.
Second, the B-Lab aspires to “set the gold standard for good business and inspire a race to the top, which is upheld through the “most credible tool a company can use to measure its impact on its workers, community, environment, and customers.” Here is the problem. The B-Impact Assessment fails to meet the minimum standard of corporate responsibility, as outlined in the UNGPs. Seen through a human rights lens, the B-Lab has a serious credibility problem. The B-Lab’s current approach propagates a notion of ‘good business’ that treats affected individuals and communities as passive bystanders, rather than rights-holders deserving of accountability and agency. This kind of ‘good’ can readily become opportunistic and exclusive, leaving behind the people and issues most deserving of attention.
Does the B Corp model go far enough? The answer from the perspective of business and human rights is a resounding no.
Conceptually and discursively, the B-Lab is framing a scenario where a company can be a certified ‘force for good’ without recognising and respecting the human rights of people in their value chain. Doing good begins with mitigating and preventing predatory, inhumane or otherwise harmful business-related conduct. This does not happen through performative goodness or ticking boxes. This requires holistic, human rights-based efforts. Efforts that make the company accountable to affected individuals and communities. Efforts that confront harm and salient risks. And efforts that enable people to protect themselves, their interests, and one another.
Accountability and agency change the game. Responsible business conduct and sustainability are things that happen through people, not to people. Business and human rights prepare companies for stress tests, for unexpected shifts in personnel, politics, technologies, pressures, and circumstances. The B-Lab does not compel such readiness because the B-Lab has yet to make the paradigmatic and programmatic shift to recognise stakeholders as rights-holders and business enterprises as “specialized organs of society...that can have an impact on virtually the entire spectrum of internationally recognized human rights.”
Jay Coen Gilbert offered a thoughtful response to Anand Giridharadas work, which positioned the B-Lab as trapped in a larger elite charade. In the article, Gilbert concedes a number of points, challenges others, and concludes with a list of questions for the B Movement to consider. One question that Gilbert raises is: Does the B Corp model go far enough? The answer from the perspective of business and human rights is a resounding no.
A simple fix
Fortunately, there is a silver lining in the form of a simple fix. There is no need to reinvent the existing B-Impact Assessment. There is a need to add one, stand-alone, mandatory precondition of certification: alignment with the UNGPs. Business and human rights practitioners can readily assess such alignment by analysing qualitative signs of process and progress. This is not a measure of perfection, to respond directly to the B-Lab’s current stance on human rights. It is a simple – not an easy – fix that would require the B-Lab to bring business and human rights practitioners on-board. For two movements that are on the cusp of full-blown division, this is the ultimate win-win.
This article is hard on the B-Lab, yet it is meant as tough love. I, like many business and human rights practitioners, see the transformative potential of the B movement. It also seems that the same kind of companies that seek B-Certification would eagerly champion the BHR agenda if equipped with the necessary awareness and guidance. For companies that push back against the notion of respect for human rights being a precondition of certification, it seems apt to question whether the ‘Benefit’ tag is merited. The goal should be to build a bridge so that the BHR and B-Corp movements are interwoven. Such a bridge is well within reach.