Is B Corp certification greenwashing?
We’ve now been a B Corp for four years so this is a subject close to our hearts and one we’re open to debating.
What is greenwashing?
According to Wikipedia:
Greenwashing is a form of advertising or marketing spin in which green PR and green marketing are deceptively used to persuade the public that an organization’s products, aims, and policies are environmentally friendly.
What is a B Corp?
B Corps are a form of business that commit to considering planet and people alongside their aim of making profit for shareholders and owners.
This is a fundamental break from the traditional business world where making money for the owners (“shareholder primacy”) is the main objective of the organisation.
If you register a new business with Companies House in the UK, the default Articles of Association will compel you to put shareholder profit ahead of all other considerations. It’s the law. Preserving the environment is not.
So, the ethos of B Corps is a big challenge to the traditional business world.
Any business can become a B Corp. You just need to score at least 80 points in the B Impact Assessment (BIA) that’s freely available on the B Corp website.
It’s a rapidly growing movement but still there are fewer than 2000 B Corps in the UK. The certification is tough and a big barrier to entry, deliberately so.
Those achieving 80 points do so across five criteria, of which one is the environment. B Corps also need to demonstrate credentials in areas including Community and Workers.
So, any reference to greenwashing fails to reference the other four criteria that B Corps certify against.
Why would anyone object to B Corps?
It’s worth reiterating that B Corps, and the ESG (environmental, social, governance) movement more widely are a threat to some established organisations.
On a national scale, countries like China and Australia prefer to justify continued coal and mineral extraction rather than leave wealth underground. It’s good for votes.
Oil companies bear the brunt of attacks from climate campaigners, but many other industries have less than perfect records too. VW and BMW were both fined substantial sums by the EU for misreporting vehicle emissions over many years.
Others simply have an ideological dedication to free trade, believing that markets will always decide. Any suggestion of central government meddling to incentivise green initiatives sits uncomfortably with them.
So there’s always a context to criticism of B Corps. Some people and institutions would prefer them to fail.
That said, B Corps are far from perfect and it’s worth looking at some reasons why.
What do people think is wrong with the B Corp movement?
1. It needs scale. The B Corp mission is to drive system change and to drive it at scale. To do this we need to bring big organisations on board to influence political leaders. At Sales Untangled, we’re passionate about being a B Corp but have to accept that our voice is too small to be heard alone.
The problem with achieving scale is that corporations in industries with mixed reputations can become B Corps. You wouldn’t be alone in asking how Nespresso can be a B Corp after filling the world’s homes with plastic coffee containers.
Change can only be achieved at scale if we work with organisations like Nespresso to change the system. Standing outside shouting at them simply doesn’t work.
2. The green economy is imperfect. The Industrial Revolution started in the 1760s, yet it took until 1825 before the first journey by steam train. It’s easy to fall into the trap of thinking the perfect green economy exists. It doesn’t and we’re trying all sorts of initiatives in the knowledge some will work and others fail.
It’s the VHS/ Betamax argument all over again. What we do know is the planet is warming and something needs to change. Waiting for the perfect answer will take too long.
Very few people in the B Corp movement claim to have the perfect answers on this. But faced with the choice of taking the initiative and encouraging engagement – or sitting on the sidelines – the movement has chosen to act.
3. Uneven points scoring. To become a B Corp you need to score 80 points across five criteria. It’s possible in theory to score heavily in certain areas and fall short in others.
The case often cited here is Brewdog, who were caught up in a disastrous employee relations problem after becoming a B Corp. In a way this is the example that proves the rule since Brewdog are no longer a B Corp – so you could argue the governance system works.
Critics of B Corps love to jump on this points variation as a weakness in the system and in fact, B Lab (the governing body for B Corps) are likely to make changes to this in future.
The reality is that this points argument is usually moot. You’d have to be a particularly cunning organisation to have damaging policies in one part of your business whilst excelling in others. Dirty businesses are usually questionable in more ways than one.
4. B Corps make mistakes. Some critics of B Corps do love to jump on mistakes in an attempt to discredit the movement. The public spat over Nigel Farage’s bank account with Coutts in 2023 was a prime example of this.
Driven by a misguided sense of justice, Coutts refused Farage a bank account and their CEO leaked the story to a journalist.
Our first reaction to the story was that it sounded inappropriate for a bank to sanction its account holders. Not when they are on the right side of the law. So it proved when Alison Rose stepped down as CEO in the wake of the scandal.
But it’s conflating the issue to suggest this has something to do with the B Corp movement. B Corps are run by humans, who as individuals sometimes make mistakes.
5. B Corps mark their own homework. As we said earlier, you certify as a B Corp by achieving 80 points in the BIA. You don’t actually mark your own homework.
B Corps are obliged to recertify after 3 years. It’s one important way that standards are maintained. This was quite an anxious process for us as the standards are constantly being tightened and we wanted to ensure we retained the certification.
It wouldn’t have been worrying if we were in charge of the marking!
In fact, this complaint is like saying degrees from Oxford University are of no value because they are marked by Oxford professors. Or accountants can’t add up because they are only certified by an organisation of chartered accountants.
The BIA is regularly referred to as the “gold standard” of ESG certifications. It’s not perfect and we’re all striving to improve it. But it’s the toughest one out there and until something else betters it then it’s more quantifiable than the alternatives.
So, can B Corps be accused of greenwashing?
You probably knew before reading this post that our answer is: Obviously not!
Firstly, with 5 criteria to score against, it’s a very narrow criticism to make of B Corps. And those criteria are transparent. Anybody can download the BIA from the B Corp website and make their own assessment.
It’s undeniable that the B Corp standards are not perfect. But we’d argue that they are an imperfect solution in what is a very messy world. Until something better comes along, they remain the best available benchmark of ESG standards.
Does this sound defensive? Actually, we welcome the scrutiny. The perfect green economy doesn’t exist yet, so all of us are faced with the choice of trying something different or doing business as usual. You too have that choice.
Read more on this topic on the BBC’s website.