Raphael ThysAre you being greenwashed by some B Corporations?
·
6 min read
·
Sep 19, 2023
- -
A selection of B Corporations. Image source: Rainbow Collection
In July 2023, Dutch e-commerce marketplace Bol.com announced it had secured B Corporation certification. The company, part of Ahold Delhaize, which owns supermarket chains across the world including Albert Heijn in the Netherlands, Stop & Shop in the USA and Super Indo in Indonesia, is the incumbent Amazon competitor in the Netherlands with 13 million customers and sales of over 5BN Euros. When I heard this news I was a bit surprised and more than a little curious. I’d known about the existence of B Corporations since 2008 when the first B Corps were certified. I knew the B stood for Benefit, meaning these were meant to be companies run for more than just the benefit of their shareholders, and with a legal obligation to prove that fact every few years. But I thought this was as good a time as any to take a deeper look at what this certification really is and how companies that have recently gained it are promoting it.
What does the B Corporation Certification mean?
Mission of the B Corporation. Source: Actimel
From the B Corp’s website,
B Corp Certification is a designation that a business is meeting high standards of verified performance, accountability, and transparency on factors from employee benefits and charitable giving to supply chain practices and input materials.
There are three things a company must do for this certification. First it must complete an independent impact assessment and score 80 points (it’s not clear out of how much, but it’s at least 250). There are five areas where a company can score points — Governance, Workers, Community, Environment and Customers.
The five impact areas. Source: B Corporation Australia
Secondly, it must make a ‘legal commitment’ to change its corporate structure to ‘be accountable to all stakeholders’, not just shareholders. This one basically means you have to add language in company documents stating that one of the purposes of the business is to have a positive impact on society and the environment in general. Furthermore, the company documents must state that the directors will consider the interests of stakeholders when making decisions.
Finally, the company must allow the information that the B Lab (the independent assessor) gathered about it to be publicly displayed on the B Corp website, in the name of transparency.
The certification is an ongoing commitment and each company must recertify every three years to keep their B Corp status.
So in summary, there are a variety of different ‘routes’ a company can take to be certified. B Corp states that the median score of companies that take their assessment is around 50. But looking at the way the assessment is made, a company doesn’t have to be great at all five impact areas, just one or two to achieve the 80 point threshold. That in itself is an issue, because it’s never clear which parts of the assessment each B Corp is particularly strong at unless you review their scores on the B Corp website. This opens up the opportunity for greenwashing.
Back to Bol.com
Impact score for Bol.com. Source: B Corporation
I compared Bol.com’s score of 81.2 on the assessment to some of the others. It’s obviously a low score, with 80 being the minimum, but the issue I found is that there is no way to compare companies based on their assessment scores. There used to be an annual list of the ‘Best’ B Corps but that was stopped in 2023 and all prior versions of it have been removed from the website. I looked for some of the names I suspected would have a high score. Patagonia scores 151.4, Ben & Jerry’s scores 96 but most other companies I saw are in and around the 80–90 range. What’s more interesting is the score breakdown between the five areas and how the company chooses to portray that. Bol.com scores a strong 30 points on workers and between 15–18 on other categories. It scores 6.6 on customers. Digging into it a bit further, we can see it’s because they pay everyone a fair living wage (this is mandated by the Dutch government) and they provide training and incentives for their employees, most of which are permanent workers. This is perfectly reasonable, and the score makes sense. That is, until you look at the press release that the company put out with the announcement of the certification.
In this press release, out of the eight initiatives the company highlighted, five related to environmental issues including using renewable energy and reducing packaging. These might be commendable initiatives, but they are not directly related to the achievement of the B Corp certification. It seems like a case of conflating two different issues to make it seem like their environmental credentials are what gave them their certification, which sounds great from a marketing perspective. Incidentally, their environmental score is 16.7/50. There was never any direct implication that their environmental efforts earned them the score, but they certainly didn’t deny it either.
Is there a trend of misleading press releases?
To check if this was a one-off I started looking at other recently certified companies and compared their scores to the content of their press releases. L’Occitane Group, the French cosmetic producer was also recently certified with a score of 85.4. Their scores were more evenly spread between workers, community and environment. B Lab said that L’Occitane’s commitment to biodiversity and sustainable value chain is commendable and aligns with B Movement interdependence principles.
L’Occitane Group’s Impact Score. Source: B Corporation
There were no major claims here about why the company had achieved what it did, but there was a cringy corporate video which you can watch here.
Next I looked at another recently certified company — Sanofi Consumer Healthcare North America, the drug manufacturer. This company scored 85 points, with a strong score in the workers and customers areas. Inexplicably, their press release literally states they achieved the certification because of six initiatives, the first three of which were environmental and two more which were community-focused. This seems to be purposefully misleading.
I did go through a few more companies of different sizes and found their scores and their comments on the certifications to be largely aligned. Banque de Luxembourg, for example, scored very poorly on the environmental criteria but very highly on workers and customers, which makes sense. Their press releases talked about inclusion and providing a diverse and inclusive workplace.
What’s the lesson in all this?
The B Corp movement has grown rapidly over the years with over 7,000 companies across the world now certified. This is not a movement that seems to be going away, and with good reason. Committing a company to strive for purpose along with profit is a simple first step to creating a more inclusive economy. However, with so many different companies taking so many different strategies or routes to gaining the certification, it’s important to know why a company was B Corp certified and whether those reasons resonate with you when you’re choosing a place to shop or invest, or a supplier or indeed a place to work. I do wish the certification was clearer, which would prevent companies from having the opportunity to engage in greenwashing. But ultimately, just like any certification, you need to know what it means before accepting or rejecting it. And that means putting in the work!