What do veggie producer Bonduelle, coffee company Nespresso and skincare and toy company Radio Flyer have in common?
They’re among the latest members of the relatively exclusive but growing cohort of about 90 multinational companies to earn certified B Corporation status by submitting to a rigorous assessment managed by nonprofit B Lab.
In the scheme of things, that’s still a small slice of the movement, which includes a global community of 6,400-plus businesses representing a wide range of industries. But they, like famous B Corp denizen Danone — which aims to have all of its operating companies certified by 2025 — believe B Corp Certification is a beneficial tool for continuous operational improvement, a means of measuring impact and a way of creating a sense of purpose for employees. The number is growing fast: When Nespresso was certified in April 2022, there were 4,500 B Corps.
A top Danone executive reflecting in late 2022 on its B Corp journey said the company’s status has been an important competitive differentiator. "The extent to which we can gear our business to multiple stakeholders really is the unlock for growth. That has been important for our business for the past couple of years," said Shane Grant during a B Lab conference session in December. Grant was promoted in January to group deputy CEO at Danone, CEO for the Americas and executive vice president for dairy, plant-based and global sales. He was previously focused on North America.
Danone, which first certified its North American business in 2018, has B Corp-certified 70 percent of its companies — and is working on its second recertification in North America. The accreditation is particularly important for Danone’s employees globally, Grant said. "Part of the competitive advantage is people, and do you have a people advantage? The B Corp Certification is a massive fuel for our people. It’s a massive pride point. It’s a huge recruitment and retention vehicle."
First, a brief level-setting before we get too much deeper. Danone and the other companies in this article have specifically earned a certification through a voluntary assessment managed by B Lab. Becoming a benefit corporation is a separate legal process by which a for-profit company changes its articles of incorporation to recognize additional stakeholders. While the two structures have similarity of purpose — B Corp also has legal requirements — the two aren’t exactly the same thing.
But in both cases, the shift in operating ethos needs to come from the top, observed Gretchen Grani, vice president of ESG at Bonduelle, which announced its certification for Bonduelle Fresh Americas in December. She has been working with Certified B Corps for 11 years and described the two-year process for Bonduelle Fresh Americas as "rigorous." (The plan is to have the rest of its operating companies certified by 2025.)
The extent to which we can gear our business to multiple stakeholders really is the unlock for growth.
Grani said the drive to embrace the process was championed by the company’s board of directors. Within its Americas business, the CEO addresses B Corp strategy in every employee gathering, she said. "Our CEO really championed this. He felt that because we were bigger, we could use our voice to get the message across first about the benefit to the company and value to stakeholders," Grani said.
Nespresso, an operating unit of Nestlé Group that celebrated the first anniversary of its initial B Corp Certification in April, looks at the designation as a "validation that we are, in fact, doing the right things," said Anna Marciano, vice president of sustainability for North America at Nestlé, and general counsel and head of sustainability for Nespresso USA.
Like Danone, it has experienced a positive impact among employees, who appreciate working for a recognized, purpose-driven company, according to Marciano. It took Nespresso USA about three years from the start of its data-gathering to earn its certification. She said the process had many internal benefits, such as providing more criteria with which to evaluate and manage supply relationships.
And although the process itself is onerous, it provides sustainability professionals and line-of-business executives with many valuable insights, Marciano added. "If you have no intention of being certified, even looking at the assessment gives you a good framework to operate in the right way."
B Lab would love to see more large enterprises and multinational corporations embrace that mindset. Just Salad, which has 70 locations in the Eastern U.S. and announced its certification in April, views the process as a framework for its overall ESG strategy — it’s still relatively small compared with the other "big" companies to recently earn accreditation. "We saw it as a third-party set of standards, guardrails and metrics that would give us the most rigorous platform for years to come," said Sandra Noonan, chief sustainability officer at Just Salad.
"B Corp certification is for all companies and when multinationals show up as having interest and having positive impact, we are open to that," said Jorge Fontanez, CEO of B Lab U.S. and Canada. "We believe in economic systems change, and we believe that one path to get there is by ensuring that our community of certified B Corps includes companies of influence."
The ripple effect on the supply chains of large corporations could, indeed, be significant, Fontanez added. "It’s necessary for us to think about the supply chain impact of large companies especially … We are working to mobilize companies toward action. Our role is to be a conduit for companies to work collaboratively."
Some smaller B Corps, such as carbon accounting startup Sustain.life, view this as a positive evolution. "For us, when a large company makes a sustainability commitment, those policies and requirements have a ripple effect that goes through their entire supply chain," said Annalee Bloomfield, CEO of Sustain.life, which started working toward a certification before it even had a name. "Through all of that, they can encourage their suppliers to embrace those practices."
B Lab made a deliberate decision to raise the assessment bar for multinational companies. It called on a group of external advisers to help shape the requirements, and it set up a program called B Movement Builders Mentors to guide multinationals through the process. (Danone and Natura & Co., the first public company to be certified back in 2014, are among those providing mentorship.) It did these things, in part, to assuage concerns among smaller companies that the inclusion of more bigger companies is diluting the original mission of B Lab — to recognize purpose-driven businesses organized to honor the interests of customers, partners, employees and other stakeholders.
"It’s incredibly accessible. Any company can become a B Corp," economist Erinch Sahan, who works with Doughnut Economics Action Lab and is a long-time follower of the B Corp program, told the Financial Times in early 2023. "It is its biggest strength, but also its biggest weakness. It doesn’t require the big changes in business that we urgently need."
B Lab positions its focus on recruiting multinationals as a way to potentially change large industries — food and advertising/marketing research are two of the biggest sectors in the U.S. — and to affect capital markets. "Even small incremental improvement on the practices of large multinationals through the use of our measurement tools will have substantial positive impact," notes B Lab on its website for the initiative.
The assessment and requirements for larger companies build on the process for smaller organizations by requiring each individual operating subsidiary to submit data. There is a one-questionnaire-covers-all approach for parent companies, but B Lab says this comes with higher upfront costs. (As an example, the application fee for companies with between $100 million and $500 million in revenue is $2,000; it increases from there.)
The current B Corp Certification process (there’s an update pending) requires companies to earn a minimum score of 80 points across hundreds of questions within the free B Corp Impact Assessment tool. Bigger companies with more than $1 billion in annual revenue also need to publish a comprehensive annual impact report, provide a "transparent" materiality assessment, prove that material issues are managed by the board of directors, offer information about their tax philosophy and lobbying policies, and have a specific human rights strategy, also overseen by the company’s board.
"It is more difficult. That process includes a private phase where we are working with them to do an assessment of risk, to determine whether they could actually meet the standard," Fontanez said.
Not for the faint of heart
It takes massive coordination across every corporate function — from human resources and rights to marketing to legal policies to sourcing strategies to financial management to environmental policies and beyond — according to sustainability professionals and others who have led the process for their companies.
It took engaging with literally hundreds of people within Danone and its stakeholder networks to gather the "significant evidence" needed to complete the company’s certifications, said Melanie Chow, vice president of mission and sustainability at Danone. Because the company is working to certify all of its operating businesses separately (11 entities so far), it created a global team to establish and manage key performance indicators, metrics and best practices, she said. And Danone is working on its second recertification for North America.
"I think about recertification as this holistic opportunity to take a step back … and think about how far have we come, what have we done?" Chow said. "We are using this as an opportunity to assess not just where [we] are with B Lab but also where [we] stand as a company as a whole, how are are thinking about driving impact."
Danone uses the questions to benchmark for the future and seek areas of improvement, she said. It also uses the certification process to encourage change among its suppliers: It borrows criteria related to the B Corp assessment to screen and select potential partners. "We want to benefit local companies where our suppliers are located through the work we are doing with them," Chow said.
Bonduelle also managed its certification as a cross-functional exercise, one closely scrutinized by its board and CEO. "It’s really about getting into the plant. Getting out into the fields. Having buy-in at the very top level," Grani said. The process benefits from having one dedicated individual who can stay accountable for keeping things on track, she added.
It’s really about getting into the plant. Getting out into the fields. Having buy-in at the very top level.
For Bonduelle, earning the certification triggered a number of new processes across the business that were adopted as a matter of course — another reason all teams need buy-in along the way. For example, the company reevaluated the procedures for identifying and reviewing issues in its plants, it introduced a new KPI related to its regenerative agriculture program, and it adjusted its supplier engagement programs to include information about B Corp philosophies as part of onboarding.
The process also resulted in sweeping new policies for Just Salad. The newly certified company has unleashed an expansive training initiative for all employees. Noonan said Just Salad also fast-tracked some practices it was considering for the future, such as tying manager performance appraisals to specific ESG metrics as part of the annual review. "This is a now or never moment," she said. "We are at the right size that this can still get done."
What’s next for the B Corp movement?
Even as interest among large companies grows, B Lab is finalizing new standards scheduled to take effect in 2024. In particular, the organization seeks to address criticisms that the current system doesn’t require a minimum score across the five core areas that it addresses: governance; workers; community; the environment; and customers.
The proposed shift will see B Lab move toward an approach under which companies must meet certain minimum requirements on topics "that define leadership on social, governance and environmental business impact." The concept of climate justice will also gain far more weight, Fontanez acknowledged.
"The focus is on giving organizations more clarity about where to focus on what matters most," he said.
The draft of the B Corps Certification standard emphasizes the need to meet minimum thresholds across 10 areas:
- Purpose and stakeholder governance
- Worker engagement
- Fair wages
- Justice, equity, diversity and inclusion
- Human rights
- Climate action
- Circularity and environmental stewardship
- Collective action
- Impact management
- Risk standards
The B Corp representatives I interviewed spoke positively about the forthcoming changes, which remain under review and will be phased into use beginning next year, saying they represent an opportunity for continuous improvement. B Lab is testing the approach. It expects to publish an updated draft in June, with a second public consultation period planned for September and October and a final review for December.
"I think it is completely 100 percent appropriate for the standards to evolve, certainly, as the state of affairs in our natural world and ecosystems worsens," Noonan said.