Glasgow Tech Week - the rise of the technology B-Corp

There is becoming a heightened awareness in the technology industry that business should be beneficial to more than just the consumer – it should benefit their people staff and the planet too. With that in mind, many technology companies have chosen to go down the B-Corporation route as it aligns with their values. It also promotes their brand and increases their consumer loyalty. Due to environmental and social awareness rapidly increasing, the little B logo on product packaging or on a website is becoming something of a necessity for many consumers. There are now more than 1,800 B-Corps in the UK, across 58 industries. More than 600 of these companies are tech-based.

What is a B-Corp?

A B-Corp (or Benefit Corporation) is a company verified by B-Lab to meet high standards of social and environmental performance, transparency and accountability. Essentially, the companies must have shown they use business as a source of good. They must be dedicated to transforming the global economy to benefit people, communities and the planet. B-Lab’s vision is to create a global economy which uses business as a force for good and each business must be purpose driven.

How to achieve B-Corp status

The process to becoming a B-Corp is rigorous, comprehensive and challenging, not to mention time-consuming. The certification verifies a business is meeting high standards of social and environmental performance, transparency and accountability, so it is bound to be a difficult, yet extremely rewarding, process. Here is an overview of the step-by-step process:

• Step 1 – Start getting serious about the mission. The company will have to put in the effort to meet rigorous environmental standards.
• Step 2 – Complete the B-Impact Assessment. This is around 200 questions about the positive impact on workers, suppliers, communities and the environment. The certification requires a score of 80 or more.
• Step 3 – Improve the B-Impact Assessment score. It’s very rare to achieve the required 80 points on the B-Impact Assessment the first time around, and often takes some improvement to continue to the next steps.
• Step 4 – Make the legal change. Once the B-Impact assessment has been passed, then there is a requirement to amend the company’s governing documents.

The B-Impact Assessment (BIA)

The B-Impact Assessment is the assessment that companies need to meet to become a B-Corp. The structure of the BIA is tailored to the size, sector, and location of the company, and these three factors will influence the types of questions found in each of the assessments, but the structure is similar for any version. To begin with, the B-Impact Assessment is broken into five distinct impact areas, representing the company’s governance: workers, community, environment and customers.

1. The workers’ area evaluates a company’s contributions to its employees’ financial security, health and safety, wellness, career development, engagement and satisfaction.
2. The community area evaluates a company’s engagement with, and impact on, the communities in which it operates, hires and sources. Topics include the likes of diversity, equity, economic impact and supply chain management.
3. The environment area evaluates a company’s overall environmental management practices as well as its impact on the air, climate, water, and biodiversity. This section would also recognise companies with environmentally innovative production processes and those that sell products or services that have a positive environmental impact.
4. The customer’s area evaluates a company’s stewardship of its customers through the quality of its products and services, ethical marketing, data privacy, security and feedback channels. This section would also recognise products or services designed to address a particular social problem for, or through, its customers.

Each of these impact area sections is broken down further into two main types of questions. One that evaluates the impact of a company’s operations, and business model questions looking at the impact of the shareholder.  The scoring within the assessment is designed to allow comparability and to identify and track opportunities for improvements over time. This is why it can be an onerous, yet rewarding, process.

The legal aspects

Now we have discussed what a B-Corp is and how to get there, what legally must happen to allow certification? There are five steps which need to be completed to make the legal change:

1. The Board of Directors must review the legal requirements and ensure they are aware of any changes.
2. The internal shareholders must be engaged – the Directors then must circulate the legal requirements to them for review and feedback.
3. This is all then approved by the Directors through Board Minutes of a meeting that involves the shareholders, where they will propose the Written Special Resolution.
4. The Articles of Association are then amended by the passing of the Special Resolution – these need at least a 75% shareholder majority to be approved.
5. Finally, you need to file the relevant documentation on Companies House – this would include a Form CC04 (which will notify the change of company’s objects), the amended Articles of Association and the Special Resolution.

You are then legally a B-Corp.

Conclusion

The B-Corp movement is on a mission to transform the economy for the better, and it is evident that many in the tech industry are eager to attain the accreditation. As one of Scotland’s leading advisers of B-Corps, we can assist you on the way, whether you are an already established B-Corp, or looking to become one.