Looking ahead – The B Corp

In the latest of our Looking ahead series of articles, Richard Spofforth asks whether the B Corps time has now arrived?

What does Jamie Oliver, The Guardian newspaper, Innocent Smoothies, Cook in Sittingbourne, Danone, Patagonia, Ben & Jerry’s and The Charity Bank all have in common? They are all certified B Corps.

B Corps are to business what Fair Trade is to coffee or chocolate, balancing the pursuit of profit with a strong ethical purpose.

There are currently 3,499 businesses in 74 countries spanning 150 industry sectors that are certified as B Corps. In the UK, 306 businesses from law firms, food producers, retailers, stationery providers and financial services providers have all achieved B Corp certification.

B Corps have one common goal and that is to put profit and purpose on an equal footing. They are legally required to consider the impact of their decisions on their workers, suppliers, community and the environment. They are also audited annually by the not-for-profit B Lab.

Why become a B Corp?

The role and impact businesses have on society and the environment is an increasing priority for business leaders, investors and staff. Businesses are required to report on, for example, gender pay gaps, modern slavery and increasingly on environmental, social and governance (ESG) issues.

The Coronavirus pandemic has further accelerated our awareness of those issues with society asking more from the business community. And those businesses that have responded by putting those concerns on a legal footing often find considerable competitive advantage.

By choosing the B Corp structure, businesses are likely to find a significant brand advantage and a strong recruitment appeal. A recent survey by the consultancy firm Deloitte (Global Millennial Survey 2020) points to Generation Z and Millennials looking more favourable to businesses that have a positive impact on local communities and the planet – and they are a voice that will increasingly become louder.

There is also a growing pool of evidence that B Corps find it easier to attract investment and can see an uplift in valuation on future sale.

B Corps are strong, purpose led businesses that look to make profit responsibly. It is a movement that is gathering pace.

The road to B Corp

It is, as you would expect, not easy to achieve B Corp status, following a rigorous certification process that is audited annually.

Businesses are scored across five broad areas – Governance, Community, Workers, Environment and Customers – needing to achieve a minimum standard to be awarded B Corp status. Businesses are encouraged to assess, compare and continuously improve their scores by comparison with other B Corp companies. The certification process needs to be retaken every three years.

Businesses wishing to explore full certification can take a short 30-minute online survey to see how prepared they are.

To achieve B Corp status, businesses are then required to update the Articles of Association, reincorporating as a benefits corporation or association, enshrining its principles in law.

Achieving B Corp status will not be a route for every business, and it will naturally need careful consideration from management teams and Boards. For those businesses that decide B Corp status is not for them, they will often still abide by its guiding principles in their corporate and social responsibility programmes operating within a clear purpose-driven framework.

Our Growth team is currently working alongside businesses who would like to become more purpose focused to help guide them on their journey. We have recently launched our own purpose, which you can read more on here. If this is something you would like to find out more about, please get in touch.

How is Kreston Reeves responding?

Currently, in the UK, no accountancy firm has achieved B Corp accreditation, but that will change. It is something we are currently exploring.

Kreston Reeves, led by James Peach, Partner and Head of Corporate Social Responsibility, has invested considerable time and effort into our corporate and social responsibility programme, published in an Impact Report.

The firm holds itself accountable against four of the United Nations Sustainable Development Goals – good health and wellbeing, quality education and training, reducing inequality, and climate action.

That is on top of the firm meeting a further seven UN Sustainable Development Goals including responsible production and consumption, gender equality and sustainable communities. The route to B Corp certification often starts by meeting these UN goals.

But what does this mean in practice?

Kreston Reeves has a dedicated Wellbeing team with ambassadors that promote good physical and mental health throughout the year through a series of activities and training. The value of this cannot be under-estimated, particularly this year.

The firm is proud of its government Accredited ‘Employer Provider’ status, allowing us to deliver our own apprenticeship programme.

In 2018, the firm created its own Kreston Reeves Charitable Foundation, where money raised by staff is distributed to its chosen charities. In 2019/20, over £18,500 was given to charities. The Foundation also allows every member of staff one paid volunteer day a year to support community projects, with over 232 hours given in 2019/20.

The Foundation also supported efforts by the firm’s employees in 2019 in raising £12,000 to travel to Ghana and build a new school for disadvantaged children.

And finally, Kreston Reeves is well on its way to becoming a fully carbon neutral firm by 2021 as is many of its suppliers.

James Peach, Partner and Head of Corporate Social Responsibility, comments; “Many of the team have already been exploring ways to reduce their personal carbon footprint, with many sharing ideas within our internal social network. It was natural for us to pledge to do the same with our business, and also help our clients to contribute to the UK reaching a Net Zero goal by 2050.”

We believe that every business should be underpinned by a strong purpose. The B Corp accreditation is one way to put that into practice and it is likely that many more businesses in the UK will choose that route.

Further reading:

To learn more on B Corps visit – https://bcorporation.uk/

To read the Kreston Reeves Corporate Social Responsibility Impact Report visit –www.krestonreeves.com/impact-report

Kreston Reeves has been hosting a series of practical webinars helping businesses to look ahead and plan for a post COVID-19 future. To view topics and details of our ‘Looking ahead’ webinars or to register your place please visit www.krestonreeves.com/webinars.