Frequently Asked Questions

How are the standards governed?

As a standards-based organization, B Lab follows international best practices and guidelines for standards development to ensure the highest levels of effectiveness, fairness and credibility of the B Impact Assessment. A new version of the B Impact Assessment is released once every two years. The first version (V1.0) of the Developed Markets (DM) assessment was released on October 19, 2007 and V2.0 followed in January 2010 with two addenda focused on the green building and financial services industries. V3.0 was introduced in July 2011 and includes an assessment designed for companies in Emerging Markets (EM). Version 3.0 features integration with the IRIS taxonomy and the ability to rate a fund portfolio. V4.0 was introduced in January 2014. In V4.0 we reduced the number of questions in the operations section and increased the sophistication of the questions in the Impact Business Model Section. 

All content and weightings of the assessment are governed by an independent Standards Advisory Council (SAC) made up of 18-20 members, each respected in the field for their wisdom and each with deep industry or stakeholder expertise. SAC membership is designed to have representation from individuals and organizations that both are materially impacted by the standards and have deep expertise in topics relevant to the ratings system. SAC membership application is open to the public via B Lab's website each term and all members and their affiliations are also made transparent. To see a current list of SAC and Advisory Committee members click here.

Prior to the release of each new version of the assessment B Lab conducts both a private beta and 30-day public comment period to ensure that B Lab's stakeholders are being recognized in the standards development process and the general public has the ability to review and provide input on proposed standards.

Governance Structure 

Body
Role
Standards Advisory Council (SAC)     

Standards Advisory Councils (SACs) are independent governance bodies that develop and update the B Impact Assessments. Each SAC is comprised of industry leaders from sustainable enterprise, impact investing, government and academia. The Emerging Market and Developed Market SACs have authority over the content and weightings of the B Impact Assessment. Recommendations from SACs require a two-thirds majority vote by the B Lab Board of Directors to overturn.

Industry Working Groups

Industry Working Groups are ad hoc committees comprised of industry leaders that advise the Standards Advisory Council on the development of industry specific addenda to the B Impact Assessment. Previous working groups have focused on real estate, health & safety, and financial services. Recommendations from the Industry Working Groups require a two-thirds majority vote from the relevant SAC(s) to overturn.

B Analytics Advisory Committee

The B Analytics Advisory Committee includes investors, fund managers, and advisors who are leaders in impact investing and advises B Analytics management on product development, fundraising, and adoption.

 B Lab Board of Directors

The responsibilities of B Lab's Board of Directors include:

1. Overseeing strategy, budget and operations of B Lab & GIIRS, including oversight of management, compensation, and development,

2: Play a leadership role in forming the Standards Advisory Councils and B Analytics Advisory Committee, provide oversight of their activities, and amend/approve their recommendations, and

3: Assist in identifying and cultivating potential philanthropic donors/investors to ensure funding of B Lab's operations prior to sustainability via licensing and ratings incomes. Only entity with fi duciary duty.

 

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Who develops the standards?

The standards are created and revised by the Standards Advisory Council (SAC), a group of independent experts in business and academia.  To learn more about SAC members and their role, click here

Although the SAC creates the standards, we invite all interested to provide feedback to the standards. The best way to submit your feedback is to log into the B Impact Assessment and select “Leave Feedback” next to each question:

The Assessment also goes through a private and public beta period in which feedback is collected and integrated into final versions. Expert working groups are convened in order to explore our specific issues more closely in an objective manner. The Assessment is updated every two years in order to accommodate new and innovative practices, respond to the feedback of its users, and to more accurately assess the impact of all types of businesses.

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How can I get involved with the standards development?

Our Standards Advisory Council is comprised of industry leaders and experts that we recruit by invitation. We strive to continually improve the Assessment, and that requires input from many different sources. We encourage everyone who takes the Assessment to submit feedback; you will be given the option to do so on a question-by-question basis. We take this feedback seriously and incorporate it into our standards development process.

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What is an Impact Business Model?

The Impact Business Models (IBM) section evaluates the big picture issues that the company is aiming to solve through its products or operations (ie. poverty alleviation, creating a fair trade supply chain).

This section is a collection of best practices that are extremely rare but are a defining element of a social enterprise. Small elements of IBM type practices are likely mentioned in the other sections, but the IBM section allows the Assessment to isolate these big picture goals and evaluate them at a much higher degree of detail. The best way to learn about IBMs is to login to the B Impact Assessment.

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How does this relate to other impact measurement systems?

In general, the B Impact Assessment provides a judgment (via an objective, comprehensive rating) on how significant a company’s current impact is.  The B Impact Assessment is commonly confused with reporting systems or definition frameworks that detail how a company should go about collecting that impact data, but not necessarily provide a judgment on how significant that company’s impact is.

For example, the Global Reporting Initiative (GRI) or IRIS are platforms that are likely to define specific way to report impact metrics;  As an example, they may define how to best report a company's carbon emissions, so that all carbon reports in the future can be easily comparable to each other (ie. Company X is responsible for producing 30,000lbs of carbon, based on its direct emissions from its plant and its electricity purchases).  IRIS and GRI definitions and reporting standards are a critical part of the B Impact Assessment.   

As a result, a GRI or IRIS indicator is more likely to tell you that the company is reporting its emissions according to best practice.  On the other hand, the B Impact Assessment aims to evaluate whether the company has either increased or decreased its emissions relative to the company’s revenues or relative to the practices of other businesses, because this disctinction helps a growing number of consumers, investors, and institutions who want to support businesses who put their values into action.

The B Impact Assessment simply builds upon the important work that other organizations and industry groups are doing to define and measure impact.

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What are the key gating factors for the B Impact Assessment versions?

The Assessment changes based upon the following characteristics of the company:

GEOGRAPHY:

  • Developed Markets
  • Emerging Markets

SECTOR:

  • Service
  • Wholesale/Retail
  • Manufacturing
  • Agriculture

EMPLOYEE SIZE*:

  • 0 Employees
  • 1-9 Employees
  • 10-49 Employees
  • 50-249 Employees
  • 250-1000 Employees
  • 1000+ Employees

*The key factor involved here is the number of Full-time equivalent employees that are employed on the company’s payroll.

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The Assessment seems to require lots of formal policies. How does it capture true impact?

The Assessment in general does its best to reward social and environmental outcomes (versus intention) first. Although it may ask a few questions related to formal policies, these questions are weighted far less than questions the company is practicing. For example, the questions related to how many hours the company’s employees volunteered in the last year will be worth far more than question of whether the company has a formal Community Service Policy.

  • Policies - 5%
  • Practices -  24%
  • Outputs and Outcomes - 71%

Other business owners have learned that formalizing their practices allows them to sustain those activities over a longer period of time with more engagement from their employees, and therefore this formalization is rewarded in the Assessment.

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Why evaluate the impact of the whole company?

History repeatedly teaches the business world that there are often unintended, negative consequences of focusing on a single objective. This principle is just as relevant amongst social enterprises. It is not uncommon to observe businesses that bank to the poor but pay below market wages to their employees or install solar panels that were made using toxic metals; often the positive impact create on one constituent comes at the expense of another.

We believe that the power of private enterprise is not only capable but best suited out of all forces in society to achieve multiple social and environmental objectives. As a result, the B Impact Assessment is designed to simply show businesses what is possible across all dimensions of sustainability, without prescribing specific practices.   Just as society encourages students to study both the sciences and the humanities, we hope to encourage a business society that has a more holistic set of objectives. Some argue that striving for multiple social objectives dilutes the effect of the individual goals due to time or resource constraints. We do not doubt that there is often a tradeoff between two financial or social objectives. But this also does not mean that business owners are incapable of at least considering these tradeoffs by way of assessing the company’s performance against these parameters.

We believe that widening the lens on impact measurement will only help the company achieve its long term objectives instead of harm.

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How often is the Assessment revised?

A new version of B Impact Assessment is released approximately every two years.

  • Version 4 Release: January 2014
  • Version 3 Release: September 2011
  • Version 2 Release: January 2010
  • Version 1 Release: October 2007

Prior to the release of each new version of the Assessment, B Lab conducts both a private and public beta period that allows all stakeholders to provide feedback to the standards before they are published.

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What is IRIS?

The Impact Reporting and Investment Standards (IRIS) provide a common reporting language to describe social and environmental performance and ensure uniform measurement and articulation of impact across companies. The IRIS taxonomy defines terms to enable consistent reporting and allows benchmarking of data across companies by serving as a repository for aggregated IRIS-compliant data. The Global Impact Investing Network, B Lab, Acumen Fund, and the Rockefeller Foundation helped launch IRIS, with support from Hitachi, Deloitte and PricewaterhouseCoopers, in early 2008.

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What does IRIS measure?

IRIS provides a library of commonly reported impact terms. The framework can be applied across sectors and geographies and has been organized into six main areas: Organization description, including information about the mission, operational model, and location of a company

  • Product Description , including descriptions of companies’ products, services, and target client base
  • Financial Performance , including financial performance metrics that are consistent with both the Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS)
  • Operational Impact , including descriptions of companies’ policies, employees, and environmental performance
  • Product Impact , including descriptions and measures of the benefits of companies’ products and services
  • Glossary of definitions for common terms that are referenced in IRIS
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How can I get involved in social enterprise?

Everyone’s path in social enterprise is different. If you are interested in getting involved in the B Corp movement, please visit here. We also encourage you to check out our partners such as Social Venture Network, ANDE and 1% for the Planet, to learn more about opportunities in social enterprise. We also regularly post job opportunities at B Corps here.

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