Gavin Howe
B Corp certification is a third-party certification from B Lab, a nonprofit organisation, that recognises a company's entire social and environmental impact. To become a Certified B Corporation, companies must demonstrate high social and environmental performance, make a legal commitment to be accountable to all stakeholders, and exhibit transparency by allowing information about their performance to be made publicly available. While laws and standards vary from state to state, 9b, a data analytics and information technology consulting company, has become one of only three B Corp Certified organisations in Oklahoma.
| Characteristics | Values |
|---|---|
| Certified B Corporations are businesses that meet the highest standards of social and environmental performance | B Corps like Patagonia, Ben & Jerry's, and Seventh Generation |
| B Lab's Standards Advisory Council continually evolves risk standards to evaluate the potential negative impacts of different industries, policies, and practices | B Lab's risk standards are informed by input from experts and stakeholders |
| Companies must undergo an assessment of risk factors based on their industry and other practices | B Impact Assessment score of 80 or above is required for certification |
| B Corps must make a legal commitment to change their corporate governance structure to be accountable to all stakeholders, not just shareholders | B Corps must achieve benefit corporation status if available in their jurisdiction |
| B Corps must exhibit transparency by allowing information about their performance measured against B Lab's standards to be publicly available on their B Corp profile | B Corps build trust with consumers, communities, and suppliers; attract and retain employees; and draw mission-aligned investors |
| B Corps must undergo the verification process every three years in order to recertify | B Corps are focused on improving by definition |
| Benefit corporations are required to make available to the public a benefit report that assesses their overall social and environmental performance | Benefit corporations are not required to be certified by any entity in any state |
| Benefit corporations are a legal structure and the Certified B Corp is a third-party certification from B Lab | B Lab is a nonprofit corporation that has offered "B certifications" to corporations |
| B Corps must consider how a decision will impact profit, society, and the environment | B Corps use their business as "a force for good" rather than just for profit |
| B Corps must appoint and maintain a registered agent | The registered agent must have a registered office with an Oklahoma street address and be available during normal business hours |
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What You'll Learn
Requirements for B Corp certification
B Corp certification is a rigorous process that evaluates a company's entire social and environmental impact. The specific requirements vary depending on the company's size, sector, and industry, but some general foundational criteria must be met by all companies seeking certification. Here are the key requirements for B Corp certification:
Foundation Requirements:
To begin the certification journey, companies must meet the fundamental eligibility requirements, known as the Foundation Requirements. These include:
- Legal Incorporation: The company must be legally incorporated, complying with local and national laws.
- Operational Duration: The business must have been in operation for at least 12 months.
- Stakeholder Governance: Companies must adopt the B Corp Legal Requirement, committing to accountability to all stakeholders, not just shareholders. This involves embedding stakeholder governance principles into their legal frameworks and signing the B Corp Declaration of Interdependence.
- Risk Assessment: Utilizing B Lab's risk profiling tool, companies must create risk profiles, which determine additional due diligence sub-requirements for the certification process.
Performance Standards:
The B Corp performance standards outline specific practices that reflect a high standard of social and environmental performance and positive impact on stakeholders. These standards are assessed through the B Impact Assessment (BIA), an online tool used by B Lab to evaluate a company's performance. The BIA covers areas such as governance, workers, community, and the environment. To achieve certification, a company must score 80 or above on the BIA and pass the risk review.
Legal Requirements:
Companies must make a legal commitment to change their corporate governance structure to be accountable to all stakeholders. This may involve amending their articles of incorporation or making other legal adjustments to meet the B Corp requirements.
Transparency:
B Corps must agree to transparency by allowing their performance information, measured against B Lab's standards, to be publicly available on their B Corp profile. This includes posting their B Impact Score and an impact report on the B Corp Directory.
Verification and Recertification:
The B Corp certification process includes a rigorous verification step where a standards analyst reviews the company's BIA answers for accuracy. This step ensures that companies are accurately meeting the requirements. B Corp certification is valid for three years, after which companies must undergo recertification. Recertification involves updating the BIA and verifying the B Impact Score again.
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Oklahoma's requirements for corporations
To become a corporation in Oklahoma, you must file a Certificate of Incorporation, also known as the Articles of Incorporation in other states. This document must include the business purpose, duration of the company, and the number of stock shares authorized. The business purpose can be kept general, such as "to engage in any lawful act or activity for which corporations may be organized under the general corporation law of Oklahoma." The duration of the company can be limited or unlimited.
Additionally, the Certificate of Incorporation must include the names and addresses of the directors, who will manage the corporation for its first year. There must be one or more directors, and there are no residence or age requirements. The shareholders will appoint directors at an annual meeting, and the board of directors will govern the corporation. The corporation can create its own regulations for the board of directors, as long as they stay within the law.
Oklahoma also requires corporations to have bylaws, which are written by the initial shareholders and outline the company's operating procedures, including the duties and responsibilities of owners and the management style. Professional corporations must follow regulations specific to their profession and ensure compliance with state laws.
Other requirements for corporations in Oklahoma include appointing and maintaining a registered agent with an Oklahoma street address who is available during normal business hours to accept legal documents, obtaining a federal tax identification number (EIN) if the corporation will have employees or plans to open a business bank account, and filing a Business Registration Form with the Oklahoma Tax Commission within 60 days of incorporation. Corporations must also file an Annual Franchise Tax Return with the State Tax Commission by July 1.
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Differences between B Corps and regular corporations
While there is no explicit mention of Oklahoma in relation to B Corps, I can outline the differences between B Corps and regular corporations.
B Corps are for-profit companies that have a strong focus on social and environmental responsibility. They are committed to considering the impact of their activities on all stakeholders, including employees, the local community, and the community affected by their environmental impact, rather than solely focusing on profits for their shareholders. B Corps are certified by B Lab, an independent third-party non-profit organisation, which assesses companies against standards relating to accountability, community involvement, treatment of employees and consumers, and environmental impact. To achieve certification, companies must score a minimum of 80 points on the B Impact Assessment and pass a risk review. They must also make a legal commitment to change their corporate governance structure to be accountable to all stakeholders and achieve benefit corporation status if it is available in their jurisdiction.
Regular corporations, on the other hand, are governed by traditional corporate law, which typically views a company's primary purpose as maximising profits for its shareholders. In Oklahoma, for example, corporations are required to appoint a registered agent and file a Certificate of Incorporation, which includes the directors' addresses and names. The rules for the board of directors can vary from corporation to corporation, and each corporation can create its own regulations within the law. Additionally, Oklahoma corporations must have bylaws, which outline the duties and responsibilities of owners and the management style of the company. While there is no explicit mention of environmental or social responsibility in the requirements for incorporating in Oklahoma, corporations may include a general business purpose in their Certificate of Incorporation, allowing them to engage in any lawful activity under the state's general corporation law.
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Steps to becoming a B Corp in Oklahoma
B Corp certification is a third-party verification awarded by the nonprofit organisation B Lab. It proves that a company meets rigorous standards for sustainability, ethical governance, and social responsibility. To become a B Corp in Oklahoma, companies must follow several steps and meet specific requirements. Here is a detailed guide to help you get started:
Understand the B Corp Certification Process:
Before embarking on the journey, it is essential to understand the B Corp certification process and its upcoming changes. B Lab will introduce new standards in 2025, making the certification process more robust. These new standards will focus on clear, sector-specific sustainability goals, including mandatory climate impact considerations.
Assess Your Company's Readiness:
Register for the B Impact Assessment, a free and confidential tool offered by B Lab. This assessment will help you evaluate your company's current social and environmental performance. It covers areas such as workers' rights, governance, environmental sustainability, and community engagement. Your company must achieve a score of 80 or above to be eligible for certification.
Integrate Stakeholder Consideration:
Use the Legal Requirement Tool provided by B Lab to determine how to integrate stakeholder consideration into your governance structure. This step will depend on your company's location and corporate structure. It is crucial to ensure that your legal commitments align with the B Corp stakeholder model.
Complete the Risk Review:
As part of the certification process, your company must undergo a risk review. This review will assess the potential negative impacts of your industry, policies, and practices. It is important to gather supporting documentation and data to facilitate this process.
Meet Legal Requirements:
To become a B Corp, your company must make a legal commitment to change its corporate governance structure. This involves being accountable to all stakeholders, not just shareholders. Additionally, your company must achieve benefit corporation status if it is available in your jurisdiction.
File for Incorporation in Oklahoma:
To operate as a corporation in Oklahoma, you must file the Certificate of Incorporation (also known as the Articles of Incorporation) with the Secretary of State. This process can be completed online or by mailing a PDF form. Remember to include the required information, such as the business purpose, duration of the company, and directors' details.
Comply with Licensing and Permits:
Research and obtain the necessary licenses and permits for your industry. While Oklahoma does not require a general business license, specific types of businesses and occupations may require licenses, permits, or special registrations. These requirements may vary at the local, state, and federal levels.
Continuous Improvement and Recertification:
Becoming a B Corp is not a one-time achievement. Certified B Corps must continuously improve and undergo recertification every three years under increasingly stringent standards. This process ensures that B Corps remain committed to their social and environmental responsibilities.
Please note that this is a general guide, and it is recommended to refer to the official B Lab website and seek legal advice for a comprehensive understanding of the process and its applicability to your specific business.
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Benefits of B Corp certification
B Corp certification is a process that companies can undertake to demonstrate their entire social and environmental impact. B Lab, the organisation that awards the certification, describes itself as a "nonprofit network transforming the global economy to benefit all people, communities, and the planet".
There are several benefits to B Corp certification. Firstly, it helps companies build trust with consumers, communities, and suppliers. This trust is built through the demonstration of a commitment to social and environmental responsibility, which can also help attract investors who are aligned with the company's mission. B Corp certification can also help attract and retain employees, as it validates a company's employee-centric culture and provides a sense of pride in working for an organisation that is actively trying to make a positive social change.
Another benefit of B Corp certification is the potential for cost savings. B corps have access to community data, which can help them learn the most cost-effective means to be sustainable, and the certification process itself can help companies identify and eliminate wasteful spending. The process of becoming B Corp certified can also help companies identify and prioritise areas for improvement, leading to long-term resiliency.
Finally, B Corp certification can help companies stand out from their competitors and demonstrate their commitment to ethical standards and public benefit, which can be especially advantageous for smaller companies competing with larger, more conventional profit-driven businesses.
While there are many advantages to B Corp certification, it is not the right move for every business. The process requires extensive work and due diligence, and companies must carefully consider their motivation and goals before undertaking the certification process.
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Frequently asked questions
B Corps are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.
To become a B Corp, a company must demonstrate high social and environmental performance, make a legal commitment to be accountable to all stakeholders, and exhibit transparency by allowing information about their performance to be publicly available.
The process to become a B Corp involves registering for and completing the B Impact Assessment, using the Legal Requirement Tool, completing the Risk Review, gathering supporting documentation, establishing a company profile, and starting the Disclosure Questionnaire.
B Corps build trust with consumers, communities, and suppliers, attract and retain employees, and draw mission-aligned investors.
Yes, there are currently three B Corps in Oklahoma, including 9b, a data analytics and information technology consulting company.
