B Corp Certification for Japanese Companies

Launched in the U.S. in 2006, the B Corp movement has been rapidly expanding worldwide. There are now over 6,500 B Corp-certified companies across more than 80 countries. B Corp companies meet high social and environmental performance standards, transparency, and accountability. In Japan, the movement is starting. Codo summarizes what you should know about it and how B Corp can be relevant for Japanese companies.

What is a B Corp?

Certified B Corporations, or B Corps, are companies verified by B Lab to meet high social and environmental performance standards, transparency, and accountability. B Lab is a nonprofit organization established in the U.S. in 2006 with the goal of helping companies balance profit with purpose. The key factor that sets B Corp apart from other business certifications is its comprehensive approach, which assesses a company’s overall social and environmental impact.

In simpler terms, B Corps are companies leading in the quest for a more inclusive, fair, and green economy. Since the first batch of companies was certified in 2007, the B Corp wave has spread rapidly worldwide. Currently, there are over 6500 B Corps worldwide across 161 sectors and 89 countries. B Corp companies are both major international firms such as Patagonia (U.S.), Danone (France), or Natura &Co (Brazil), and smaller companies willing to contribute at their scale.

How to become a certified B Corp

Any company, regardless of its size, legal structure, or industry, can become a B Corp. To be certified, a company must:

Complete the B Impact Assessment (BIA) – Achieve a score of at least 80 (out of 200) in five categories of impact: governance, community, workers, environment, and customers. Upon their first assessment, companies reach – on average – a score of around 60 points. The assessment allows the company to identify which actions can be taken to fill the gap to the required 80 points.
Meet the B Corp legal requirement – Produce supporting paperwork that validates its claims, as well as adjust its company bylaws to reflect its commitment to positive social and environmental impact.
Sign the B Corp Agreement and the Declaration of Interdependence.

Applications are reviewed by the B Lab organization, which ultimately delivers the B Corp certification once it has confirmed that the claims of the applying company are trustworthy.

Once certified, the new B Corp company is added to the online B Corp directory where its impact assessment score is disclosed. It is then allowed to use the “B Corp Certified” logo on its communication materials.

To maintain certification over time, B Corps are required to update their impact assessment and verify their updated score every three years, or after a Change of Control or Initial Public Offering. This practice ensures these standards continue to be met on an ongoing basis.

Why is the B Corp Certification relevant for Japanese companies?

The recent increase in corporate environmental legislation, with an emphasis on climate change, has prompted businesses around the world to meet more environmental requirements than ever before, while collaborating with actors ranging from civil society to investors.

Independent, credible, non-profit certifications such as B Corp allow mission-driven businesses to convey their dedication more effectively to both society and the environment, especially in a world where many companies fall into the trap of greenwashing.

As the B Impact Assessment evaluates organizations under the categories of governance, community, workers, environment, and customers, it presents a great opportunity for Japanese companies to identify what they can improve in their sustainability journey. Once they have reached the required threshold of 80 points, it also allows them to obtain a globally recognized certification and connect with the international B Corp community.

Out of the 6500 B Corp companies worldwide, only 20 are headquartered in Japan. However, this number is expected to grow significantly in 2023. The Japanese B Corps come from a number of different sectors, ranging from retail and manufacturing to health and education services.

Overall, certified Japanese companies are performing very well, with an average score of 92., significantly above the required minimum of 80 points. Each year, B Lab announces the world’s best-performing B Corps – the Best for the World™. These businesses have achieved the highest verified scores in the five impact areas, thus creating the greatest impact through their businesses.

Eco Ring, a reuse retailing company with 369 employees and more than 200 stores in Japan, was selected Best for the World in the Environment category in 2022. Kuradashi, an online marketplace that purchases and resells damaged food, stands out among all Japanese companies, with the highest overall B Impact score of 110 out of 200.

Globally, the movement is being embraced by big multinationals as well as small businesses. For instance, Ben & Jerry’s, a US-based ice cream firm owned by Unilever since 2000, became a certified B Corp in 2012. Another leading example is Danone, the French food and beverage giant. Danone had 28 certified B Corps among its businesses by 2020, including its US and Japanese affiliates.

Even though the number of B Corps in Japan is steadily rising and outreach activities are spreading, such as the Meet the B exhibition and conference in Tokyo in March 2023, the movement has yet to reach large companies. Except for the consultancy SIGMAXYZ (584 employees), education services provider Life is Tech (100+ employees) and Eco Ring, the other Japanese B Corps are all small-sized.

Larger Japanese firms are yet to realize the potential of B Corp certification. The paradox is that Japanese companies have had a “B Corp aligned” mindset in their DNA for centuries, with practices such as sanpo-yoshi (“three-way satisfaction”) or the kaisha wa shakaino kouki “(business as a public institution”). Entering the global B Corp community could help them get a broader recognition from customers, investors and peers for their commitment to a more inclusive, fair, and green economy.