Why become a B Corp?

An ever-growing focus on environmental, social and governance (ESG) issues has led many law firms to make net zero pledges and to sign up to diversity, equity, and inclusion (DEI) initiatives. But with greenwashing claims increasingly under scrutiny by the Competition and Markets Authority, some law firms are seeking independent accreditations which not only provide third-party validation of their ESG claims, but also enable them to strive for further positive change.

B Corp Certification is one such accreditation, and it is gaining in popularity in the legal sector. Currently around 20 UK law firms have been granted B Corp status by B Lab, the global non-profit network that created the B Corp Certification programme. They include Bates Wells – the first UK law firm to achieve the status – Radiant Law, Anthony Collins Solicitors, Ampa and Muckle. In February, Freeths Solicitors became the largest law firm to join the B Corp movement.

The premise behind the B Corp movement is that a new stakeholder-driven business model is possible. Becoming a B Corp means that a business is meeting certain verified standards of performance, accountability and transparency, for everything from supply chain, to treatment of workers, to its impact on the environment and the community.

Organisations aiming for accreditation are required to demonstrate high standards in environment and social performance by achieving a score of at least 80 in B Lab’s B Impact Assessment (BIA) and passing a risk review.

The BIA, which consists of 200 questions, is a lengthy process, say those who have been through it. It can take up to 18 months. ‘The questions get harder every time we certify,’ notes Angela Monaghan, head of purpose and impact development at Bates Wells.

Alex McPherson is founder and partner at Ignition Law, which is currently going through the BIA process. ‘It’s been a massive amount of work behind the scenes. We are hugely excited to nearly be there now, because it represents the concept of giving back rather than simply just trading as a business.’

If a company scores more than 80 on a completed BIA, it can submit it to B Lab for evaluation. Then, an analyst reviews the company’s eligibility for B Corp Certification, which is followed by a verification process, during which the applicant provides information about employees and suppliers.

If a company is successful in becoming a B Corp, its corporate governance documents have to be changed to make it accountable to all of its stakeholders, not just its shareholders or equity partners.

B Lab’s assessment is rigorous, and having the right ethos and buy-in at senior level are prerequisites to becoming a B Corp.

‘We were already making changes before becoming a B Corp,’ says Simon Lewis at Brabners, which became a B Corp in 2022. ‘Being better has to be a fundamental to running your business, and you need to look at that first before embarking on the B Corp process. B Corp won’t help you change your ethos, but it does help in disseminating the message and empowers colleagues to be more progressive.’

‘I head up the sustainability practice at the firm and a part of that is to agitate for change,’ Lewis adds. ‘I started looking at B Corps back at the end of 2020. What appealed to me is that we wouldn’t just look to profit when judging success. There’s also a real business case for sustainability.’

Liz Carter, purpose and impact manager at Cripps, which became a B Corp this year, agrees: ‘As a firm, you have to have the right values in place, and the right mindset that purpose and profit aren’t mutually exclusive. Our four pillars of purpose – people, clients, community and planet – sit well with B Corp certification. B Corp status can’t fix things, but it does give you the right framework. We used B Corp as a measure to improve.

‘Becoming a B Corp is just the start of our commitment,’ she adds. ‘When you become a B Corp you sign up to transparency, accountability and continuous improvement, and using your business as a force for good.’

The ongoing requirements of B Corp Certification mean that organisations are reassessed every three years, and have to produce annual impact reports. These reports ensure B Corps remain transparent and accountable to their stakeholders about their social and environmental impacts, and showcase them.

B Corp law firms cite the movement’s community aspect as being one of its most attractive elements.

‘We are already seeing the benefits of being part of the B Corp community. It’s partly about networking and partly just about comparing notes with a group of like-minded businesses,’ says Chris Freeston, managing partner of Freeths, Nottingham.

‘B Corp extends beyond a simple certification,’ says McPherson. ‘It is about being a valued member of the community.’

Bates Wells became the first UK law firm to achieve B Corp status in 2015.

‘Luke Fletcher, a partner at Bates Wells, was involved in bringing B Corps to the UK,’ says Monaghan. ‘It became clear to us that being a B Corp resonated with our existing ways of working. The triple bottom line of considering the impact of all our decisions on stakeholders and the environment, and not just profit, resonated with who we already were.’

The business case

Monaghan says that this kind of ‘people and planet before profit’ approach can be reconciled with a law firm’s commercial drivers.

‘B Corp businesses are not just surviving but thriving,’ says Monaghan, ‘because being a B Corp really forces you to think about the decisions you are making in a forensic way, and you are consequently more likely to be lean.’

Currently, more than 100 of Bates Wells’ clients are B Corps, and others are organisations that aim to have a positive impact, such as social enterprises, charities and commercial businesses.

‘We have definitely gained clients as a result [of being a B Corp],’ says Monaghan. ‘B Corps and other purposeful businesses are now coming to us, as well as businesses that are not as far ahead in their journey, who are attracted by the value we can add in helping them to embed sustainability in their business.’

‘There’s no reason a law firm can’t be profitable, and comply with the requirements of B Corp status,’ says James Geary, managing partner at EMW, which became a B Corp in June 2023. ‘For clients, B Corp status is a Kitemark of our dedication to doing the right thing. I think modern clients want to work with law firms that recognise the importance of behaving well, and not putting profit above everything else.’

Monaghan references a report by cross-party thinktank Demos, supported by B Lab. This argues that, on a macro-economic level, a ‘purpose-led economy’ creates a ‘purpose dividend for the UK economy’ that boosts GDP by 7%, increases capital investment by £86bn and provides the lowest earners with a £5.3bn pay rise.

‘If all businesses acted like purpose-led businesses, we would see a significant improvement in the UK’s economic performance,’ the report noted.

Firms who have earned a B Corp certificate have also reported increased interest from potential recruits.

‘Our training contract applications jumped significantly after we became a B Corp,’ says Lewis. ‘The lawyers of the future want to work for a business that is making a positive impact.’

The right fit

But not all law firms are good fits for B Corp Certification. For instance, in 2022, a few months after it became a B Corp, Mishcon de Reya ended its seven-year partnership with B Lab, citing difficulties in balancing sustainability commitments and professional obligations.

While B Lab does not stipulate which industries or activities a B Corp can operate or engage in, applicants are required to ‘confidentially disclose potentially sensitive’ sectors and practices with which they are involved (such as the alcohol, firearms, tobacco, fossil fuels and tax advisory industries) by submitting a yes/no questionnaire. But Carter says that advising clients which operate within these areas is not an insurmountable obstacle.

‘[Cripps has] always been mindful of the types of clients we work with. But this doesn’t means we write off clients in B Lab’s list of disclosure industries. The question is whether we share values and ambitions. If so, we want to work together to champion those.’

Becoming a B Corp enabled Cripps to ‘look at what is within our direct control as a business’, says Carter, including the way the firm treats its staff and operates its buildings, and the impact its legal advice can have.

‘The relationship between client and adviser is key,’ Carter says. ‘It’s not a matter of advising our clients alone, we also have the opportunity to educate. In one case, this led to a major new client who appreciated our transparency and felt this was well-aligned with their own values.’

There was a backlash last year when B Lab certified Nestlé subsidiary Nespresso as a B Corp. Accusations levelled at the company included that its farmers earned low incomes and that its coffee pods generated a huge amount of waste. Nestlé has pointed to what it says are stringent ethical practices.

Nonetheless, the UK is one of B Lab’s fastest-growing regions, and participation by the legal sector is increasing.

While the B Corp Certification process is rigorous, and the standards that must be met are to be tightened next year after extensive consultation, law firms that have earned the designation are adamant that there are clear rewards for those which persevere with the process.

 

Maria Shahid is a freelance journalist