New B Corp Environmental Standards guide

Our guide to the new standards, what we like about them and one aspect we really don't

The new B Corp Environmental Standards have been a long time coming. The review will have taken more than five years by the time the new standards come into force in 2026. But what can you expect from the new standards and how will they affect your business? In this post we:

• explain the big changes to the way the standards are applied

• outline when the new standards will come into force

• summarise each of the new environmental standards (note: a summary is hard given that the new standards extend to circa 1,000 pages. The best way to assess the specific requirements for your business is to create an account in the B Corp assessment and enter your company details)

• explain aspects of the new environmental standards that we like and one aspect that we really don't

Need help to meet B Corp's environmental standards? Contact us.

The Big Change in the B Corp Standards

B Lab is evolving its standards for B Corp Certification to ensure they remain impactful and relevant. The current model, which allows companies to achieve certification by scoring 80 points or more on the B Impact Assessment (BIA) without specific mandatory practices, has obvious limitations. It is the source of the most common criticism we hear about B Corp — that companies can achieve B Corp status whilst performing relatively poorly in some key areas.

The new standards involve moving away from the "menu approach" of the current points threshold system. Instead, the new model introduces specific and mandatory performance requirements across key impact topics, including the environmental topics of 'Climate Action' and 'Environmental Stewardship & Circularity'.

This shift aims to ensure that all certified B Corps meet defined standards in these critical areas, providing clearer expectations and demonstrating leadership in using business as a force for good.

The Other Big (But Slightly Less Obvious) Change

Whether applying for certification or recertification under the new standards, planning ahead will be far more critical.

Under the current approach, much of what is needed to achieve B Corp certification can be put in place within a matter of months. Many businesses take far longer but it is certainly possible to get everything in place and apply for B Corp within, say, 6 months of starting the process.

Under the draft new standards, this will not be possible for some businesses. The new standards have a much greater emphasis on businesses being able to demonstrate that they have taken consistent action on key topics prior to application.

For example:

• Standard ESC2.6 requires companies to have a strategy to address their actual and potential negative environmental impacts, and to pursue efforts to stay within ecological thresholds. Crucially, for the first certification, the company must explain how it assessed the potential negative environmental impacts for the three most material potential clients or projects in the last fiscal year, and the outcomes of the process. The implication of this is that businesses thinking of pursuing B Corp need to plan to meet this requirement at least 12 months in advance of application.

• Businesses impacted by the requirement to conduct an environmental impact assessment (see Environmental Stewardship & Circularity Standards - ESC1 below) will also need to have conducted stakeholder engagement as part of the assessment process, something which would need to be planned well in advance of any certification or recertification application being made.

When will the new B Corp Standards affect your business?

All businesses submitting new applications after January 1, 2026, will engage with the new standards as part of their certification process.

Existing small- and medium-sized B Corps looking to recertify in 2025 may be able to do so on the existing standards if they submit prior to 30 June. Beyond that, recertification will be under the new standards. More detail is provided by B Lab here.

It is well worth noting that the new standards may be subject to further change. B Lab have stated that "learnings from company self-assessments, verification processes, and the implementation of the new standards may lead to further improvements to the standards". We very much hope that some aspects of the new standards will be changed. More on that below.

What are the new B Corp Environmental Standards?

The introduction of mandatory performance requirements does not mean that all businesses will be required to do the same thing. Instead, the standards vary depending on company size and sector.

The Size and Sector Categories

There are the following size categories based on number of workers and revenue, whichever is higher:

And the following sectors:

• Agriculture/Growers

• Manufacturing

• Wholesale/Retail

• Service with significant footprint

• Service with minor footprint

You can find a definition of the different B Corp sectors in the B Impact Assessment Support Portal.

Below we provide a summary of the requirements under the two environment-specific topics — 'Climate Action' and 'Environmental Stewardship & Circularity' — and how they vary by size and sector.

The 'Climate Action' Standards

CA1 - The company measures its Greenhouse Gas (GHG) emissions annually.

Under this requirement, all B Corps in the Large category and above will be required to measure GHG emissions annually using the methodology of the Greenhouse Gas Protocol.

Crucially, measurement of all emissions is required, i.e. Scopes 1, 2 and 3, including all relevant categories of Scope 3. In the Compliance Guidance, there is an acknowledgement that some Scope 3 categories are very difficult to measure because of a lack of data (this would be the case for most relevant 'downstream' emissions) and allowance is therefore made for an 'explanation of any missing Scope 3 categories'.

For any businesses in the Large or above categories, there is an additional requirement for the company's carbon footprint measurements to be verified by an 'independent third party'. The independent third party carrying out the verification needs to be an accredited certification body under a valid verification standard (most likely this will be ISO 14064-3).

CA2 - The company is committed to contribute to help keep global warming below 1.5C

In meeting this requirement, a distinction is made between businesses at the smaller end of the scale, and businesses in the Large category and above.

For small- and medium-sized businesses, a 'Climate Action Plan' is required. In contrast to the final draft version of the new standards, there is now no requirement for any specific carbon targets to be included, as there is no requirement in CA1 to measure. The "intent" is that the company will still produce a suite of actions to "address its GHG emissions and to contribute to global ambition" but although it is still "recommended" that climate action plans include emissions measurements it is not a requirement, and there is a risk therefore that businesses will have limited understanding of the nature of their climate impacts and scale of reductions possible. More on this below.

Large businesses will be held to stricter standards, with mandatory inclusion of Scope 3 emissions targets, a requirement to set carbon targets which are validated by the Science Based Targets initiative (SBTi) and a requirement to produce a Climate Transition Plan which:

• addresses the company's major GHG emissions sources across Scope 1, 2 and 3

• includes GHG mitigation actions to reach the company's near-term and net zero targets

• includes clearly defined roles and responsibilities (where applicable)

• outlines how the company will engage/work with relevant stakeholders, e.g. stakeholders in the value chain, peers, industry alliances, governments, local communities, trade associations and Civil Society Organizations

• includes a viable resourcing plan to achieve the company's targets

• includes the investment allocated to implementing the transition plan in the last financial year

• details how the company's current or future business model supports achieving the company's target

• is approved by the highest governing body

CA3 - The company implements and makes progress on its climate transition/action plan

For Large businesses and above, there are additional requirements for Climate Transition Plans:

• Just transition must be incorporated

• If the company has an incentive remuneration scheme, executive compensation must be tied to reaching climate targets

• The company must publicly disclose its progress on its Climate Transition Plan annually

And for XX Large businesses there will be an additional requirement to engage in climate advocacy. To limit the climate advocacy to this sub-set of businesses only feels like a missed opportunity to encourage wider business engagement on the kind of systemic changes that are needed in response to climate breakdown.

Any business which is applying for recertification will also need to demonstrate that it has made progress in delivering its Climate Transition Plan or Climate Action Plan. Companies will also need to have evaluated the effectiveness to date of their plans to deliver on targets, record lessons learned, and update their targets and actions where necessary.

CA2 is where we think B Lab have made their biggest mis-step. More on that below.

The 'Environmental Stewardship & Circularity' Standards

In the Environmental Stewardship & Circularity section, there is much more variation in the standards depending on company size and sector than is the case in the Climate Action section.

ESC1 - The company knows its (potential) impacts on the environment.

This standard does not apply to any Sole Proprietor businesses, or any business classed as 'Service with minor footprint'.

For other businesses there are requirements to:

• monitor waste production and the destination of its waste from its operations

• monitor energy consumption annually

• monitor water consumption annually

For energy and water monitoring, the guidance states that the scope of the requirement is 'the facilities the company has operational control over'. This may be useful in cases where energy and water consumption have to be estimated due to an absence of sub-metering in shared premises.

For larger businesses and those in higher impact sectors, additional standards may apply, including:

• assess whether any operations are in areas of water risk

• assess whether any operations are near biodiversity sensitive areas

• monitor animal welfare conditions annually (Agriculture/Growers sector only)

• assess actual and potential environmental impacts from operations and value chain (including supply chain, product usage and end-of-life). For Extra Large businesses and above, the assessment must be audited by an independent third party

It is worth noting that the environmental impact assessment requirement includes a requirement for stakeholder engagement as part of the assessment process, so will need to be planned well in advance of an application being made. Companies are then also required to publicly share information on their material environmental issues identified in the environmental impact assessments, along with the methodology used to assess.

ESC2 - The company has a strategy to address its actual and potential negative environmental impacts, and to pursue efforts to stay within ecological thresholds.

Service sector companies with a minor footprint will be required to demonstrate that they have a process in place to assess the potential negative environmental impacts of working with each potential client/project. The process must include defined mitigation actions.

Crucially, for the first certification, the company must explain how it assessed the potential negative environmental impacts for the three most material potential clients or projects in the last fiscal year, and the outcomes of the process. The implication of this is that businesses thinking of pursuing B Corp need to plan to meet this requirement at least 12 months in advance of application. Companies in the Equity Investing and Investment Advising sectors will also have to assess the potential negative impacts of their investments, and explain how it assessed the potential negative impacts of its three most material potential clients, as well as the outcomes of the process for Year 0 and every year subsequently.

Medium-sized businesses and above in other sectors must meet the following criteria:

• A strategy to address actual and potential negative environmental impacts. The strategy must include:

  • targets for at minimum the upcoming three years

  • key performance indicators (KPIs)

  • clearly defined roles and responsibilities

  • a plan to engage/work with relevant stakeholders, e.g. stakeholders in the value chain, peers, industry alliances, governments, trade associations and civil society

  • it is still "recommended" that climate action plans include emissions measurements and actions based on this

  • how the company uses the water and biodiversity assessments, where applicable, and takes steps to ensure that facilities in biodiversity sensitive or water risk areas are protected and/or set objectives to reduce negative impact

  • how its business model is aligned with its strategy or how it plans to align it in case of misalignment

  • is approved by the highest governing body

• Workers in relevant roles must receive the necessary guidance to implement the environmental strategy

• Company policies and procedures must address its material environmental issues (each material environmental issue identified must be explicitly covered by a policy or procedure)

• The strategy must be approved by the highest governing body or team

• The strategy must have been adopted or reviewed in the last twelve months

For larger businesses and those in higher impact sectors, additional standards may apply, including:

• a dedicated biodiversity transition plan to halt biodiversity loss for all sites in the company's operations and value chain

• a dedicated water stewardship strategy which takes account of local water availability issues

ESC3 - The company implements circularity principles to reduce waste and its impact on natural resources.

The following businesses are exempted from meeting this standard:

• all sole proprietors and micro-businesses

• all service-sector businesses with a minor footprint

• all agriculture/growers sector businesses

Beyond that exemption, the requirements very much depend on business size and sector.

For Large businesses in these sectors and above, there are additional criteria:

• the company monitors its material inflow annually (something which would need to be done anyway in order to effectively address the carbon footprinting requirements)

• the company is reducing its use of virgin non-renewable materials

For X Large businesses, there is an additional criteria:

• the company implements programs or actions to increase the recovery of its products and packaging after the end-of-life

And for XX Large businesses there is one further criteria to be met during a recertification process:

• the company increases its circular material use rate

ESC4 - The company prevents and mitigates its actual and potential negative environmental impacts.

All sole proprietors and micro-businesses are exempted from meeting this standard. This is puzzling. More on this below.

For other companies, there is an expectation that the prevention and mitigation action taken will relate to the environmental impacts identified as part of meeting ESC1.

For the first certification, there is an expectation of output, i.e. that action has been taken. For subsequent certifications, there is an expectation that outcomes will be evidenced, e.g. measurable improvements in biodiversity, water consumption, waste generation etc.

XX Large businesses will be required to 'publicly share the effectiveness of its strategy for managing its material environmental issues'.

ESC5 - The company considers actual and potential environmental impacts in its procurement decisions.

This standard is perhaps the starkest example of the emphasis on demonstrating action rather than demonstrating policies/systems. In the current BIA, some companies may do little more than adopt a procurement policy which references environmental criteria. Under the new standard, evidence of how environmental impacts have been considered will be expected, with different levels of evidence expected for different sizes of business.

For Large businesses and above, there will be a requirement both at certification and recertification stage to demonstrate working with suppliers to address environmental issues.

What we like about the new B Corp Environmental Standards

There is clear customisation to different industry sectors and business sizes. There is significant customisation of the questions in the current B Impact Assessment but many SMEs still find it insensitive to their size and circumstances. The new standards have addressed this issue, even though we disagree with some of the thresholds set — see below.

There is a greater focus in the standards. The current B Impact Assessment is long-winded and repetitive in places. The new standards feel like an attempt to home in on the core of what's important from an environmental perspective.

There is more focus on demonstrable action over policies. This will go a long way to alleviating the risk of companies treating B Corp as a tick-box exercise and, therefore, the reputational risk to the B Corp Standard.

There is more clarity to the requirements. There appear to be fewer grey areas and therefore greater confidence for applicants and potential applicants (and their consultants).

In many respects, the new standards feel like a step forwards. But…

One thing we really don't like about the new B Corp Environmental Standards

We have followed the evolution of the new B Corp standards almost since the process was started. Early consultation versions would have placed an excessive burden on small- and medium-sized businesses in terms of carbon measurement and target-setting.

The final version has swung to the opposite extreme. Small- and medium-sized businesses are still required to produce a Climate Action Plan but that plan does not need to be based on or include any measurement or monitoring of carbon emissions. A Climate Action Plan without details of climate impacts — really?

The recommendations for Climate Action Plans include 'outlining the company's plan to measure its scope 1, 2, and 3 emissions' but since this is not a formal requirement, many businesses will be in a position to achieve B Corp status without having a robust understanding of the sources and extent of their carbon emissions. Given the scale and urgency of the climate crisis, we see this as a giant mis-step.

The new standards could have ensured that B Corp businesses genuinely represented climate leadership. As it stands, they will not.

How We Can Help Your Business Meet The New B Corp Environmental Standards?

We have helped dozens of businesses of many sizes and from numerous sectors to achieve B Corp certification under the current performance requirements.

Our sustainability services can be used to address all of the new B Corp environmental standards and we will continue to support businesses in their pursuit of B Corp status.

Even though carbon measurements are not required for small- and medium-sized businesses, we believe many will want to follow B Lab's recommendation to include these in their Climate Action Plans. We will be pushing all of our clients to do so.

For a complete breakdown of the requirements for each combination of sector and size, see B Lab's overview of the new standards. To see the standards which apply to your business, create an account in the B Corp assessment and enter your company details.

Need help to meet B Corp's environmental standards? Book a free call or send us a message below.