B Lab's New Standards Impact Topic: Purpose & Stakeholder Governance
B Lab’s standards define the performance that a company must meet and continuously improve upon to achieve and maintain B Corp Certification. Since 2006, we have evolved the standards to improve their impactfulness and clarify what it means to be a leading business, incorporating feedback from diverse stakeholders.
To achieve these goals, the new standards require companies to meet specific requirements across seven Impact Topics. While we have developed the new standards with the existing standards in mind, you can expect to see new topics and evolved requirements where topics overlap, designed to improve business impact.
After all, the B Corp community is built on the principle of continuous improvement.
As expectations for business evolve, B Corps are doubling down on what’s always set them apart: a commitment to purpose and accountability to all stakeholders. With updates to the Purpose & Stakeholder Governance Impact Topic—strengthening engagement, oversight, and transparency—Brigitta Nemes breaks down why this vital topic matters now more than ever, and what it means for B Corps leading the way.
Describe the Impact Topic in a nutshell:
Purpose & Stakeholder Governance as an Impact Topic stands as a key pillar for certified businesses, ensuring that businesses operate with a clear and meaningful purpose, backed by a stakeholder governance structure that considers the interests of all stakeholders—including workers, customers, communities, the environment, and shareholders. By embedding these principles, companies contribute to an inclusive, equitable, and regenerative economy that serves both people and the planet.
What is the purpose of the topic, and why does it matter in today’s world?
The Purpose & Stakeholder Governance Impact Topic is centered around one of the fundamentals of B Corp Certification: stakeholder governance. This kind of corporate governance ensures that companies are required to consider the interests of all of their stakeholders in their decision-making. For too long, shareholder primacy—the idea that companies exist solely to maximize profits for shareholders—has driven decision-making at the expense of workers, communities, and the environment. This model has contributed to the global challenges we face today, from climate change to economic inequality.
Achieving meaningful change requires a systemic shift in how businesses are structured and held accountable. This includes redesigning legal frameworks to ensure companies are not only encouraged but expected to consider the interest of all their stakeholders in decision-making. That is why B Corps, where jurisdictions allow, are legally required to change their governance structure and embed stakeholder accountability. As such, the Purpose & Stakeholder Governance Impact Topic intends to ensure that each company is acting on the letter and spirit of that legal change, whether legally available to implement or not. This includes practices like aligning a company's corporate purpose with positive social and environmental impact, considering impacts on stakeholders, creating governance engagement mechanisms and structures to realize stakeholder considerations, and establishing responsible and transparent communications on the company’s progress towards its social and environmental goals.
How has the emphasis of the topic changed throughout the development process and what factors contributed to that?
While stakeholder governance has long been a core part of B Lab’s standards, the new standards strengthen and build on it.
A central requirement for companies is to consider their impacts on stakeholders when making decisions. One important aspect of this, which aligns with evolving global frameworks—such as the Corporate Sustainability Reporting Directive (CSRD) in the EU - is conducting a materiality assessment. Therefore, in the new standards, larger companies are required to regularly engage stakeholders in a materiality assessment process. To ensure a comprehensive approach, if a company identifies material topics that go beyond those covered in B Lab’s standards, it has to define specific goals for these topics.
Another area that the Purpose & Stakeholder Governance Impact Topic spotlights is responsible marketing and communication. It goes without saying that, while sustainability is something that companies today cannot avoid addressing, the risk of greenwashing is inherent. The new standards, therefore, require companies to have a responsible marketing and communications policy, along with a process to support its implementation. These updates align with global regulatory efforts, such as the Green Claims Directive and the Empowering Consumers Directive from the European Commission or the Decree 2022-539 by the government of France related to the use of climate claims in advertising.
In addition, it is also important that financial decisions reflect a company’s social or environmental commitments (see more on the topic of aligning purpose with financial decisions in the PAS 808:2022: Purpose-driven organizations – Worldviews, principles and behaviors for delivering sustainability – Guide¹, by the British Standards Institution). Therefore, the new standards introduce a requirement for larger companies to consider their stakeholders in decisions they make on dividends and stock buybacks². It is acknowledged that a stock buyback mechanism, which aims to provide short-term financial returns to shareholders, negatively affects a company’s environmental and social performance.
What Impact Topic requirement(s) are you most excited about - and why?
One of the most exciting updates in the new standards is the requirement for companies of all sizes to integrate stakeholder perspectives into their decision-making processes. This shift creates opportunities for businesses to become more inclusive and responsive, especially in an increasingly complex global landscape. Depending on the company's context, this can take different forms. For instance, implementing mechanisms like worker representation, creating sustainability committees, or having a seat for a stakeholder in the highest governing body.
For larger companies, the emphasis on materiality assessments ensures that stakeholders play a more active role in shaping business priorities (integrating the Baseline Requirements).
What similarities are there between this new Impact Topic and the existing standards?
While this Impact Topic introduces significant changes, it builds upon the strong foundation of stakeholder governance in the current standards. These include, for instance, engaging stakeholders to define material impacts, having a grievance mechanism, or reporting on the company’s social and environmental performance. By reinforcing and expanding on these principles, this Impact Topic ensures that stakeholder governance continues to be a key pillar for B Corp Certification.
Where are the biggest growth areas for companies?
One of the biggest growth areas for companies is in responsible marketing and communication practices. While many companies may already incorporate some level of responsible marketing, meeting the new standards will likely require revisiting and refining these practices to ensure transparency and credibility. Companies should ensure their marketing and public relations efforts accurately reflect their social and environmental impact, and consider the broader effects these practices have on society and the environment.
For smaller companies, another key area for growth lies in implementing publicly accessible grievance procedures. Tracking and addressing grievances may not yet be common practice, but it’s becoming increasingly important for building trust and demonstrating accountability.
What is your biggest tip for companies working towards the new standards / this topic in particular?
As companies work toward meeting the new standards, one key piece of advice is to ensure that the company truly "walks the talk" when it comes to its purpose. A strong statement alone isn’t enough—companies must have concrete metrics to measure how they are living up to this purpose, as well as mechanisms to ensure their leadership is accountable for delivering on that purpose.
What is the overarching expectation of B Corps for this Impact Topic?
That B Corps act in accordance with a defined purpose grounded by stakeholder governance, contributing to an inclusive, equitable, and regenerative economic system for all people and the planet.
What are the most significant differences between the current standards and the new standards in relation to Purpose and Stakeholder Governance?
The main differences include the following:
having a grievance mechanism is required from all sizes of companies
a requirement on dividends and stock buybacks was introduced for larger companies
responsible marketing and communication was added as a new area to act on.
How will the standards related to Purpose & Stakeholder Governance be responsive to the different contexts of companies?
The requirements in this topic are adjusted to the size of the company where necessary to acknowledge that smaller companies may have less formal mechanisms and processes in place. For example, while all companies are required to have oversight from their highest governing body regarding progress on their purpose, social, and environmental performance, larger companies face additional requirements. These include:
Setting annual targets for the executive team related to the company’s social or environmental performance.
Integrating social and environmental performance targets into existing incentive and remuneration schemes.
What kinds of impacts does the topic hope to address?
The impact this topic aims to drive is threefold:
Overturn shareholder primacy: by ensuring that all stakeholders’ interests are understood and considered;
Put sustainability at the right level within the company: by ensuring that oversight is with those in a position of making decisions;
Fight greenwashing: by ensuring companies follow responsible marketing and communication principles, and regularly and transparently communicate about their impact.
If I’m a current B Corp, or seeking to become one, where should I focus my impact efforts for this core topic of Purpose & Stakeholder Governance?
In order to achieve the intent of the Purpose & Stakeholder Governance topic, the company should consider the following:
Align the company’s purpose with the intent of the B Corp legal requirement; contribute to a material positive impact on society and the environment.
Conduct regular stakeholder engagement and define what stakeholder governance mechanism fits well for your organization.
Ensure there is oversight of the company’s purpose, social and environmental impact and stakeholder considerations at the highest level of governance (sustainability embedded in incentive schemes, and performance targets).
Identify any risk of greenwashing in the company’s marketing and communication and implement a responsible marketing and communication strategy.
Regularly and transparently communicate about the company’s social and environmental impact.
Do you have more questions on the content of B Lab’s new standards? Join the Q&A session with the Standards Management Team on 29 April 2025. Log in to your regional community hub or reach out to your regional B Lab team to register. Want to learn more about the other Impact Topics in B Lab's new standards?
🪧 Government Affairs & Collective Action
🪧 Justice, Equity, Diversity & Inclusion [COMING SOON]
🪧 Fair Work [COMING SOON]
🪧 Human Rights [COMING SOON]
🪧 Environmental Stewardship & Circularity
🪧 Climate Action [COMING SOON]
¹ Note: the BSI standard is free, however in order to access it a company form needs to be filled out. ² Share repurchase/stock buyback: this is when a company buys back its shares from the marketplace. This results in a reduced number of shares on the market, which increases the ownership stake of the stakeholders, and can increase earnings per share.