Companies with direct involvement in controversial industries

Please review the statements below for an overview of the existing industry/practice-specific risk standards for companies with direct involvement in these practices or industries. You can click on the links to learn more detail about these standard requirements, as well as the research and rationale reflected in the risk standards development. 

WHAT IS DIRECT INVOLVEMENT, AND WHAT DOES IT MEAN FOR MY COMPANY?

B Lab defines direct involvement as: When the company is part of the industry. Occurs when a company’s own actions or omissions directly leads to adverse impacts. If a company does not have direct involvement but has clients in controversial industries, a different assessment framework applies, learn more here.

The absence of a B Lab position and standard on an industry or practice with potential negative impacts does not mean that B Lab does not consider the issue controversial. In B Lab’s new standards, these issues will no longer need standalone requirements - they will be covered by the Impact Topics of the new standards, addressed through an updated risk assessment process or integrated into ineligible industries. 

While we await the release of the new standard, or the development of a relevant assessment framework for a specific industry, a company’s certification status may remain paused. To see a list of industries in this situation, see here. B Lab representatives will be in touch with companies when a pathway to certification or decision on ineligibility has been determined.

HOW HAVE THE EXISTING RISK STANDARDS BEEN DEVELOPED?

Once the need for a new set of standards or processes is determined, these are developed via a research and stakeholder engagement process, presented to the Standards Advisory Council for a decision, and ultimately ratified by B Lab's independent Board of Directors. The potential outcomes of new processes for a particular industry or practice are the following:

• Companies in the industry/engaging in the practice are ineligible for certification 

• Companies in the industry/engaging in the practice are eligible for certification after remediation through meeting additional requirements (risk standards) and disclosure on how they are meeting the risk standards

• Companies in the industry / engaging in the practice are eligible for certification after disclosure on how they are meeting the risk standards

• Companies in the industry / engaging in the practice are eligible for certification with no further action

EXISTING INDUSTRY AND PRACTICE SPECIFIC RISK STANDARDS

Agribusiness Producers in Brazil (2020)

Agribusiness producers that operate within the Brazilian agribusiness industry are exposed to increased environmental and social risks because of their geographic location, especially within areas of high conservation value, such as the Amazon, Cerrado, and Atlantic forest biomes. Agribusiness companies that operate in those regions are required to meet specific requirements regarding deforestation and land conflicts to be eligible for B Corp Certification.  

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Banking in Switzerland (2019)

Private banking in Switzerland is controversial because of its historic and ongoing lack of transparency that has at times enabled tax avoidance, fraud, or money laundering. In Switzerland, companies involved in private banking are eligible for B Corp Certification if they can demonstrate management practices that effectively screen clients for criminal activities in compliance with local and international regulations.

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Bottled Water Companies (2021, revised) Bottled water companies are controversial because of issues related to water usage and access, as well as the waste produced by their business model. Bottled water companies are required to meet requirements around sustainable water usage, fair water access, and waste management to be eligible for B Corp Certification.  

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Cannabis-Related Products (2019) 

Cannabis and cannabis-related products are subject to controversy because of their historic and evolving legal status, as well as concerns about the potential harm that the products may cause. Companies involved with cannabis products are eligible for B Corp Certification depending on a variety of factors, including their legal status and whether they produce products designed for medical or recreational use.  

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Casino Industry Companies (2020)

Casinos are controversial due to the potential harms of their business model, problem gambling, and the broader negative impacts on the communities in which they operate. Companies that have a meaningful and strategically connected involvement in the operation of casinos are eligible for B Corp Certification only if they are able to demonstrate that they have met the highest possible set of practices to sufficiently manage potentially negative impact. 

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Charity Lotteries (2022)

Charity lotteries can raise concerns around problem gambling, disproportionate impacts on low income individuals, and the performance and transparency of charity lotteries’ donations to charities. Privately-run lotteries that are not Charity Lotteries are currently ineligible for B Corp Certification. Charity lotteries are eligible for B Corp Certification if they meet additional requirements.

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Debt Collection Agencies in Emerging Markets (2019) 

Debt collection agencies in emerging markets are controversial because of claims about unethical treatment of borrowers and concerns over accuracy, privacy, and security of borrowers’ data. Companies in the debt collection industry in emerging markets are eligible for B Corp Certification if they proactively manage and demonstrate leadership in this context. 

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Engineering Consulting Companies with Clients in the Defense Sector (2020)

Companies that provide engineering consulting services to clients in the defense sector are controversial because their services could be misused in ways that may harm others. Companies that derive more than 5% of their annual revenue by providing engineering consulting services to clients in the defense sector are eligible for B Corp Certification as long as their services have low-severity impacts and meet specific requirements to manage their potential harm.

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Financial Services in Tax Havens and Wealth Planning Structures (2022)

Companies in the wealth planning structures industry play a significant role in global wealth holding and creation. Given the important nature of their services, their operations and business models also have associated risks, with the most material potential risks related to concealment of beneficial ownership and wealth sources, money laundering and corruption, and tax evasion and avoidance. Wealth planning structures companies and other financial service companies that operate in jurisdictions in the Tax Justice Network’s Corporate Tax Haven Index with a 100 Haven Score and do not exclusively serve clients physically resident in that jurisdiction are currently ineligible for B Corp Certification. All other wealth planning structures companies are eligible if they meet additional requirements.

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For-Profit Higher Education (2015)

For-profit higher education providers are controversial for concerns about their business models, recruiting practices, and educational quality. They are eligible for B Corp Certification only if they meet additional minimum score requirements detailed on the higher education addenda of the B Impact Assessment.

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Fossil Fuels & Energy Companies (2020)

Fossil fuel and energy companies are disproportionately responsible for greenhouse gas emissions that contribute to climate change. Companies involved in the production and sale of fossil fuels, including those that generate or sell energy derived from fossil fuels, are eligible for B Corp Certification if they are not engaged in specific prohibited practices regarding extraction, lobbying, and financial incentives; have successfully transitioned their energy portfolio to be at least 50% carbon free; and have committed to make progress towards transitioning to a fully carbon-free portfolio within specified timeframes. 

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Marketing of Breastmilk Substitutes (2022) 

The marketing practices of companies involved in the production and sale of breastmilk substitutes, defined by the WHO as products for infants aged 36 months and under, are controversial because of the risk that certain marketing practices may create an undue influence on a mother’s choice to breastfeed, which could in turn negatively impact the health of infants. Companies involved in the marketing of breastmilk substitutes are eligible for B Corp Certification if they meet additional requirements.

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Mining Industry (2021) 

While companies involved in the mining industry play an important role in society and our economy by providing essential products, creating jobs in rural communities and stimulating economies across the globe, the mining industry also has several significant risks for negative social and environmental impacts.

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Orphanage-Based Volunteer Programs (2016)

Short-term volunteer programs in orphanages or childcare settings can pose individual and systemic risks to children in those settings. Volunteer placement companies that place volunteers in orphanages and childcare must have meaningful screening policies and practices in place in order to be eligible for B Corp Certification. 

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Pharmaceuticals

Several aspects of the pharmaceutical industry’s current business model are controversial due to the potential of decision-making that brings benefit to companies while harming public health. Pharmaceutical companies are eligible for B Corp Certification if they have not, in the past five years, engaged in lobbying or policy that endangers consumer safety; influenced unjustified delay in the introduction of an authorized generic product to the market; or engaged in price gouging of their products. They must also demonstrate outlined best practices.

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Prison Industry and Labor (2022) 

The prison industry is controversial because of issues regarding mass incarceration and institutionalized oppression in the justice system, as well as challenges with service quality, pricing, and possible exploitation within that context. Companies that manage or operate prisons are ineligible for B Corp Certification globally. Companies in the United States and Canada serving or supporting prisons, including those who utilize prison labor, are placed under indefinite moratorium and are ineligible for certification; however, companies outside of the United States and Canada that serve prisons or utilize prison labor may be eligible as long as they meet additional requirements to manage potential risks.

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Serving Governments Tied to Human Rights Violations (2020)

Companies that serve governments with ties to human rights violations are controversial due to the potential for their products or services to be misused in ways that either directly perpetuate or are complicit in such violations. Companies are ineligible if there is a substantial risk that their products or services are tied to or complicit in human rights violations, as evaluated by the geographic region where they operate, the nature of their products and services, and the specific government programs served.

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Tax Strategies & Tax Advisory Services (2020, revised)

Taxes are an essential contribution to a healthy society and companies have an ethical responsibility to pay fair amounts of taxes. To be eligible for B Corp Certification, companies are required to pay taxes in each jurisdiction that appropriately reflects their actual income; tax advisory companies are required to advise their clients in ways that follow these requirements, as well. 

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Water Utilities (2022)

Water privatization brings potential risks, such as lower water quality and related public health concerns, higher water rates, and corruption. Companies involved in lobbying or policy advocacy for cheaper water prices or weaker regulations, and companies with unresolved stakeholder concerns over its access to water sources or over its interactions with the public sector are ineligible for B Corp Certification. All other companies are eligible if they meet additional requirements.

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Whole Life Insurance Products (2019)

Whole life insurance products are controversial because of claims regarding the limited circumstances in which it is a financially preferable product for customers, its higher margins for brokers, and the lack of transparency about aspects of the product.

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Zoos, Aquariums, and Animal Parks (2016) 

Zoos are controversial because they keep animals captive in an unnatural habitat, can provide inadequate care services, and may participate in the capturing of wild animals to be brought into captivity. Zoos, aquariums, and animal parks are eligible to achieve B Corp Certification only if they are accredited by the Association of Zoos and Aquariums (AZA) or its equivalent, and focused on animal well-being and positive industry practices.

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While we await the finalization of the new standards for B Corp Certification, we encourage companies in the following industries to apply as there may be a path forward for certification, if they meet specific requirements. A review conducted by the Risk Team will determine if the company can proceed with certification at this time or if they will need to wait for the new standards to be rolled out.

(Last updated Nov 2024)