We are continuing our learning journey deep diving into the new B Corp standards. Previous blogs have examined the Environmental aspects and Purpose and Governance aspects of the draft requirements. Today’s blog focuses on people and culture, specifically the Fair Work and JEDI Impact Topics, and includes the latest proposed updates based on B Lab’s Second Consultation Summary Report released in September 2024.
Workers sit at the heart of every business and looking after them is fundamental to delivering the mission of the organisation. The draft new B Corp standards build on the existing requirements around wage equity and justice, equity, diversity and inclusion. The standards also include a new notion of workplace culture with methods for measuring and improving this over time.
What people and culture topics are covered in the new standards?
In the draft standards released in January 2024, Workplace Culture and Fair Wages were listed as two separate Impact Topics. However, the Second Consultation Summary Report recently announced that, based on stakeholder feedback, these two topics will be merged in a single Impact Topic: Fair Work. This change consolidates all labour requirements related to a company’s own workers in one place. Additionally, new labour related sub-requirements, such as zero hours contracts, shift patterns and worker overtime, which are captured in the Disclosure Questionnaire (DQ) in the current standards, are also proposed to be included in Fair Work. Finally, holding space and taking continuous action on Justice, Equity, Diversity and Inclusion (JEDI) is now mandatory for all companies and captured under a dedicated JEDI Impact Topic.
Fair Work (new proposed Impact Topic)
The new draft standards aim for B Corps to create a positive workplace culture where workers have a good experience and an open dialogue with their employer. They also aim to ensure that workers can afford a decent standard of living for themselves and their families, while promoting wage equity between workers.
Workplace culture refers to the attitudes, beliefs, and values within a workplace that influence workers’ sense of satisfaction, belonging, shared purpose, psychological safety, engagement, and happiness in the workplace. This goes beyond the current B Impact Assessment, which focuses on employee satisfaction and engagement as the sole measure of workplace culture.
All companies must measure workplace culture annually and anonymously, with analysis by factors such as gender identity and other characteristics. The results should then be used to drive continuous improvements in workplace culture:
- All companies must have decision-making processes that seek to collect and consider worker feedback
- All companies with more than 10 employees must have an active plan to improve the workplace culture
- Companies with >1000 employees must allow workers to seek representation such as through a union or worker committee
Companies must also pay fair wages to improve standards of living for all workers and ensure wage equity between workers.
- Companies must work towards wage equity for equivalent positions, starting with not requesting wage histories from job applicants.
- Companies must also provide transparency on salary scales and mechanisms for reviewing salaries and other benefits.
- Large companies must take steps towards ensuring wage equity among workers such as measuring and reducing the gender wage gap. Larger companies may also have to publicly disclose their gender wage gap.
- The draft standards require companies to pay workers a living wage or equivalent, through a variety of options including using a living wage benchmark, allowing workers to collectively bargain or agree on a wage, or paying base wages at least 20% above the legal minimum in the country and location of operations. However, recognising the lack of uniformity in living wage benchmarks globally, B Lab is exploring ways to simplify this requirement, making compliance more flexible while still maintaining rigour.
- The draft standards published in January 2024 also require large companies to take steps towards enabling suppliers to pay living wages; the Second Consultation Summary Report suggests that this could be moved to Human Rights Impact Topic.
Justice, Equity, Diversity and Inclusion (JEDI)
The new standards introduce an Impact Topic dedicated to Justice, Equity, Diversity and Inclusion (JEDI). The aim is that all B Corps have inclusive and diverse work environments and contribute meaningfully to just and equitable communities.
- Companies with >10 workers must facilitate a discussion or a survey on JEDI in the workplace
- Companies with >50 workers must analyse data by gender identity for at least five people-related business processes such as employment status, retention, attrition or turnover rates, recruitment, promotion, training opportunities, etc. Larger companies must analyse the data based on another social identity characteristic also such as education status or religion.
- All companies must have an active JEDI action plan, with a varying minimum number of commitments depending on the company’s size. While taking meaningful action and sharing progress with all workers is mandatory, there is considerable flexibility in how companies can meet this requirement. B Lab has proposed 23 potential actions, allowing each company to tailor its JEDI plan to its specific context. These actions may include:
- training leadership on JEDI
- increasing proportion of board and/or executive team members from underrepresented groups to reflect the diversity of the company’s local surroundings
- setting up employee resource groups
- implementing inclusive hiring practices
- assessing and redesigning the company’s products/services for inclusivity
- and more. See the full list on the draft standards website.
What are the main evolutions from the current B Impact Assessment?
Workplace culture was not covered as such in Version 6 of the B Impact Assessment (launched in January 2019), so we’re pleased to see it highlighted in the draft new standards, and to see B Lab’s definition of workplace culture expand beyond ‘engagement and satisfaction’, allowing businesses to fulfil the intended impact of the requirement in a way that respects their unique context. At Greenheart, we agree that a positive workplace culture – rooted in shared purpose, psychological safety and worker wellbeing – is essential to our business and the delivery of our services. Improving workplace culture in the supply chain is another new element of the draft standards ; it falls under the Human Rights Impact Topic.
In Version 6 of the B Impact assessment, companies could earn almost 5 points for paying a formally benchmarked living wage sufficient to support an individual and their family, though this was not a mandatory requirement. Making this a requirement is a significant change in the new standards. However, stakeholders have expressed concerns about the feasibility of this requirement. B Lab’s willingness to explore ways to simplify compliance with this requirement – while still maintaining rigour – will be welcomed by businesses, particularly given the lack of uniformity in living wage benchmarks globally.
Additionally, the recent update that new sub-requirements regarding contracts, overtime and shift/zero-hour contracts will be included in this impact topic is a welcome change as it means that this data can be verified and brings all labour-related requirements in one place.
Mandatory requirements on the Justice, Equity, Diversity & Inclusion (JEDI) topic are very welcome as they recognise the importance of all businesses formally committing to and acting on JEDI, while providing generous flexibility in how this requirement is met, thus ensuring that actions can be tailored to each company’s particular operational, cultural and geographic context. The current version of the B Impact Assessment allows companies to capture characteristics such as diverse leadership or actions to create an inclusive workplace, but none of these were required.
Finally, other topics covered elsewhere in the new standards affecting employees are Grievance and remediation procedures which are covered in the Purpose & Stakeholder Governance topic. You can find more information in our previous blog New B Corp Standards: Purpose and Governance Focus.
More information on this blog series
The B Corp Certification standards are evolving and the development process is still underway. Here at Greenheart, we’re keeping our fingers on the pulse as B Lab shares information on what the new standards will mean for certified and aspiring B Corps. As discussed in our previous blog on The Future of B Corp Certification we shared that the changes will affect companies certifying from 2026 onwards, introducing a set of mandatory performance requirements.
Check out our previous blogs in this series, which focused on the Environmental aspects, and the Purpose and Stakeholder Governance aspects of the new standards. Still to come in the series is a final blog with a focus on Value Chain and Human Rights.
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Or speak with us about how the updates to B Corp standards will affect your business by emailing contact@greenheartbusiness.com.