Expert insight: What the new B Corp standards miss out – and why it’s important

The traditional divide between businesses that make money and charities that do good is breaking down. Governments, investors and consumers increasingly expect companies to take responsibility for their social and environmental footprint by identifying and managing risks through ESG strategies. But expectations are shifting. There’s also a growing recognition that business can go further just than operate ethically. They have a powerful role to actively contribute to solving meaningful social and environmental problems. This is a shift from ‘operational’ to ‘solution-focused’ impact.

While operational improvements, such as reducing emissions, paying fair wages and improving governance are essential, they are not the same as building a business around a problem you are trying to solve. Many social enterprises and impact-driven businesses are designed to do just that: their core commercial model creates solutions for specific problems. 

The shift to a solutions-focus comes at a time when social and environmental responsibility is under growing scrutiny. Cuts to ESG investment, political backlash (in the US and elsewhere), and the dilution of climate commitments have made it harder for companies to communicate responsibility without facing accusations of “greenwashing” or “woke capitalism”. ESG is criticised as vague, inconsistent and more about managing risk than creating change. In this climate, the credibility of frameworks like B Corp matters more than ever.

Managing for impact doesn’t mean ignoring profit. It means aligning financial success with meaningful outcomes

Yet even B Lab, the nonprofit behind B Corp certification, faces questions about whether it’s doing enough. When Dr. Bronner’s – the highest-scoring B Corp globally – publicly withdrew citing weak standards, it warned that the certification risked becoming a marketing tool. 

A deeper concern goes beyond whether businesses are meeting ethical standards, to whether they are making a meaningful difference. How can businesses embed impact at their core, and manage it with the same rigour they apply to financial performance?

The launch of B Lab’s revised (version 7) standards comes at a critical moment. They raise the bar on operational performance: living wages, climate action, worker voice. But (at least for now) it is removing one of B Lab’s most promising tools: Impact Business Models (IBMs), an additional element that recognises companies intentionally designed to solve social or environmental problems through their core business. 

• Read more: Beyond certification: B Lab boss on why all B Corps must become advocates for change

B Lab has reaffirmed the value of IBMs and is consulting on their future. But pausing their use in certification creates a real risk. New B Corps will focus on meeting the revised operational standards but may lack incentives or guidance to develop or refine business models designed to solve meaningful problems. The momentum and attention generated by the rollout could miss the opportunity to deepen a shared vision of business as a force for good. 

This is a moment to strengthen not sideline the focus on solution-driven models, and to use the consultation to engage the wider community in how businesses can take more deliberate steps towards impact by design.

In this article, I argue for the importance of restoring and strengthening the IBM concept, not just as part of certification, but as a practical roadmap to design, manage and scale impact. I make a distinction between operational (how a business runs) and solution-focused impact (why it exists). 

Solution-focused businesses pursue impact with the same intensity that profit-driven businesses pursue profit. Impact is not a reporting obligation, it’s the organising principle of the business, shaping what it offers, how it grows and how it innovates. Drawing on insights from five certified B Corps in the UK, Cotswold Fayre, The Seasons Whole Foods, Redemption Roasters, Redroaster and World of Books, I explore how businesses can align purpose, operations and innovation to deliver impact by design.
 

From responsible business to solving real-world problems

The B Corp certification is built on the idea that businesses operate responsibly, creating value for shareholders while also working towards positive impact on workers, customers, communities and the environment. Responsible businesses focus on reducing emissions, treating staff fairly and building inclusive cultures. This operational impact is essential, but it is not the same as being designed to solve a problem. Often, impact is framed in terms of what’s avoided: waste, exploitation, carbon emissions. Solution-focused businesses ask a different question: what change are we here to create, and how can our model be part of the solution?

This distinction was at the heart of the previous B Corp standards. Unlike general operational improvements, IBMs rewarded depth and intentionality, recognising businesses that embed solutions into the heart of their commercial strategy. That principle remains vital, even if the current version of the standards doesn’t yet reflect it.

Take organic food. Organic farming is better for biodiversity, soil health and human wellbeing. A retailer selling organic produce contributes by making those products more available. But a solution-focused business goes further: it asks how to improve affordability, strengthen local supply chains, expand access and accelerate the shift to sustainable food systems.

The Seasons Wholefoods, an organic food retailer in East Sussex, does exactly this. It doesn’t just sell organic products, it exists to improve diets, support local farmers and regenerate ecosystems. It sources locally, partners with underrepresented suppliers, and uses pricing to make organic food more accessible, not just to meet demand, but to drive systems change in how communities eat and farm.

Defining a clear pathway to impact 

To deliver impact at scale, businesses need a clear pathway, defining the problem, who they serve, the actions they take, and how those actions lead to positive outcomes. Some call this a Theory of Change. Whatever the label, it brings clarity and makes impact manageable. 

Redroaster’s partnership with Team Domenica exemplifies this. Team Domenica provides foundational training and post-placement support. Redroaster offers paid roles and coaching. Together, they create employment pathways for people with learning disabilities, reaching individuals who would otherwise be excluded and supporting them to thrive.

Redemption Roasters was founded to reduce reoffending. It integrates training and employment for prison leavers into every part of its operations. Inclusion isn’t an HR goal, it is the business model. Coffee sales support a public good: safer communities.

World of Books is a circular economy business that reduces waste and promotes literacy. Beyond resale of books, it reinvests in redistribution systems, carbon tracking and literacy programmes, creating a reinforcing cycle where scale supports both commercial and social impact. 

Cotswold Fayre creates impact by amplifying others. As a wholesaler for 400+ ethical food suppliers, it helps them reach larger markets and improve sustainability and impact practices, shifting norms across the sector.

Theory of Change shouldn’t be optional. It’s a practical tool for design, management and improvement, not just measurement

A clear impact pathway enables these businesses to align their operations, products, people and partnerships with their goals, and communicate that value credibly.

That’s why B Lab’s consultation on IBMs matters. Rather than removing IBMs, B Lab could evolve them, asking businesses with a defined purpose to show how they deliver it. Theory of Change shouldn’t be optional. It’s a practical tool for design, management and improvement, not just measurement.

Managing for impact like managing for profit

Managing for impact doesn’t mean ignoring profit. It means aligning financial success with meaningful outcomes. This starts with reframing what success looks like. Growth means growing impact, often through scale. Efficiency means doing more good with less and not compromising values. Product development is not just about what customers want but about meeting real needs.

Redemption Roasters embodies this. Its mission to reduce reoffending shapes every part of the business, from roasting coffee to training teams. Inclusion is not a charitable extra, it’s why the business exists.

Designing business for impact

Ultimately, solution-focused businesses don’t just try to do good things. They build impact into their commercial logic. As they grow, their ability to solve meaningful problems grows with them. World of Books illustrates this. As it scales its resale model, it reduces waste, promotes access to books and funds literacy programmes. Its commercial success has enabled further innovation, from carbon tracking and surplus redistribution to establishing a foundation supporting literacy initiatives. Each innovation builds directly on the company’s core mission.

The new B Corp standards improve operational rigour. But they risk sidelining the transformational potential of business. Without a focus on IBMs and clearer guidance on impact pathways, we may get better compliance without encouraging better solutions.

Header photo: The Seasons Wholefoods aims to drive systems change in how communities eat and farm. All photos supplied by the featured businesses.