In the current rapidly evolving responsible business landscape, avoiding greenwashing is critical. To ensure credibility, organisations not only face the important challenge of embracing sustainability, but also choosing the right third-party certification to effectively showcase their achievements. With a multitude of sustainability certifications available, it can be confusing working out which one to pursue.
To help demystify this, in this blog we shed light on two certifications – B-Corp and Climate Active – and provide insights to help organisations make informed decisions. While the two certification schemes share a common goal of sustainability, they differ in their purpose, focus, certification criteria, global reach, associated costs, and scope of impact. Understanding these differences is crucial for organisations seeking the right certification for them.
Purpose and focus
B-Corp is a rigorous and holistic international business standards framework that measures a company’s social and environmental impact. It is designed for for-profit companies who want to demonstrate that they meet high standards of social and environmental performance, transparency, and accountability. B-Corp certification evaluates a company’s overall impact on stakeholders, including employees, customers, suppliers, communities, climate and environment, and encourages businesses to adopt more sustainable practices and go beyond compliance across their operations.
Climate Active is an Australian government program that certifies businesses, events, products/services, precincts and events as carbon neutral. Its primary focus is on reducing greenhouse gas emissions and promoting carbon offsetting to combat climate change. Climate Active certification requires detailed measurement of an organisation’s carbon footprint and its efforts to reduce and offset emissions, enabling robust assessment and assurance of climate change claims and credentials.
B-Corp certification evaluates a company’s performance in five key areas: governance, workers, community, environment, and customers. To certify, companies must pass a risk review, score a minimum of 80 points in the B Impact Assessment, make a legal corporate governance commitment to be accountable to all stakeholders, and be transparent by publishing their performance on their B Corp profile. B-Corp certification goes beyond carbon neutrality and verifies all aspects of sustainable business practice.
Climate Active certification requires organisations to calculate emissions from direct operations, energy use, and their value chain. To achieve certification, organisations must demonstrate ongoing efforts to reduce emissions and purchase verified carbon offsets for any remaining emissions. This targeted focus ensures that certified organisations are taking substantial steps toward combating climate change.
B-Corp certification is a global business performance standard administered by the non-profit organisation B Lab via regional subsidiaries. It is recognised internationally, enabling certified companies to join a rapidly growing global network of certified B-Corporations. This global reach enhances collaboration and knowledge-sharing among diverse organisations striving to make a positive impact towards an inclusive, equitable, and regenerative economy.
Climate Active certification is specific to Australia. Managed by the Australian government’s Department of Industry, Science, Energy, and Resources, it primarily focuses on Australian organisations. This localised approach enables the program to address specific environmental challenges within the country.
Costs to achieve certification
Climate Active certification costs include Climate Active’s licence fee, third-party verification fees, and carbon offset costs (which is typically the largest component). The carbon market offers many different offset projects at a range of market-based costs. For an organisation with total emissions of 2,000 tonnes of CO2-e, the organisation certification would cost between $25,000 and $120,000 to become carbon neutral for FY 2022 based on pricing for a range of Climate Active compliant carbon offsets available as of April 2023.
To become a Certified B-Corp, eligible companies must submit their assessment for verification and pay relevant fees throughout the certification process. For a mid-size company with an annual revenue of between $3 million to $5 million, fees include a one-off submission fee of $250, a one-off verification fee of $2,100, and annual fees of $3,500. The submission fee is fixed at $250, while the other fees vary with company revenue. Organisations can also opt to hire a specialist B Consultant to steer and advise them through the process, which entails additional fees.
There are currently 323 Climate Active certified organisations in Australia, including both private firms and local governments. Worldwide there are over 7000 certified B-Corporations, with 560 of these based in Australia and New Zealand, representing industries from fashion and accounting to waste management. Larger certified B Corps include Unilever ANZ and Nespresso, and Danone has committed to becoming fully certified across the company by 2025.
B-Corp and Climate Active certifications are distinct but complementary in their pursuit of sustainability. Both certifications are valuable in promoting sustainable business practices, but they address different dimensions of responsibility. Companies are free to pursue either certification scheme and, depending on their ambition and commitment, could choose to seek certification under both schemes simultaneously.
If your organisation is looking to align its values with a recognised sustainability certification, we are here to help. Our team specialises in guiding businesses through the Climate Active certification process. Contact us today and let us assist you in achieving the certification that best suits your goals and values.
If you need help with B-Corp certification, we recommend Andrea Spencer-Cooke at One Stone Advisors. Andrea has been involved with the B movement for over a decade, both in UK (as co-founder of the UK’s first women-owned B Corp and 2017 Best for the World Honouree) and in ANZ, as a certified B Corp since 2019, member of the inaugural B Council and one of B Lab’s first trained B Consultants and B Facilitators. Andrea can be reached at email@example.com.
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