Inside the B Corp application process: Data availability a critical necessity

Accounting firms considering applying for B Corp status must ensure they gather “as much data as possible” in order to reduce internal friction, accounting market participants have said.

“There’s a lot of data required, and in areas that you might not necessarily think of, such as with employee and supplier emissions and practices,” says Lauren Kelly, head of marketing at mid-tier practice Gerald Edelman.

The firm, ranked 51^st in Accountancy Age’s 50+50 index, is currently in the preliminary stages of applying for B Corp status.

“There was an expectation that we’d just fill out the questionnaire and we’d be done – but then you realise how in depth it is and that you need hard evidence to support everything you’re saying.”

The practice has recently completed the first stage of the application process – a questionnaire referred to as the B Impact Assessment, which provides candidates with a preliminary impact score. B Lab requires applicants to raise their score to 80 to be considered for B Corp status.

According to Kelly, Gerald Edelman has received a preliminary impact score of 45, and is currently undertaking an internal review process to assess where improvements can be made.

But she also notes that, despite falling short of the B Lab standards in the first instance, the firm is in a much stronger position than it might have otherwise been. She largely attributes this to the formation of an internal sustainability committee years prior to the firm’s application.

As part of this initiative, the practice began producing an annual carbon footprint report. Kelly argues that this proved to be a significant advantage in the B Corp application process.

“It’s easy to underestimate how much of that information is required. If we had started the process without that [report], we definitely would have ended up having to do it anyway.”

Gerald Edelman’s application follows a flurry of B Corp activity in the UK accounting market. In October 2022, London-based BKL confirmed that it had attained the status, making it the first firm in the Accountancy Age 50 + 50 to do so.

Others quickly followed suit, with Brett Nicholls, Cooper Parry and Kreston Reeves all becoming accredited in 2023.

Scotland’s Chiene + Tait also confirmed to Accountancy Age earlier this month that it has begun the application process.

A ‘robust’ application process

Echoing Kelly’s view, Simon Bussell, BKL’s marketing and business development director, attests to the mass of analytics data the firm had to produce during its application process.

He explains that B Lab focused in particular on the firm’s people and talent (its highest scoring category in the Business Impact Assessment), meaning that various datasets on areas such as background, gender and salary had to be produced.

“If I were to go back and give myself some advice, it would be to make sure you’ve got as much data as possible. It is robust, and there are various data gathering stages that you need to go through.”

But Bussell also notes the relative ease of BKL’s application process, arguing that he was in a “privileged position” due to “knowing the business well” and having buy-in from the executive committee.

He explains that this allowed him to easily liaise with the firm’s HR director, head of finance and chief digital officer to acquire the relevant information.

Bussell also praises the initiatives put in place by the firm in the years prior to its B Corp application, arguing that this paid off when it came to being assessed by B Lab.

“We’ve been working for probably four or five years on developing our people and creating a diverse and inclusive environment. So anything you can do or have done in the past will help with your impact assessment score.”

Bussell argues that these efforts culminated in BKL being officially recognised as an ‘Impact Business Model’ in addition to receiving B Corp accreditation.

Described by B Lab as a “difficult” feat to achieve, this is an acknowledgement that a business creates a specific positive benefit for its stakeholders.

B Corp process a challenge for small firms

Gerald Edelman’s Kelly goes on to lament the overall footprint of the application process on a small accounting firm, arguing that the impact of the time commitment is being felt.

“You need to allocate a considerable amount of time to it, and you need to allocate people to be responsible for the different sections.

“It has certainly taken up a lot of my time, with being that central data collection point and having to actually fill out the application.”

But Kelly also argues that there are some upsides to being a smaller organisation. “You know everything about the business, so answering some of the questions is much quicker than it might’ve been otherwise,” she says.

This is echoed by Bussell, who points out that “the larger you are and the more sophisticated your business, the more things there are to assess”.

“You don’t see many big businesses that are B Corps, and that’s for a very good reason. It could be a resource constraint for smaller firms because they’ve got fewer people, but they’re assessing a smaller business so I think it’s proportionate in that sense.”

‘You don’t want to be left behind’

Bussell also argues that, regardless of time or resource constraints, the benefits of becoming a B Corp far outweigh this.

He particularly hails the significance of entering the B Corp community, meaning “you’re exposed to more people and doors are a lot easier to open”.

In addition to this, he says that the accreditation has “galvanised” the firm to formulate a new ESG strategy and hire an impact project manager to help drive it, in addition to receiving requests to bid for work due to the status.

“So there’s been a range of softer benefits and more tangible ones in terms of new projects and client wins too. I can’t say a single bad word about it overall.”

Similarly, while noting the various challenges involved, Gerald Edelman’s Kelly acknowledges the value that B Corp status could bring to the firm.

“Obviously in the short term it’s going to be time and money and you won’t see much tangible benefit. But ultimately, you don’t want to be left behind.

“A lot of organisations are becoming more conscious about their suppliers and how committed they are to sustainability, so if clients are doing that with their accountants, we want to be competitive and highly regarded in that sense.”