Business school teaching case study: what’s in a label?

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Christopher Marquis is Sinyi professor of Chinese management at Cambridge Judge Business School.

When Dr Bronner’s recently announced it would not renew its B Corp certification, it sent ripples through the responsible business community. The decision from the family-owned US soap and personal care products company, which is known for its organic ingredients and social mission, raised an uncomfortable question: Are sustainability certifications evolving to meet today’s growing challenges or, as they are more widely adopted, are they becoming tools for greenwashing?

Since its launch in 2007, B Corp certification has become one of the world’s leading sustainability assurance schemes. Its B Impact Assessment tool — which measures companies’ performance across categories such as worker treatment, governance and environmental sustainability — is used widely. Almost 10,000 companies globally have now earned a B Corp certification. The UK alone is home to more than 2,500 certified B Corps, making it one of the fastest-growing markets.

But growth has brought its own difficulties. Critics, including some of the movement’s earliest champions, question whether the B Corp label still represents meaningful impact.

In 2022, Dr Bronner’s — alongside advocacy group the Fair World Project and several mission-driven brands — published an open letter to B Lab, the non-profit behind the B Corp standard. Their message: the certification risked losing credibility unless it adopted more rigorous, transparent, and enforceable standards. The tipping point was B Lab’s decision to certify Nespresso, a coffee pod company owned by Nestlé, a global conglomerate that some see as having a controversial record on supply chain ethics and sustainability.

To smaller companies such as Glen Lyon Coffee Roasters, Nespresso’s certification left them dismayed. They said it blurred the line between companies that were genuinely committed to positive impact and those using the label as a marketing shield. If businesses with fundamentally different approaches could receive the same stamp of approval, what did the certification really mean?

In response to the concerns raised, B Lab is rolling out Version 7 of its standards, which introduces more stringent and uniform requirements. Unlike the previous six versions, which require companies to achieve a score of 80 across all categories (allowing strengths in one area to offset weaknesses in another), the new framework requires minimum thresholds across specific domains such as climate action, human rights and fair wages. This shift aims to close loopholes that could allow companies to qualify even if their performance raised concerns in key areas.

How do we scale with integrity while keeping the rigour and credibility of the certification?

For Dr Bronner’s, the change clearly was too little, too late. The company has not walked away from certification altogether. Instead, it has turned to more focused frameworks. It helped found the Regenerative Organic Certification, a standard created in partnership with farmers, non-profits such as the Rodale Institute, and companies such as Patagonia. ROC takes a holistic approach by integrating rigorous benchmarks across soil health, animal welfare and social fairness into its process.

More recently, Dr Bronner’s also co-founded the Purpose Pledge, a peer accountability network for independently owned, mission-led natural product companies. This initiative emphasises values-based commitments in governance, supply chain fairness and environmental sustainability.

What sets these efforts apart from B Corp is their tighter scope. They target specific industries or practices, allowing for more depth and precision in their requirements.

B Lab, in contrast, is attempting to build a universal framework for responsible business across 160 industries in more than 100 countries. It is also pursuing broader policy initiatives, from advocating for legal reforms that embed stakeholder governance in corporate law to working to shape EU regulations like the Corporate Sustainability Reporting Directive.

B Lab argues that its efforts to broaden its remit are essential to enable systemic change. Opening up to more multinationals was a good thing, B Lab co-founder Bart Houlahan told the FT in 2023 because it meant the broader business ecosystem could change for the better. But, he added, “we want to be incredibly careful. How do we scale with integrity while keeping the rigour and credibility of the certification?”

The question facing companies that want to be more sustainable is not simply whether to certify, but how, why and with whom. Should they pursue highly tailored certifications that go deep in one area, or broader ones that cover more ground but may offer less specificity? More generally, can voluntary standards truly reshape business at scale, or is government regulation needed to enforce accountability to society and the environment?

As certifications proliferate, the challenge is to enable businesses, investors and consumers to separate genuine impact from marketing and to develop tools that can hold businesses accountable in time to meet today’s urgent challenges.