Guidance on
Baseline Requirements
for Multinational
Companies over
US$5billion
Updated December 2021

Contents

Introduction & Background

Application of the Guidelines
1.
2.
3.
4.
5.

ReportingMateriality Assessment
Material Issue Management
Tax & Government Affairs
Human Rights

Process Overview
Step 1: Baseline Requirement Consultation
Step 2: Multinational Standards Advisory Council Approval© B Lab 2021

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Introduction& Background© B Lab 2021

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Introduction & Background
Companies with more than $5B in annual revenue are required to participate in
the B Movement Builders program. Inspired by the leadership of the global B
Corp community, B Movement Builders is a collaborative coalition of leading
multinational companies that catalyze the global movement of business as aforce for good. The B Movement Builders program and the B Corp Certiﬁcation
are different but harmonized pathways. For multinational companies, achieving
B Corp Certiﬁcation is a long-term goal. The B Movement Builder program isdesigned as a journey to foster real transformation and change, aligned with theprinciples of the B Corp movement and allowing for impact throughout theprocess.
In order to become a Certiﬁed B Corp Certiﬁcation, parent companies with
$5 billion or more in revenue must meet minimum baseline requirements inaddition to the other certiﬁcation requirements (i.e. adopting stakeholder
governance, overall veriﬁed score over 80 on B Impact Assessment, passing
Disclosure Review process for controversial issues). These additional
requirements recognize that the overall scale and inﬂuence of these companies
also entail higher obligations to society, and are designed to ensure that B Corp
Certiﬁed multinationals have strong records of performance on important
aspects of their social and environmental performance in addition to achieving ascore of 80 or above on the B Impact Assessment.
These Baseline Requirements were developed as part of a two-year process withthe support of the Multinational Public Markets Advisory Council. Through thisprocess, the requirements went through an initial development phase with the
Performance Standards Working Group, a testing and reﬁnement phase withcompany testers and stakeholder commenters, independent market research andtesting, and were approved by B Lab’s Standards Advisory Council. An
independent Multinational Standards Advisory Council (MNC SAC) of expert
stakeholders across academia, business, and civil society was created to formallyreview and approve company actions against the Baseline Requirements, as wellas the revision of the requirements themselves as necessary in the future.
Further information on the members and governance of the MNC SAC isavailable here.

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Introduction & Background
The Baseline requirements are:1.

Reporting
An annual, comprehensive impact report transparent to the public using athird party standard (GRI, BIA, etc).

2.

Materiality Assessment
A transparent materiality assessment and stakeholder engagement process,conducted on a regular basis (minimum every other year with mechanisms
for intermediate updates as appropriate), and used to identify relevant
megatrends and material topics to the company, that includes a transparent
grievance / complaint mechanism, and that is overseen by the Board of
Directors.

3.

Materiality Issue Management
Management strategies on the most material issues relevant to the businessthat are overseen by the Board of Directors, and includes speciﬁc,aspirational performance goals, and demonstrated progress towards thosegoals. Management strategies and performance goals must be madetransparent to stakeholders.

4.

Tax & Government Affairs Disclosure
A disclosure statement on the company’s tax philosophy / approach andgovernment affairs (lobbying / advocacy) including the company’s overall
effective tax rate, that is overseen by the Board of Directors.

5.

Human Rights Policy
A speciﬁc human rights policy that is overseen by the Board of Directors, andincludes EITHER an explicit commitment to key human rights covenants(including the UN Declaration of Human Rights, UN Guiding Principles on
Business and Human Rights, and ILO Principles), OR identiﬁes the mostsalient human rights issues relevant to the business and its overall
operations through a human rights risk assessment.

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Introduction & Background
The focus of this document is to provide more detailed guidance on theinterpretation of each of these requirements by companies who are seeking to meetthem. For each requirement, the content of this memo has been divided into thefollowing subsections:●

Rationale: Explanation and justiﬁcation for why the requirement mattersand has been developed.

●

Guidelines for Acceptance: Minimum guidelines of company practices inorder to meet the requirement as well as information around what materials
would verify them.

●

Actions Not Meeting the Requirements: Examples of common company
practices that may seem to be meeting the requirement, but are not.

●Best Practices: Examples of best practices that go above and beyond theminimum baseline requirements that, even if not required, signal highperformance and should be encouraged.

●

Company Examples: Where possible, company references related to therequirement have been provided based on publicly available information.
These references may be meeting some or all components of therequirement, and do not necessarily indicate that the companies included
would be eligible for B Corp Certiﬁcation.

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Applicationof the Guidelines© B Lab 2021

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Application of the Guidelines
These Guidelines are intended to provide transparency for stakeholders into theprocesses that both B Lab Standards Team and the MNC SAC will use to determine
whether a company is meeting the Baseline Requirements or not. As companies
undergo formal review by the MNC SAC, these Guidelines ensure consistency in thereview process and the creation of precedents that demonstrate concrete actions
that companies can undertake to meet each individual Baseline Requirement.
Any company that has all of their Baseline Requirements approved by the MNC SAC
will be required to include incremental disclosure on their B Corp proﬁle which
outlines how they are meeting the Baseline Requirements.
These Guidelines will be updated as necessary as B Lab and the MNC SAC continue toimprove and reﬁne its processes based on lessons learned and feedback received
throughout their initial application.
All feedback on the Guidelines is welcome and can be sent to B Lab’s Standards
Management team at standardsmanagement@bcorporation.net© B Lab 2021

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1 Reporting© B Lab 2021

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1 Reporting
An annual, comprehensive impact report transparent to the public using athird-party standard (GRI, BIA, etc.)

RationaleMultinational companies operate globally and yet their impact can be felt
locally by many stakeholders in those societies. An impact report goes beyond
a company’s ﬁnancial bottom line to report on the impact to all stakeholders
across their value chain. The requirement for impact reporting reﬂects ademand for more transparency and accountability on how companies are
performing on their economic, environmental, and social impact, allowing
stakeholders to understand and make their own judgments about company
performance.
The use of a third-party standard for impact reporting ensures meaningfultransparency on a range of relevant economic, environmental, and social
issues in a way that is understandable and comparable across other companies.
It also acts as a trusted reference for regulators worldwide and encourages andenables credible non-ﬁnancial reporting of a company’s impacts, both
positive and negative.

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1 Reporting
Guidelines for Acceptance
For a company to meet this requirement, they would be expected to have acomprehensive report from the last calendar year that is set to a third-party
standard and is publicly available, for instance via a company website. Reports
could be presented in a variety of formats — including an integrated annual
report or a standalone sustainability / impact report — but must becomprehensive, in the sense that they cover all relevant facets of a company’s
economic, social, and environmental performance (not, for instance, a reportthat focuses only on labor practices). The report must use a third-party
standard, with the most commonly universally accepted standard forsustainability reporting being the Global Reporting Initiative (GRI). In the casewhere companies use another third-party standard, the standard would need
to be reviewed by B Lab’s Standards Management team and approved by theMultinational Standard Advisory Council.
Veriﬁcation that a company is fulﬁlling this requirement can be provided via
PDF (along with info about how to access the PDF) or online links to therelevant report from the last 12 months, together with proof that a third party
standard was used. This could be included in the report itself, provided
through supplementary documentation (such as an internally referenced GRI
Index), or linked to a veriﬁed online third party standard database, e.g., the
GRI Reporting Database which indicates at a minimum, Report Type —Citing-GRI.

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1 Reporting
Actions Not Meeting the Requirements●●© B Lab 2021

Participating in a third-party disclosure initiative such as the CDP or the
DJSI, while valuable for other reasons, would not meet this speciﬁc
requirement. These initiatives are not focused on broad-based public
transparency of performance data for all stakeholders, and, at least in
the case of CDP, would also not be considered comprehensive.
Having a non-ﬁnancial report that includes company createdsustainability metrics or info audited by a third party such as anaccounting ﬁrm would not meet the third-party standard requirement.
This type of audit conﬁrms the accuracy of information provided, but
not necessarily whether that information adheres to common andcomparable standards like GRI.

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1 Reporting
Best Practices●●●

Company’s report publicly features information about the third-party
standard used, such as a GRI index, and is not just an internal reference.
Company’s report features content related to each of the baseline
requirements described below.
Company’s report is integrated with ﬁnancial reporting to allow joint
analysis.
Company’s report is aligned to the Sustainable Development Goals.

Relevant Resources
GRI Reporting Database
B Impact Assessment
B Impact Assessment and GRI Mapping© B Lab 2021

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1 Reporting
Company Examples
Givaudan, a Swiss-based fragrance company with revenue of US$6.9 billion,
released their 2020 integrated annual report that is set to a GRI framework andavailable on their website. Besides reporting on the ﬁnancial performance ofthe company, the report clearly discloses information related to thecompany’s sustainability strategy, materiality assessment, and stakeholder
engagement, and identiﬁed material issues related to their four sustainability
pillars of their new 2025 strategy — Creations, People, Nature andCommunity. As well as highlighting the new company goals, the report also
reﬂects on the progress the company has made over the past four years. All of
their goals are aligned with the Sustainable Development Goals. The reportpresents an overview of their compliance with the GRI Core option forreporting, iterations to their reporting processes, and a link to their separate
sustainability report that includes a full GRI index.
Danone, a multinational food products company with almost US$30 billion inrevenue, recently released their 2020 Annual Report. This integrated reporthighlights their ongoing health, their environmental and social performance,and key milestones achieved during 2020. The company presents informationon their 2030 goals linked to their ‘One Planet, One Health’ mission. The
report is divided between ‘Impact and Performance’ and ‘Issues’ and provides
detailed information on the company’s non-ﬁnancial performance. The
company has a separate document for exhaustive extra ﬁnancial data for 2020
that maps their reporting against the GRI framework. The reports are publicly
available online on their company website.

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Materiality
Assessment

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Materiality
Assessment

A transparent materiality assessment and stakeholder engagement process,conducted on a regular basis (minimum every other year with mechanisms forintermediate updates as appropriate) and used to identify relevant megatrends andmaterial topics to the company, that includes a transparent grievance/complaint
mechanism and is overseen by the Board of Directors.

Rationale
Identifying material issues enables companies to focus on the sustainability issues
that are most relevant to their business and stakeholders, and while there may bevariability in how material issues are determined, it is necessary to do so with thebroad input of the company’s stakeholders, including those throughout their entire
supply chain. As part of a meaningful stakeholder engagement process, it is also
necessary to ensure the availability of a transparent grievance mechanism that isavailable to both internal and external stakeholders to remedy where a company may
have caused or contributed to a negative impact. Such a mechanism can also act as an
early warning system for companies and inform their broader economic,
environmental, and societal actions. Stakeholder engagement and identiﬁcation ofmaterial issues also enables companies to enhance strategic decision-making,identify business opportunities, and strengthen stakeholder relationships.
This requirement stipulates that materiality assessments should be updated at aminimum every other year in order to reﬂect what can be frequent and signiﬁcantchanges in both business practices and the context in which businesses operate,
which could potentially lead to new topics that are material to a business’s social andenvironmental performance (as in the case, for instance, of potential shifts as a resultof COVID-19). The every-other-year time frame also acknowledges, however, that
conducting materiality assessments every year may be a costly and unnecessary
process, and therefore is not a minimum requirement. It also provides a regular
opportunity for companies to learn, grow, and improve through meaningful
stakeholder dialogue by engaging often marginalised stakeholder groups, including
those in their value chain.

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Materiality
Assessment

These efforts, along with the other requirements that speciﬁcally call them out,
require Board of Directors oversight. A company Board of Directors is the highest
level of oversight within an organization; their approval signals that the topics
featured in these requirements are embedded throughout the entire company and are
related to the company’s overall purpose and governance. Overseeing the materiality
assessment helps boards understand and help efficiently drive action on the socialand environmental issues that intersect most directly with the business¹. While themateriality assessment itself may be carried out at a senior management level, theBoard or a relevant Subcommittee of the Board would be expected to be updated on
the materiality assessment strategy and outcome.

¹https://www.ey.com/en_us/board-matters/ﬁve-ways-boards-can-unlock-esg-s-strategic-value© B Lab 2021

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Materiality
Assessment

Guidelines for Acceptance
For a company to meet this requirement, they would be expected to have conducted amateriality assessment that identiﬁes a comprehensive set of economic, social, andenvironmental issues based on a cross-functional process that engaged a strategic
representation of internal and external stakeholders that are key to the company. In
order to ensure that a stakeholder engagement process is sufficiently meaningful,there should also be demonstration that a broad selection of stakeholders in theirvalue chain — such as civil society, NGOs, customers etc., including underrepresented
groups — to ensure that they are listening to often-marginalized stakeholders, thatthey have been engaged in the process, and that the material issues identiﬁed are
relevant to the broader impacts of the business on those stakeholders, not focusedsolely on company operations and ﬁnancial performance. Since best practices inmateriality assessment processes are continuously evolving and there is no single
deﬁned standard, it is not possible to prescribe speciﬁc practices for engagement, thenumber of stakeholders engaged, or the material issues that should be identiﬁed forthe context of any individual company at this time. Instead, B Lab and the MNC SAC
will review the overall processes, stakeholders engaged, and results of the materiality
assessment to determine that they have sufficiently met the guidelines provided here.
The ﬁnal outcome, in the form of a materiality matrix or a list of identiﬁed material
issues, should be publicly accessible either in the annual impact report and/or on thecompany website. Whether a part of its sustainability report and/or information about
its stakeholder engagement, the company should also have a publicly acknowledged
complaint/grievance mechanism available to all stakeholders.
Veriﬁcation that a company is fulﬁlling this requirement can be provided via PDFs orlinks to an online impact report or public company website that contains a recent
materiality matrix together with background information on the materiality
assessment process, including the types of stakeholder groups that were engaged. The
company should also provide a link to a transparent complaints/grievances
mechanism that is accessible and available to both internal and external stakeholders.

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Materiality
Assessment

In order to meet the expectation that companies engage in materiality assessment atleast every other year, a company could provide proof of an interim or ongoing review
of materiality via continual engagement with stakeholders to acquire and incorporatechanges in material topics, rather than conducting a “full” materiality assessment atsuch frequency; they would nonetheless be expected to conduct a full materiality
assessment at least every four years as well.
Board or Board Subcommittee oversight would be explicitly mentioned in the above
publicly available materials, a copy of the charter or policy that mentions oversightover identifying material social and environmental issues, or a copy of minutes (withsensitive info redacted) that demonstrates the materiality assessment andstakeholder engagement were discussed.

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Materiality
Assessment

Actions Not Meeting the Requirements
●

●
●

●

●
●

© B Lab 2021

A materiality assessment that focuses exclusively on topics related to the
traditional operation and ﬁnancial performance of the business (for example, afocus on efficiency, worker productivity, or customer satisfaction).
A stakeholder engagement process that failed to engage key external
stakeholders or failed to meaningfully take into account their inputs.
A materiality assessment process that fails to identify one or more key social orenvironmental issues that should be material to the stakeholders of thecompany (for example, an energy company that does not recognize climate
impact as material; a ﬁnancial service company that does not recognize thesocial and environmental impact of their investments) .
A complaint mechanism that is not broadly identiﬁed for stakeholder
complaints regarding social and environmental issues (for example, a customer
service complaints mechanism).
Reference to a third-party complaint mechanism that is non-binding without
an explicit commitment to participate when deemed material.
Oversight from the company’s management or executive committee but not theBoard of Directors, as it does not demonstrate the highest level of ﬁduciary
responsibility.

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Materiality
Assessment

Best Practices
●
●

●

●

●

© B Lab 2021

Company’s materiality assessment is conducted with or by a reputable third
party to allow for independence in the analysis.
Company implements the GRI 2016 Guidelines on Materiality deﬁning material
issues explicitly by the importance of material issues to stakeholders and theimpact of the company actions on those issues (rather than the impact thoseissues have on the company).
Company keeps record of all grievances and complaints and publicly reports on
progress and outcomes including inﬂuence on company materiality andreporting.
The company has a speciﬁc Board of Director Subcommittee focused onsustainability impact that has direct oversight of all relevant Baseline
Requirements for B Corp Certiﬁcation, including the materiality assessment
process and results.
Boards are provided training/educated on materiality assessment — ensuring acomprehensive understanding of key company stakeholders, engagement
methods, and associated processes.

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Materiality
Assessment

Relevant Resources
Materiality and Topic Boundary GRI
Deﬁning materiality What Matters to Reporters and Investors
Remediation and Grievance Mechanisms
Leadership Role and Accountability in ESG: A guide for Board and Directors
AA1000 Stakeholder Engagement Standard© B Lab 2021

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Materiality
Assessment

Company Examples
Boots Walgreens Alliance, an American pharmaceutical company with a revenue of
US$139 billion, conducted their most recent materiality assessment in 2020. While thecompany generally carries out materiality assessments on a three-year rotation, they
have various processes in place to ensure ongoing stakeholder engagement, such as
quarterly meetings with NGOs and civil society organizations, quarterly town hallswith local communities, and twice-annual employee feedback surveys. In light of theevents of 2020, they brought their materiality assessment forward by one year to
re-calibrate their material issues. Their materiality assessment process is based oncontinuous improvement and incorporates retrospective learnings from the base datacollected in their 2018 assessment, while also expanding the scope of the evaluation
timeline of issues to a ﬁve- and -ten year perspective in order to identify future andemerging issues. The assessment itself was carried out across cross-functional teams,
including the sustainability, reporting, marketing, consumer insights, operations,and ﬁnancial departments, as well as with third parties ‘Forum for the Future’ and‘Datamaran’. They invited 250 external stakeholders from NGOs, suppliers, retailclients, industry groups, government agencies, and insights and 350 internal
stakeholders across different employment tiers to engage through a mix of surveys,
interviews, and focus groups. To ensure a wide diversity of opinions, this was followed
by in-depth interviews with 45 stakeholders and combined with information from thevarious company engagement forums and 6000 consumer inputs from across theirglobal markets. As a result of the process, they identiﬁed 32 topics of relevance. The
ﬁnal materiality matrix and the materiality assessment process were included in theirannual report and are also being used to inform a new sustainability strategy to be
included in their 2021 annual report. The CSR Committee, an official subcommittee of
the Board of Directors, sponsored the materiality assessment process and reviewed
the ﬁndings and recommendations. Updates from the key ﬁndings from the process
were then presented to the main Board.

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Materiality
Assessment

Nestle, a Swiss food products company with revenue of US$99.7 billion, conducts aformal materiality assessment process every other year. The assessment was co-led
by the Public Affairs and Group Risk Management teams, and undertaken by anindependent third party. In their 2020 assessment, they integrated their Enterprise
Risk Management (ERM) process, to ensure that the wider sustainability issues wereincorporated into the risks and opportunities across the company. The Audit
Committee of the Board of Directors provides oversight on signiﬁcant risk exposuresand provides advice on the risk management process established by management. The
Nomination and Sustainability Committee of the Board periodically discusses how
other material non-ﬁnancial issues affect ﬁnancial performance, in addition toreviewing the company’s signiﬁcant stakeholders and their material interests.

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Material Issue
Management25

3Material Issue
Management

Management strategies on the most material issues relevant to the businessthat are overseen by the Board of Directors and include speciﬁc, aspirational
performance goals, and demonstrated progress toward those goals.
Management strategies and performance goals must be made transparent tostakeholders.

Rationale
Beyond just identifying and reporting performance on material social andenvironmental issues, to be considered a leader it is also necessary for acompany to demonstrate performance on those topics is itself leading. While
purposeful change does not happen easily or overnight, the creation ofmanagement strategies based on stakeholder engagement that include
time-bound aspirational goals enables companies to acknowledge where
improvements are necessary, and stay on track in the long term while making
incremental progress in the short term.
Key to this requirement is the concept of an aspirational goal, which isintended to be ambitious and transformational. Aspirational goals go aboveand beyond incremental goals, are generally in line with the Global Sustainable
Development Goals, and should largely set the bar as high as possible — only
lowering it where evidence proves that certain actions are unrealistic. In somecases, it may mean setting the bar beyond where a company knows it can go inorder to push the company to innovate beyond current limitations.
Board of Directors oversight is included for the same reasons as highlighted in
the above requirement, and the same acceptance criteria would apply todemonstrate awareness and approval of company management strategy ofmaterial issues.

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Material Issue
Management

Guidelines for AcceptanceFor the company to be meeting this requirement, they would need todemonstrate that they have created at least three clear management strategies
and aspirational goals. Goals would qualify as aspirational if they are:●●●Linked to the material economic, social, environmental issues identiﬁed
via their materiality assessment process, taking into consideration thecompany’s ability to impact and inﬂuence the issue.
Time-bound and long-term in their vision.
In line with planetary boundaries and social conventions (SDGs, Paris
Agreement, United Nations Guiding Principles for Business & Human
Rights).

And are meeting at least one of the following criteria:●●●

Industry-leading, i.e. can be demonstrated to substantially exceedindustry norms of performance on the given issue.
Science-based, i.e. aligned with best available science in regards to living
within planetary boundaries.
Would qualify for substantial credit in an Impact Business Model asdeﬁned in B Lab’s B Impact Assessment².

Speciﬁc examples of aspirational goals could include:●
Commitment to a living wage for workers in their supply chain●
SBTi approved climate goals●
100% gender equality across management globally●
100% of energy is from renewable sources, or other commitments in linewith the Future Fit Break Even Goals.
●
100% sustainable material inputs that are renewable, recyclable, or
reusable, or other goals set in line with the United Nations Global
Compact SDG Ambition Accelerator.

² Companies would be expected to make goals that meet the deﬁnition of the B Impact Assessment IBMsby being speciﬁc, material, veriﬁable, lasting and extraordinary. Due to the complex nature of assessing
and verifying IBMs, companies would be assessed on a case by case basis.
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Material Issue
Management

Because this requirement is focused on management of material issues, if a company
can demonstrate that their performance on a particular issue is already industry-leading,as determined by a reputable third party benchmark that is governed as a public good;
has a transparent globally applicable methodology; is tied directly to the relevantmaterial topic; and can be demonstrated to indicate industry-leading performance, thenthat counts as meeting one of their necessary goals. The company will be required tomaintain their leading edge performance over time to maintain eligibility. Eachbenchmark would need to undergo review and approval by the MNC SAC on acase-by-case basis.
Veriﬁcation that a company is fulﬁlling this requirement can be provided via PDFs oronline links to the company website or impact report that clearly shows management
strategies of material issues and their direct links to the aspirational goals. To
demonstrate how these goals are industry-leading, a company would provide researchor benchmarks that conﬁrm that they are outperforming their peers on these issues. To
demonstrate that a goal is science-based, a company would be expected to show
approval of the goal by an independent body such as the Science Based Targets Initiative.
To demonstrate that a goal is in line with one of the Impact Business Models (IBM)deﬁned in the B Impact Assessment, the company would need to demonstrate that thescope and company practices qualify for substantial IBM credit. Progress towards theirgoals can be demonstrated either in the annual impact report or on the company’s
website; in all cases, they should be transparent to stakeholders. Where goals do notmeet these criteria but may conform to the above general deﬁnition of aspirational, thecompany can submit their goals for review by B Lab’s Standards Management team andapproval by the Multinational Standard Advisory Council.

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Material Issue
Management

Actions Not Meeting the Requirements:●●●© B Lab 2021

Management strategies and goals that do not link to material issues identiﬁed by
the company through a recent materiality assessment.
Goals that are incremental in nature without reference to an external aspirational
benchmark, i.e. a 20% reduction in carbon emissions.
Inclusion or high ranking on the Dow Jones Sustainability Index or other leading
Sustainability indices as a qualiﬁcation for ‘leading performance,’ both because it
does not provide speciﬁc performance evaluation of individual issues, and becauseof questions about its differentiation of leading performance.

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Material Issue
Management

Best Practice●●●Company has aspirational goals for all issues identiﬁed as material, in
addition to just three.
Company has set goals that are not just-industry leading but are in fact
science-based (where possible).
Company goals go beyond the achievement of science-based targets
based on more accelerated timelines, or by seeking more positive orregenerative solutions, e.g., achieving net zero emissions by 2030 orgoing beyond net zero to become carbon positive.

Relevant Resources
Pivot Goals
Future Fit Goals
CDP
World Benchmarking Alliance
SDG AM
United Nations Global Compact SDG Ambition Accelerator© B Lab 2021

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3Material Issue
Management

Company Examples
In 2021, Unilever, the multinational consumer goods company with revenuesof almost US$60 billion, extended their commitment of providing a living wage
to everyone in their operations to providing a living wage or living income toeveryone who directly provides goods and services to their company by 2030.
This will apply to Tier 1 suppliers and their employees, outsourced
manufacturing, and their priority agriculture crops. In 2020, they added theprinciple of a living wage to their Code of Business Principles and recognisethat advocacy and collaboration will play a key role in achieving their goal
through a multistakeholder approach. This goal qualiﬁes as aspirational as it isindustry-leading, linked to material issues, time-bound and transformational
in its impact to the lives of stakeholders.
In 2020, Givaudan launched their new purpose-led strategy and 2030 goals.
One of their goals under the pillar ‘People’ aims to create parity between men
and women in leadership positions across all of their global markets bycommitting to 50% of senior leadership being women. This goal is linked toSDG 5, as well as to the company’s material issues, and it is time-bound. This
goal can be considered aspirational as it is in line with global full gender parity
rather than just an incremental increase.
BMW, the German car manufacturer with revenues of almost US$117 billion,
have set climate goals that have been validated by the Science Based Targets
Initiative in line with the 1.5 degree climate scenario. This includes reducing
their CO2 emissions by 200 million tonnes by 2030, equivalent to 20 times theannual emissions of a city with one million inhabitants. This target is divided
into ﬁve steps: to have 50% of global sales fully electric by 2030; leverage
circular economy principles; reach 50% less battery impact; incorporate
circular design and mono materials; and offset unavoidable emissions. This
goal qualiﬁes as aspirational as it is science-based, linked to the company’s
material issues, and in alignment with the SDGs. The company’s commitment
to reduce CO2 emissions while enabling the growth of the electric vehicle
market can be considered industry-leading in a global transition away fromfossil fuel powered vehicles.

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Tax & Government
Aﬀairs Disclosure32

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Tax & Government
Aﬀairs Disclosure

A disclosure statement on the company’s tax philosophy/approach andgovernment affairs (lobbying/advocacy) — including the company’s overall
effective tax rate — that is overseen by the Board of Directors.

Rationale
Providing transparency about a company’s approach to taxation and its tax
rate informs how companies are compensating for services that are deliveredby society. This becomes even more important for multinationals, due to
disparities in tax law that allow companies to legally exploit the global tax
system. Stakeholders are demanding that companies view taxation as anintegral part of their corporate responsibility, go beyond regulatorycompliance, and demonstrate transparency on how they implement andexecute their tax strategies to ensure they are aligned with the company’s
overall sustainability strategies and rhetoric.
This same level of transparency is being sought for a company’s approach toGovernment Affairs. Many multinational companies are positioned to lobby
governments for regulations that may beneﬁt their operations, but may also beat odds with their sustainability strategies and the best interests of society.
Therefore, having a clear policy on how a company deals with government
affairs — including stances on their approach to responsible lobbying andadvocacy — is vital for responsible multinational business leaders.
For issues pertaining to company strategy, such as materiality assessments
and material issues management, Board of Directors oversight can often be
through updates and progress reports. However, where policies are involved,
direct approval by the Board or Board Subcommittee is required to ensure thatthey ratify the decisions of senior management and are aware of any
subsequent legal obligations that may apply.

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Tax & Government
Aﬀairs Disclosure

Guidelines for Acceptance
For a company to be meeting this requirement, the company would need tohave publicly accessible policies or disclosure statements on their approach toboth taxation and government affairs. These could be stand alone documents
or integrated into another overarching company policy document e.g. a Code of
Ethics, as long as those topics are explicitly referred to within those policies.
The disclosure statement on taxation should clearly communicate thecompany’s tax strategy and responsible tax practices; include further
information on their approach towards compliance, transparency, and tax
risks; and outline key stakeholders with whom they engage. The company mustalso publicly disclose their global overall effective tax rate, which may be
included in the taxation disclosure statement or released in an annual report.
The disclosure statement on government affairs should clearly communicate
the company’s approach to responsible lobbying and advocacy and includes
information on political contributions, trade industry associations, public
policy positions and lobbying, and any political employee activity.
Veriﬁcation that a company is fulﬁlling this requirement can be provided via
PDFs or online links to documents or company websites.

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Tax & Government
Aﬀairs Disclosure

Actions Not Meeting the Requirements●●●© B Lab 2021

Reference to government affairs or tax within a general company
document that covers topics indirectly related to government affairs ortax, e.g., a Code of Ethics that only includes mention of corruption,bribery, and relevant policies.
A company that only includes their effective tax rate in ﬁnancial
documents but does not include broader disclosures about their tax
philosophy.
Company positions and actions that only focus on legal / regulatorycompliance35

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Tax & Government
Aﬀairs Disclosure

Best Practice
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Company tax position outlines a commitment to international Guidelines
for Multinational Enterprises set by the OECD.
Company is committed to the B Team Responsible Tax Code and has
created Responsible Tax Principles.
Company tax disclosures are aligned with the GRI Tax Standard andinclude the following:○
Disclosure 207-1: Approach to tax○
Disclosure 207-2: Tax governance, risk control and management○
Disclosure 207-3: Stakeholder engagement and management ofconcerns related to tax○
Disclosure 207-4: Country by country reporting
Policies, including effective tax rate, are included in other sustainability
related reports for accessibility of information to stakeholders.
Tax policy includes a link to company whistleblower policy.
Company government affairs policy includes principles for responsible
lobbying and aligns with the Responsible Lobbying Framework.
Companies are committed to not establishing a presence in low tax
jurisdictions for non commercial reasons.

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Tax & Government
Aﬀairs Disclosure

Relevant Resources
Global Forum on Transparency and Exchange of Information for Tax Purposes
GRI Tax Standard
Responsible Lobbying Framework
Lobbying, Governments, and Public Trust
McKinsey: Organising the government affairs function for impact
Transparency International EU© B Lab 2021

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Tax & Government
Aﬀairs Disclosure

Company Examples
Shell, a multinational oil and gas company with revenues of US$180 billion,
discloses their approach to tax on their company website, outlining theirapproach to tax compliance, their transparency on tax matters, and their
engagement with stakeholders and tax authorities. They are one of thefounding members of the B Team Responsible Tax Principles and publish theirTax Principles on their website. They also publish an annual Tax Contribution
report which reports on their effective tax rate, their approach to tax risk, andcountry-by-country reporting. They do not condone, encourage or support tax
evasion; their tax strategy is approved by their Board of Directors, who also
regularly review its effectiveness; and they maintain risk management andinternal control.
NN Group, a Dutch insurance and asset management company with revenue of
US$6.6 billion, has published their tax strategy on their company website. It
includes an acknowledgment of the important role that tax contributions playin the societies where they operate. They have created tax principles thatincorporate Compliance, Business Rationale, Relationship with Tax
Authorities, and Tax Planning. The company releases annual Tax Contribution
reports that disclose their effective tax rate; provide details on tax risks,
country by country reporting, and the stakeholders that they engage with; andcommit to OECD Guidelines on Tax. They also have a tax control frameworkthat monitors the implementation and execution of their tax strategy. A GRI
reporting framework index is also included that covers GRI Disclosure 207.1 4. The tax strategy is approved by the Management Board of NN Group andreviewed by the audit committee. In 2020, NN Group received the highest
ranking on the PWC Tax Transparency Benchmark for their clear and extensive
tax strategy.

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Tax & Government
Aﬀairs Disclosure

IBM, the American multinational technology company with revenue of
US$73.6 billion, discloses their approach to government affairs on theirwebsite under Philosophy and Governance. They commit to meaningfulmanagement, oversight, and accurate reporting with respect to their
engagement with government officials. They clearly state the actions that they
do and do not partake in with relation to government affairs. They also identify
the independent stakeholders they engage with, such as ‘Transparency
International’ and ‘The Centre for Political Accountability’. They provide
transparency on the following topics: Business conduct and ethics; Political
campaign contributions and expenditures; Public policy expenditures andlobbying; Public policy positions; Trade and industry associations; Employee
public service and political activity; Grassroots lobbying; and U.S. state
government lobbying. They ﬁle lobbying reports within the United States,
where required, and the European Union Transparency Register. They also ask
for any breaches to be reported through their own whistleblower forums,‘Open Door’ and ‘Speak Up’. IBM’s Government and Regulatory Affairs teamperiodically report to the IBM Board of Directors about the company’s policies
and practices in connection with governmental relations, public policy, andrelated expenditures.
Danone released version four of their Advocacy policy in 2020. It describes the
topics that they advocate for, the controls they have in place for tradeassociations in which they participate, the guidelines for employees, and links
to their internal whistle blowing policy via the Danone Ethics line. The
company does not make any political donations and they have arevolving-door policy for staff. They also provide further disclosure throughpublic reporting mechanisms, such as the EU Transparency Register and the US
Lobbying Disclosure Act. The Policy was approved by Danone’s Corporate
Compliance & Ethics Board and their advocacy strategy and Danone’s broader
positioning on advocacy is regularly discussed at the Board level. The policy
also includes links to several other related Danone policies, one of which istheir Integrity Policy providing further details on their approach to corruption
and bribery, assurance and auditing mechanisms, and adherence to nationallaws and accountability.

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5

© B Lab 2021

Human Rights
Policy40

5Human Rights
PolicyA speciﬁc human rights policy that is overseen by the Board of Directors andincludes EITHER an explicit commitment to key human rights covenants(including the UN Declaration of Human Rights, UN Guiding Principles on
Business and Human Rights, and ILO Principles), OR identiﬁes the most salient
human rights issues relevant to the business and its overall operations through ahuman rights risk assessment.

Rationale
Having an explicit human rights policy is important as a means of ensuring acompany takes a rights-based approach to their business. While a materiality
assessment may be useful as a ﬁrst step in identifying that human rights is indeed amaterial issue for companies, the speciﬁc salient human rights risks can often getoverlooked due the difficulty in engaging the stakeholders most at risk of humanrights violations. While many companies may already be taking action on humanrights in their value chain through nondiscrimination policies, supplier code of
conducts and engagement with communities, a human rights risk assessment uses
international human rights framework and benchmarks, engages with humanrights expertise, and is designed to help assess and govern a business enterprise’s
actual and potential impact on human rights, not the impact of human rights on abusiness enterprise. Results from that assessment should be used to identify
business strategies to mitigate and prevent further harm by implementing actions
and tracking progress.
Recognizing that many aspects of human rights-speciﬁc management are still
aspirational, despite being important, two potential pathways for achieving thisrequirement were identiﬁed: - either having a policy that takes a companywide
approach to uphold and commit to key human rights covenants; or having a policythat speciﬁcally identiﬁes and commits to working on the most salient humanrights risks in particular aspects of a business and value chain as identiﬁed by ahuman rights-speciﬁc risk assessment.
Board of Directors oversight is included for the same reasons as highlighted in the
Tax and Government Affairs requirement, and the same acceptance criteria would
apply.
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Human Rights
PolicyGuidelines for Acceptance: For a company to be meeting this requirement, theymust provide a public, speciﬁc human rights policy that can be either a standalone
document or integrated into another company document such as a Code of Ethics,
as long as human rights are explicitly called out in it and it is meeting the otheraspects of the requirement. The policy should call out respect for human rights that
goes beyond the operations of the company and into the supply chain where themajority of human rights violations traditionally occur. The policy should also
disclose the company's approach to breaches and remediation, involvement withmulti stakeholder groups related to human rights, and its governance andaccountability.
To fulﬁll the requirement based on a commitment to the key human rights
covenants, language in the policy must not only reference the covenants, but
include an explicit commitment to them. Given the complexity of managing humanrights, particularly in the supply chain, these commitments can be aspirational, anddo not necessarily imply that the company and its value chain are completely free ofpotential human rights violations. The key human rights covenants are:●
The Universal Declaration of Human Rights●
The United Nations Guiding Principles on Business and Human Rights●
The ILO Principles
To fulﬁll the requirement through the identiﬁcation of salient human rights risks tothe company, the policy must include details of the human rights risk assessment
conducted, the salient human rights risks identiﬁed through the process, andinformation on how the company is managing the identiﬁed issues and/or
committed to addressing them through action plans with mechanisms to monitor
and track progress.

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5Human Rights
PolicyVeriﬁcation that a company is fulﬁlling this requirement can be provided via PDFs
or online links to the relevant policy documents. Where the company has undergone
review by the Corporate Human Rights Benchmark and received a report, they may
submit their report for review with particular reference to the which of thefollowing requirements they have met:●
A1.1 - Commitment to Respect Human Rights;●
A2.1 - Commitment from the top;●
A2.2 - Board Discussions●
B2.2 - Assessing: Assessment of risks and impacts identiﬁed (salient risks andkey industry risks).
Companies would also be expected to provide high-level details of company
strategy and/or actions that are aligned with their above commitments in order todemonstrate the active implementation of the policy. Companies that are carryingout a Human Rights Risk Assessment in line with OECD Guidelines on Due Diligence
Guidance for Responsible Business Conduct would be meeting the criteria.

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5Human Rights
PolicyActions Not Meeting the Requirements●●●© B Lab 2021

Policies such as Codes of Ethics or Labor Practices that are related to humanrights issues, but do not have an explicit mention or commitment to humanrights or do not address human rights holistically.
A policy that references human rights covenants but includes vague languagethat does not represent a commitment to them, such as ‘informed by’,‘recognises’, ‘based on’ or ‘in line with.’
Adherence to or participation in the OECD Guidelines for Multinationals andthe United Nations Global Compact. Although both provide a framework for
responsible business conduct, adherence or membership does not
automatically require an explicit commitment to speciﬁcally respecting
human rights to the same degree as a commitment to a key human rights
covenant.

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Human Rights
PolicyBest Practices
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© B Lab 2021

Company has a speciﬁc human rights policy that has a clear commitment to
key human rights covenants and has identiﬁed salient human rights risks
through a risk assessment.
Company has conducted human rights due diligence across all operations andsupply chains as per OECD guidelines.
Company has conducted a Human Rights Impact Assessment and released an
impact report with human rights-speciﬁc goals in line with the SDGs andprogress updates.
Company has performed a Gap Analysis on how they are performing against
the United Nation Guiding Principles on Business for Human Rights.

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Human Rights
PolicyRelevant ResourcesCore International Human Rights Covenants
How to Develop a Human Rights Policy
A Guide for Implementing Human Rights into Management Practices
Salient Human Rights Issues - United Nations
Danish Institute for Human Rights HRIA Toolbox for BusinessCorporate Human Rights Benchmark
Business and Human Rights - A ﬁve-step guide for company boards© B Lab 2021

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Human Rights
PolicyCompany Examples
Eni, an Italian multinational oil and gas company with revenue of US$51.8 billion,
recently released their 2020 Human Rights Report, which includes links to several
company documents such as their Statement for the Respect of Human Rights andCode of Ethics. The company endorsed their commitment to key international
Human rights Covenants, such as the International Bill of Human Rights and theInternational Labour Organization’s Declaration on Fundamental Principles andRights at Work, as well as adherence to the UN Guiding Principles for Business andHuman Rights and the OECD Guidelines for Multinational Enterprises. They
describe in detail their approach to Human Rights Due Diligence and theidentiﬁcation of salient human rights issues, as well as actions taken in remediationand mitigation towards those impacted stakeholders. The report also includes
information on their whistleblower policy and grievance mechanisms. Eni’s
Statement on Respect for Human Rights was approved by the Board of Directors in
December 2018. Eni was the highest ranked company on the 2020 Corporate Human
Rights Benchmark, scoring full points in A1.1, A2.1, A2.2 and B2.2.
Unilever disclosed their 2015 Human Rights Policy Statement on their website,stating that their human rights policy commitment is based on the International Billof Human Rights. Board-level oversight is provided by the Corporate Responsibility
Committee. They have also released a 2020 Human Rights Report that presents theirsalient human rights issues which, identiﬁed through a human rights due diligenceprocess; the partnerships they are undertaking to mitigate and take action onhuman rights risks; their approach towards remediation; and their progress to date.
Furthermore, they reference their Responsible Sourcing Policy, which outlines 12
Fundamental Principles, information on mandatory requirements for suppliers,
ways to report on breaches, and their work towards continuous improvement. The
Report is also mapped against the UN Guiding Principles Reporting Framework for
Human Rights. Unilever was the second highest ranked company on the 2020
Corporate Human Rights Benchmark, scoring full points in A1.1, A2.1 , A2.2 and B2.2.

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Process
Overview© B Lab 2021

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Process Overview
All companies that are over US$5billion in revenue are required to join the
B Movement Builder programme as part of their B Corp Certiﬁcation journey.
As part of this programme, companies will undergo a two-step review process todetermine whether they are meeting the Baseline Requirements. As stated above,all companies must be meeting the Baseline Requirements at the group level
before they are able to complete their B Corp Certiﬁcation.
All companies that participate in the B Movement Builder programme are also
required to set aspirational goals and have them approved by the MNC SAC aspart of their company-speciﬁc actions. While these goals are reviewed in a
separate process to the Baseline Requirements, they are held to the sameguidelines for acceptance and any prior decisions on the approval of these goals
will be considered when reviewing the Baseline Requirement for Material Issue
Management.

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Process Overview
Step 1Baseline Requirement Consultation
Companies will undergo the Baseline Requirement Consultation in the Public Phaseof the B Movement Builder programme. During this 6-8 week-long learning
opportunity, the company will exchange and discuss information with B Lab’s
Standards Team in order to better understand the Company’s strategy to meet theBaseline Requirements for B Corp Certiﬁcation. This initial assessment of acompany’s performance increases the chances for the company to meet theBaseline Requirements by the time the company undergoes formal review by the
MNC SAC. Based off this Consultation, the company will receive a Green, Yellow, or
Red Flag rating.
●●●Green: Based on B Lab’s analysis, the company seems to currently meet or
has shared plans to meet all baseline requirements in the future.
Yellow: Based on B Lab’s analysis, current practices and/or plans may or may
not meet all of the baseline requirements.
Red: Based on B Lab’s analysis, the company is not meeting and has notdemonstrated explicit plans to achieve at least one of the baseline
requirements.

If a company receives either a Green or Yellow Flag as a result of the Baseline
Requirements Consultation, they are eligible to proceed with Formal Review by theMultinational Standards Advisory Council (MNC SAC) (see Step 2). If the company
receives a Red Flag, it must implement further steps towards meeting the baseline
requirements and meet either a Yellow or Green Flag before being able to proceedwith a formal MNC SAC review.

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Process Overview
Step 2Multinational Standards Advisory Council Approval
During the Public or Mentor Phase of the B Movement Builder programme, acompany may proceed for formal independent review by the MNC SAC once they
have received either a Yellow or Green Flag as an outcome of the Baseline
Requirement Consultation Process. B Lab Standards team will work with thecompany to create a formal memo that outlines the company actions for eachrequirement and the Company will also be able to submit a Management Letter thatprovides additional context (not included in the formal memo). The documents will
be reviewed at the next available MNC SAC meeting and members will vote as towhether they agree with the ﬂag ratings presented by B Lab Standards team.
Where the MNC SAC determines that the company is meeting all of the Baseline
Requirements, the company is eligible to complete B Corp Certiﬁcation at the grouplevel (as long as they are meeting all of the other performance requirements for B
Corp Certiﬁcation). The company will be required to include incremental disclosureon their B Corp proﬁle which outlines how they are meeting each requirement.
Where the MNC SAC ﬁnds that the company is not meeting all of the Baseline
Requirements, they will provide further guidance and feedback to the company on
improvement actions that will likely enable them to meet Baseline Requirements
for B Corp Certiﬁcation in the future.
All feedback on the Guidelines is welcome and can be sent to B Lab’s Standards
Management team at standardsmanagement@bcorporation.net© B Lab 2021

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Thank you