FAQ: How the B Impact Assessment and SDG Action Manager Can Help Businesses Plan and Measure Progress
By: B Lab
Tags: Sustainability, Sdgs, Business Strategy, Sustainable Development, B Corp

As beta testing begins on the SDG Action Manager, some B Corps have asked how it differs from the B Impact Assessment. To help interested companies work through this new tool, I’m sharing this FAQ, which outlines where the B Impact Assessment and SDG Action Manager differ or overlap, and how businesses can best employ each tool. Below you’ll find some common questions and their answers from me, as a representative of the Standards Management Team at B Lab.

Let’s start with the basics: What is the B Impact Assessment and how is it designed to be used?

The B Impact Assessment is an impact management tool that helps companies assess their impact on various stakeholders, including their workers, community, customers, and the environment. Companies can use the free standardized tool to compare their performance to other businesses and to identify and track opportunities for improvement. High verified performance on the B Impact Assessment is one of three requirements for a company to be eligible to earn certification as a B Corp.

And what is the SDG Action Manager?

Developed by B Lab and the United Nations Global Compact, the SDG Action Manager is a free web-based impact management solution to enable businesses to take action on the SDGs through 2030. The SDG Action Manager will enable users to complement the BIA’s comprehensive, stakeholder-based view with a more focused look at their performance on individual Sustainable Development Goals.

The SDG Action Manager will allow businesses to:

Find a starting point: Learn which SDGs matter most to your company based on its profile, and how to take action today.

Learn which SDGs matter most to your company based on its profile, and how to take action today. Understand and share impact: Get a clear view of how your company’s operations, supply chain, and business model create positive impact, and identify risk areas for each SDG.

Get a clear view of how your company’s operations, supply chain, and business model create positive impact, and identify risk areas for each SDG. Set goals and track improvement: We have 10 years to achieve the SDGs. Stay motivated and visualize your company’s progress on the dashboard.

We have 10 years to achieve the SDGs. Stay motivated and visualize your company’s progress on the dashboard. Collaborate across your company: Invite colleagues to join the SDG Action Manager, contribute expertise, and see real-time progress and performance.

Invite colleagues to join the SDG Action Manager, contribute expertise, and see real-time progress and performance. Learn at every step: Determine high-impact action based on thought-provoking yet actionable assessment questions, benchmarks, and improvement guides.

Determine high-impact action based on thought-provoking yet actionable assessment questions, benchmarks, and improvement guides. Trailblaze together: Join a global movement of companies working to build a better world for people and our planet by 2030.

So how did the SDG Action Manager come about?

Insights by B Lab and the UN Global Compact showed that awareness of the SDGs was high among companies, but they lacked the tools and direction to get started and take action. And while there are standards and frameworks in the market that help companies report on their SDG contributions and how-to guides for specific practices connected to the SDGs, there is a gap in tools that guide businesses toward internal reflection and specific, meaningful actions. With this need in mind, B Lab and the UN Global Compact joined forces to bring together content expertise and unique approaches to corporate sustainability through the SDG Action Manager.

Do you have to be a B Impact Assessment user to use the SDG Action Manager?

No. The SDG Action Manager will work as a stand-alone solution. Companies can use both at the same time or choose to use one at a given time. If they choose to switch between using the B Impact Assessment and the SDG Action Manager, they will not have to repeat answers for overlapping questions they already answered on either tool.

So how is the B Impact Assessment different from the SDG Action Manager?

The B Impact Assessment takes a comprehensive stakeholder-based view by evaluating a company’s impact on workers, community, environment, and customers, as well as best practices regarding governance. Users are assessed on all five stakeholder groups and cannot pick one over another. That means companies are expected to answer an average of 200 questions, which can vary depending on their size, sector and geography, in all impact areas.

The SDG Action Manager starts with a baseline module that incorporates the B Impact Assessment and the Ten Principles of the UN Global Compact related to human rights, labor, environment, and anti-corruption — essential responsibilities related to people and planet. It then advises companies on which of the SDGs they should start their journey with (the ones they can impact the most), and invites them to explore all others.

Companies can dive deep into each SDG by looking at how it interacts with their business model, internal operations, supply chain, potential for collective action, and risk of negative impact. Companies answer on an average 30 prioritized questions per SDG module, depending on their size, sector, geography and industry. Responses to these questions help the company understand where it stands, how it compares with other companies, and how it can take action. Through this process, the SDG Action Manager enables reflection and drives actions that can be taken to make progress on specific SDGs.

Is there any overlap between the content of the B Impact Assessment and the SDG Action Manager?

The SDG Action Manager incorporates selected questions from the B Impact Assessment and additional questions based off the assessment. The beta version of the SDG Action Manager includes approximately 35% of questions that are directly from the B Impact Assessment, while approximately 20% are based off, but not identical to, questions from the B Impact Assessment. The SDG Action Manager also includes newly developed questions to address the appropriate gaps.

Both tools are available in English, Spanish, Portuguese, French and Italian.

Our company is new to both these tools. Which tool should I use first?

If the company intends to undertake a comprehensive assessment of its business utilizing the lens of impact on various stakeholders, then it should utilize the B Impact Assessment. Further, if the company’s near-term focus is to attain B Corp Certification, it should focus on the BIA first.

If a company’s goal is to understand its performance on the SDGs and what specific and prioritized actions it can take to contribute to the attainment of the goals, it should use the SDG Action Manager.

What are the mandatory aspects for each tool?

If a company wishes to use the B Impact Assessment purely for internal impact management, there are no mandatory requirements. Companies interested in becoming B Corps are expected to complete the B Impact Assessment and achieve a minimum verified total score of 80 across all impact areas, provide responses to the Disclosure Questionnaire, and amend their articles of incorporation to consider the impact of their decisions on all stakeholders.

To use the SDG Action Manager, companies are required to answer the baseline module as a starting point that includes cross-cutting issues that apply to all SDGs prior to diving deep into individual SDGs. Because it is a confidential self-assessment tool, there is no verification associated with it and users are expected to answer honestly in order to derive the maximum benefit.

What does the output score look like for each tool?

Companies receive an overall score on the B Impact Assessment in addition to a score for each impact area: governance, workers, community, environment, and customers.

In the SDG Action Manager, companies will receive a score on the baseline and on specific SDG modules, but there will be no overall score. The intention is to help businesses determine which SDGs should they be working on and to identify actions that they can take while enabling them to benchmark their performance.

How does each tool consider potential negative impacts of businesses?

In the B Impact Assessment, material negative impacts are separately addressed through the Disclosure Questionnaire, background checks, and a public complaint process. These are currently not scored in the B Impact Assessment to avoid situations where negative scores could be offset by other positive practices. Instead, such impacts are evaluated with underlying contextual information by B Lab.

In the SDG Action Manager, negative impact is addressed in the section on Risk of Negative Impact. This section is particularly important in understanding the holistic performance of a company and prioritizing areas of improvement. It is designed to offer a candid reflection of risk for the company’s internal use and does not assume actual negative impact based on the answers. This section is scored through colored flag ratings, both to differentiate the section as an indication of risk rather than actual performance and to avoid the implication that positive and negative performance can be meaningfully aggregated.