Written by Louis-Tchine Pickering, Director of Research
The founders of Glen Lyon Coffee Roasters displayed a dismayed reaction when discovering that Nestle's subsidiary, Nespresso, received the same B Corp certification on ESG commitments. Critics such as Glen Lyon point to allegations that some of its farmers are earning poverty incomes and creating capsules that generate a high amount of waste, questioning the certification as companies are usually expected to demonstrate and achieve some environmental and social goals. They are worried the reputation of the certification scheme would be tarnished if other large corporations are awarded it without the relevant goals met. Some have mentioned that multinationals are working to be “less bad” than to transform and become “good”.
Although the B Corp has a strong qualifying process with scoring companies on various metrics, there are still limits to the certification, with only current employees receiving a fair wage while others further down in the supply chain do not.
I believe that the idea of their certification process is still beneficial as it provides customers with relevant information on which companies are more sustainable and should be considered in their purchasing decisions. However, this metric does need to be more holistic, considering all aspects of the company. The main issue is that not every metric is perfect, as there may be an important detail left out, or that for multinational companies, an increase in one factor can inflate their ESG score. In the end, it is still important to not just rely on a metric but instead consider all other factors, including their financial statements and the general vision they set for themselves going forward.
Number of adopters in B Corp has increased drastically (Adapted from FT.com)