Acquisitions: what do they mean for B Corps?
Lucy Brown, B Lab UK Recertification Lead, delves into how acquisitions affect B Corps and offers advice on staying purpose-driven through ownership changes
B Corps consistently prove that companies can thrive while embracing social and environmental responsibility. Many fast-growing businesses require access to finance and economies of scale and may therefore be acquired — B Corps are no different, and this eventuality was designed into B Corp Certification from its inception.
Now, as our movement and the businesses within it naturally grow and evolve, we’re seeing more cases of successful B Corps being acquired. So, if you think that could be you, or you’re simply curious to find out what happens when a B Corp is acquired, here’s what you need to know.
Born from acquisition
The idea for B Corp Certification emerged in 2005 after Jay Coen Gilbert and Bart Houlahan, two of B Lab’s founders, sold their successful basketball apparel company, AND1. The company, ahead of its time, was a socially responsible business that gave 5% of its profits to local charities and implemented a supplier code of conduct for the workers in its overseas factories.
However, after being acquired, Jay and Bart saw their work to embed purpose into the heart of AND1 quickly fall away. From this experience, they conceived the idea of an organisation, B Lab, to implement a framework to hold businesses accountable for their impact on society and the environment.
As such, B Corp Certification was explicitly designed to firmly bake ethical principles into a business's DNA throughout its cycle, discourage what is often called ‘purpose-washing’ and incentivise positive impact. There was a recognition that a legal framework and rigorous standards could provide a platform for businesses to remain purpose-driven from their inception and beyond.
Fast-forward almost 20 years, and this has been borne out. Nearly 10,000 global B Corps have set a new standard for ethical business by legally amending their Articles of Association to benefit all stakeholders—not just shareholders. Some B Corps have gone even further, like Tony’s Chocolonely, who have implemented a mission lock to create a ‘golden share’ that enables them to prevent any legal changes to the definition of their mission.
Moreover, several examples of B Corps that have been acquired, scaled their impact and continued to model B Corp principles exist, including Jojo Maman Bébé, which certified in 2016 before British retail multinational Next acquired them in 2022, and Innocent Drinks, which was acquired by Coca-Cola in 2013 before becoming a B Corp in 2018.
The process
What happens when a B Corp gets acquired?
So, if a B Corp gets acquired and wants to maintain its certification independently of the new parent, it needs to let B Lab know within 90 days after the effective date of the change in control and commit to completing recertification within a year.
But if their recertification date is sooner, they can proceed with that time frame instead. I’d also add that the early recertification clause is not triggered if the new parent is already certified, as this company has already met B Lab’s standards.
Companies on B Lab's 'Large Enterprise' approach are given a two-year time frame to account for their complexity and size. Whatever the scenario, I’d always encourage B Corps to revisit the terms of the agreement they sign as part of their certification, as it contains lots of helpful technical information!
And is there one piece of advice you’d give to a B Corp in this scenario?
If a B Corp wants to maintain its certification independently, it needs to demonstrate that it is a complete and distinct business operating somewhat independently from its parent company. To assess the whole company’s scope of operations, the subsidiary should have an independent executive team, legal and reporting accountability, control over its purchasing, and visibility into and influence over its supply chain.
So, my advice would be to ensure you're tracking all of your business operations so you can report on it independently. Being upfront and transparent about how your business has changed since being acquired helps the process — and us to support you on your journey.
The other thing to consider is whether your new parent company is interested in certifying itself. If they are, the potential path forward could be to include them in certification and pursue B Corp status at a higher governance level in the new group structure.
A need to go further
Acquisitions are part of the business lifecycle, and not every acquired B Corp can or will retain its certification. Whatever the outcome, one thing holds true: throughout the lifetime of that business, its time as a B Corp will have contributed to ensuring it is better set up to benefit its wider stakeholders.
But we also recognise that it’s not enough for a few companies to make this choice when the majority do not, and some cannot due to factors out of their control. B Corps are showing the way but remain the exception, not the norm, in an economic system driven by shareholder primacy — a culture of business that prioritises profit over the interests of employees, communities, and the planet. Thus, this model is no longer fit for purpose if we are to raise the floor for better business. It must be replaced with stakeholder governance, which ensures businesses are accountable to (and consider) all their stakeholders.
This challenge cannot be addressed overnight, but it unquestionably presents an exciting, long-term opportunity to redefine the role of multinational corporations and investors, thereby realigning government, finance and business. As B Lab UK board member Anuradha Chugh discussed with Raconteur, business leaders remain keen to emphasise their mission and purpose, while investors are too often laser-focused on the bottom line, creating capital flow challenges for purpose-led businesses who do not fit existing extractive finance norms.
With this reality and its practical limits in mind, our Better Better Act campaign is calling on the UK Government to amend section 172 of Companies Act to ensure every business aligns people and the planet with profit and is legally required to act as a force for good irrespective of its ownership. By ensuring directors consider all their stakeholders, we firmly believe all businesses can become purpose-led, embedding environmental and social considerations into all aspects of their decision-making process.
Acquisitions of successful B Corps thriving in an economic system that promotes shareholder primacy demonstrate the positive progress being made. Through the widespread voluntary adoption of B Corp certification, the alignment of purpose-led business and finance, and the passage of the Better Business Act, we can realise the widespread culture change needed to ensure every acquisition is purpose-led.
