BPP bar student Catherine Chow examines the B Corp movement and why an increasing number of companies are adopting this purpose-driven strategy
For decades, corporate law has been accused of being morally neutral at best, and socially harmful at worst. Critics have long argued that it rewards short-term profits, empowers absentee shareholders, and prioritises returns above all else. But in recent years, a quiet evolution has begun, one that challenges the idea that profit and purpose must be at odds. At the centre of this shift is the rise of B Corps and the growing movement of companies voluntarily reimagining their legal duties to serve more than just shareholders.
What is a B Corp?
A B Corporation or B Corp is a business certified by B Lab as meeting rigorous standards of social and environmental performance, accountability, and transparency. Unlike traditional Corporate Social Responsibility (CSR) initiatives, B Corp certification is not just a branding exercise. To qualify, a company must legally embed stakeholder governance into its corporate structure, typically by amending its articles of association.
These amendments commit the company to balance the interests of shareholders with those of wider stakeholders: workers, customers, communities, and the environment. It’s a legal shift, not just a moral one.
Section 172 and the purpose debate
The UK already has a statutory nod to stakeholder interests through Section 172 of the Companies Act 2006, which requires directors to promote the success of the company while having “regard” to factors such as the environment, employees, and the long-term. But this obligation is couched in broad, often unenforceable language, with shareholder value still firmly at the centre. Critics have argued that this so-called “enlightened shareholder value” approach leaves too much discretion to directors and insufficient accountability to wider society.
Rewriting the corporate constitution
To become a B Corp in the UK, companies must amend their articles of association to explicitly commit to stakeholder governance. This typically involves inserting clauses that:
- Require directors to consider the impact of their decisions on non-shareholder groups; and
- Allow directors to balance competing interests without prioritising financial return above all else.
You can read B Lab’s UK legal requirement guide for further information.
Want to write for the Legal Cheek Journal?
Find out moreIn legal terms, this doesn’t displace directors’ fiduciary duties but it does reframe them. The focus shifts from maximising shareholder wealth to creating shared value for all stakeholders. Due to this change being locked into the corporate constitution, it becomes enforceable by shareholders and binding on future boards.
B Corps in the UK: More than a badge
The number of certified B Corps in the UK has grown rapidly, with over 3,000 companies across sectors as of mid-2025. Some well-known names include:
- The Body Shop: a pioneer of ethical retail
- innocent Drinks: known for its sustainability focus
- Tony’s Chocolonely: a vocal advocate for fair trade and slavery-free supply chains
- Bates Wells: the first UK law firm to be a B Corp
These companies aren’t just posturing. Many report that B Corp certification has helped them attract values-aligned investors, retain talent, and build trust with consumers. In fact, data based on findings by B Lab UK shows that UK small and medium-sized B Corps achieved a 23.2 % rise in turnover, compared to 16.8 % for peers, and increased staff by 9.6 %, while non-B Corps cut jobs by 0.5 %.
Why do it voluntarily?
If there’s no legal obligation to become a B Corp, why are so many companies choosing to do it?
- Brand Value: Consumers especially Gen Z are more likely to support companies that align with their values.
- Employee Engagement: Younger workers increasingly want employers that “walk the talk” on ethics and sustainability.
- Investor Pressure: ESG-focused funds now dominate portfolios, and institutional investors are scrutinising governance like never before.
- Long-Term Thinking: Studies suggest that purpose-led companies are more resilient and more trusted in times of crisis, a lesson many learned during the pandemic
But perhaps most importantly, B Corps are proving that corporate law can support and not hinder ethical business models. This runs counter to the idea that regulation always needs to play catch-up. In this case, it is businesses leading the charge.
Criticisms and challenges
Some argue that B Corp certification amounts to “purpose-washing” — a sophisticated PR strategy with limited real accountability. A prominent example is Dr. Bronner’s, a high-scoring B Corp, which announced it would exit the programme in early 2025, accusing B Lab of weak standards that allow greenwashing and purpose-washing, especially when some large multinationals use their logos without proper supply chain scrutiny. Others question whether the certification process is rigorous enough, pointing out that the standards can be vague and that companies may pass based on relatively minor initiatives, like improved recycling or office culture, rather than deeper supply chain reform (CHOICE). Finally, the cost of certification including fees, legal adjustments, and ongoing compliance may deter smaller businesses from joining the movement, as highlighted by Except Integrated Sustainability, which noted that resource constraints can be a major barrier for start-ups (Except).
A quiet revolution in corporate law
We often think of corporate law as a blunt instrument shaped only by legislation, courts, or crises. But what the B Corp movement shows is that corporate law is more flexible, dynamic, and responsive than it first appears. Within its existing framework lies the capacity for companies to redefine success, reorient duties, and rethink accountability.
This is particularly significant in the UK, where legislative reform of corporate purpose has stalled, and yet the demand for ethical business continues to rise. B Corps offer a bottom-up solution: a way for companies to adopt a new legal ethos without waiting for Parliament to move.
A model worth watching
B Corps are not without limitations. Questions remain about the rigour of certification, the consistency of standards, and the accessibility of the model for smaller enterprises. However, they do represent a notable legal development. One that illustrates how the corporate form can be adapted to reflect evolving expectations around business and social responsibility.
In a time when public trust in business is under pressure and ESG commitments are increasingly scrutinised, the B Corp framework offers one possible pathway for companies seeking to align profit with broader purpose. While it may not be a perfect solution, it opens a conversation about the role corporate law can play in shaping the values and priorities of modern business.
For law students, junior lawyers, and future business leaders, the B Corp movement is a development worth observing. Not as a definitive answer, but as part of an ongoing evolution in how we think about corporate governance.
Catherine Chow is a bar student at BPP University in London with a strong interest in corporate and commercial law. She is particularly curious about how legal structures can adapt to meet changing societal expectations, and how companies can align governance with purpose, transparency, and long-term value.
The Legal Cheek Journal is sponsored by LPC Law.
