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B Impact Assessment Structure

Investors that request that their portfolio companies complete the B Impact Assessment have the opportunity to compare impact investments across geography, sector, industry and size, utilizing over 70 versions of the B Impact assessment specifically designed to appropriately assess a company's impact positioning while maintaining one overarching impact assessment structure to provide a standardized methodology.

The B Impact Assessment (BIA) is comprised of questions divided into two categories – Operational Impacts and Impact Business Models (IBMs). Operational impacts cover four impact areas: Governance, Workers, Community, and Environment. Impact Business Models ask about impacts affecting nearly 20 different business models, classified into five impact areas: Governance, Workers, Community, Environment and Consumers/Products. Each impact area is comprised of several sub-categories around which groups of questions covering key social and environmental issues are organized. The BIA collects quantitative and qualitative data using IRIS (Impact Reporting and Investment Standards) metrics and glossary terms throughout the assessment.

The specific questions a company would see on the BIA are tailored depending on its geography, sector and size. There are more than 70 tracks of the BIA, depending on the individual entity completing the assessment:

 

Geography Developed Markets USA Emerging Markets

 

Sectors Service Wholesale/Retail Manufacturing Agriculture Addenda (MFI, Equity Investor, Green Builder, etc)

 

Size 0 Employees 1-9 Employees 10-49 Employees 50-249 Employees 250-999 Employees 1,000+ Employees

 

B Impact Assessment Sector Definitions (6)

Sector
Sector Definition
Manufacturing

A company that generates more than 10% of revenues from direct manufacturing activities, defined as "the physical or chemical transformation of materials of components into new products, whether the work is performed by power-driven machines or by hand, in a factory or worker's home, or sold at the wholesale or retail level"

Wholesale/Retail

A company that engages in wholesale or retail sales. Wholesale is defined as "the resale of new and used goods to retailers, industrial, commercial, institutional or professional users, to other wholesalers; or acts as agent in buying merchandise for and selling merchandise to such persons or companies"

Services A company that engages in B2B or B2C service provision, defined as "those services produced for sale on the market at a price intended to cover production costs and to provide a profit for the producer"
Agricultural Growers

Companies that carry out agriculture farming, defined as the growing of perennial and non-perennial crops, including farms, cooperatives. Agroprocessors include companies that source perennial and non-perennial crops for food consumption products and agriculture wholesalers


B Impact Assessment (BIA) Industry Addenda

Industry addenda in the BIA allow for greater adaptability to specific industry issues and impact topics. Addenda industry topics are determined by market demand from investors and companies for intra-industry ratings gradation. They have typically been developed through special expert-led industry "Working Groups," which determine relevant issues, create assessment questions and recommend question weightings to the Standards Advisory Council.

Developed Markets
Emerging Markets
Green Building with specific tracks for:
• Real Estate Development
• Design Professionals
• Contractors & Builders
• Design & Build
 
 
Financial services with specific tracks for:
• Equity Investor in Developed Markets
• Credit Provider
• Investment Advisor
Financial services with specific tracks for:
• Equity Investor in Emerging Markets
• Credit Provider in Developed Markets
• Microfinance Institutions

B Impact Assessment (BIA) Company Size Definitions

The BIA company size determination is based on the number of workers in full-time equivalents (FTEs) to categorize a company as having 0, 1-9, 10-49, 50-249, 250-999. 1,000+ full-time equivalent workers. For example, a company with 25 full-time employees, 50 part-time employees working 20 hours/week and 10 seasonal workers employed for half of the year are classified as having 55 FTEs and take the 50+ assessment track. Size buckets are based on the World Bank's sizing of SME employment.

The B Impact Assessment has a tiered structure:

Assessment Structure 

Section 
Impact Area 
Subcategory
Topic
Rationale
Indicators (key questions in topic)
Operations Workers
Compensation, Benefits and
Training
Compensation & Wages
Fair wages and performance-based
bonuses, along with training for
career advancement, improve the
livelihood of workers 
• all workers are paid a living wage
• % paid above living wage, bonus/wage
increases year over year, etc

See Appendix IV for full listing


B Impact Assessment Geography Definitions

B Lab utilizes a methodology to determine a company's geography as Emerging, Frontier, or Developed Market. This methodology is based upon the Human Development Index (HDI), private capital to GNI availability, and gross national income (GNI) per capita, gender empowerment index and the World Bank's Doing Business Report ranking. See Appendix VII for full list of country classification as Emerging, Frontier or Developed Market. (5)


(3) & (4) 0 worker businesses are those that currently employ two or fewer founders of the company and no external workers.

(5) The Frontier Market designation is used for benchmarking purposes. In terms of content the questions are the same for both emerging marketing and frontier market companies.

(6) Sector definitions taken from International Standard Industrial Classification of All Economic Activities.

NOTE: Companies that engage in activities across multiple sectors are designated as single sector for the purposes of the assessment. For example, a company who generates at least 10% of revenues in manufacturing would complete a manufacturing version of the assessment. A company that provides services and wholesale business activities would complete the version of the assessment that represents the majority of business activities as measured by revenues.

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