Lab United Kingdom B Lab (UK) Ilncorporated company limited by guarantee) Report of the Trustees and Financial Statements For the year ended 31 December 2021 Registered Charity No .' 1164694 Registered Company No . 09388752 IEngland and Wales) B Lab (UK) Report of the Trustees for the year ended 31 December 2021 Contents Report of the Trustees Reference and Administration Tru5tee5, Company Secretary, and Executive Team Charity and Company information and Professional Advisers Structure, Governance and Management Objectiv@s and public benefit Corporate Governance and Decision Making Risk Management and Internal Control Review of Activities and Achievements Activities Rationale Achievements and performance Measurement of success in 2021 Financial Review Reserves Policy Fundraising Looklng Forward ststement of Trustees. Responslbllltles li Independent Auditorfs Report to the Trustees of 8 Lab IUKI 13 Statement of Financial Artivities 16 Balance Sheet 17 ststement of Cash Flows 18 Notes to the FlnancSal Statements 19 B Lab (UK) Report of the Trustees for the year ended 31 December 2021 Reterence and Administration The Trustees have pleasure in presenting their report and the audited financial staternents of B Lab IUKI for the year ended 31 December 2021. The accounts have been prepared in accordance with the Companies Att 2011, the accounting policies as disclosed in the notes and the charity's governing document. The Trustees have adopted the provision5 Of the Statement of Recommended Practice-Accounting and Reporting by Charitie5" 1"FRS 102 SORP" Isecond editionll in preparing the annual report and financial statements of 8 Lab IUKI. The Dirertors of the charit3ble company 3re its Trustees for the purposes of charity law and constitute the'B03rd' The Tru5tee5' Report also represent5 the directors, report required by Company Law. The Tru5tee5 who have Served during the year and since the year end were as follows. Trustees Mary John5tone-Louis- Chair Arny Clarke Mark Cuddigan Louise Harman jason Stockwood Charmian Love James Perry (Observerl Yeliz Mert (Observer) Resigned 18 Nov 2021 Resigned 11 Feb 2021 Company Secretary Barbara Eze Eilish Kavanagh Resigned 8 September 2021 Appointed 8 September 2021 Executive stsff Chris Turner James Ghaffari Eilish Kavanagh Kate Sandle Executive Director Director of Certification Director of Finance & Operations Ifiom 14 July 20211 Diredor of Programmes & Engagement (to 31 December 20211 Charity and Company Information Its primary charity and company information is as follows. Printipzl addres5 and registered Office 20-30 Whitechapel Road London El IEW Bankers to 12 january 2022.. HSBC 39 High Street, Ashford Kent TN24 8TG to 12 January 2022 From 12 January 2022.. Coutts & Co 440 Strand London WC2R OQS Solicitors Bates We115 10 Queen Street Place London EC4R IBE Auditors WMT Chartered Accountants Verulam Point, Station Way St Albans, HertfordshSre ALI SHE Website.. www.bcorporation.uk Registered Company No.. 09388752 (England and Wales) ReElStered Charity No.. 1164694 B Lab (UK) Report of the Trustees for the year ended 31 December 2021 Structure Governance and Mana ement Objective5 and public benefit A5 set out in the Article5 of Association. B Lab IUKI exists to further the following objects for the public benefit.. To advance the education of the public in subjects relating to sustainable development and sustsinable business and to promote stLJdy and research in such subjects provided that the useful results of such study are disseminated to the public at large. To promote 5UStainable developtllent for the benefit of the public by.. the preservation, conservation and the protection of the environment and the prudent use of resources., and the promotion of 5UStainable means of achieving economic growth and regeneration. "Sustainable development" means development which meets the needs of the present without compromising the ability of future generations to meet their own needs. To promote compliance with the law and ethical 5t3ndards of conduct, including without limitation by encouraging the adoption and application of high Standards of business ethic5 and governance and thereby maximising the material positive impact of business activities on people and the environment affected by such activities,. and minirnising the negative effects of business activities on people and the environment affected by such attivities. Corporate Governance and declslon maklng B Lab IUKI was incorporated as a company limited by guarantee in England & Wales on 14 january 2015 and registered a5 a charity with the Charity Comrni55ion for England and Wale5 on 3 December 2015. The licensing arrangernents with 8 Lab Global, the organisation supporting the global development of the 8 Corp Movement, st3te that royalty fees of IO% of all non-phi12nthropic income generated by B Lab IUKI is paid to B Lab Inc to 5UPPOrt back-office development of the global movement. This agreernent 15 under review. Since July 2021 service fees of 5% of all unrestricted non-philanthropic income generated by B Lab IUKI is paid to B Lab Inc with cost-based fees charged per company Submitted for certification and other assessments to ensure rigorous application of standards. The Trustees are appointed through recommendation or open recruitment, based on knowledge of and commitrnent to the aims of the charity. Decision5 are taken in the following way.. The Board of Trustees approves strategy I policy and annual budget and delegates operational authority to staff. The Executive Team led by the Executive Director, decides on day-to-day rnanagement of the charity and its activities, its outreach, its programme development, and prepares all papers 2nd strategy documents for Board approval. The Board decldes on the level of pay for the Executlve Dlrector. Decisions on the pay of other staff are based on al an ability to pay and bl an ability to attract and retain skilled staff. There is no payment made to Trustees for their work. The Trustees are aware of the principles and recommended practice for good governance set out in the Charity Governance Code for charities which was revised and issued in December 2020. The trustees have regard to the Charity Commission's guidance on public benefit. The Trustee5 reviewed and established key policies in 2021 including the following. the charitls reserves policy considering the rate of growth in the charity's activities,. the establishment of a deferred income accounting policy in 2019, and the ch3nge in its pricing structure introduced in July 2021. an Investment Policy and Treasury Policy, due to an increase over the last two years in free cash reserve5 calculated after excluding deferred income accrual which is non- refundable. B Lab (UK) Report of the Trustees for the year ended 31 December 2021 Risk Management and Internal Control The Trustees have considered the major risk5 to which the charity is exposed and have satisfied themselves that Sy5tem5 and procedures have been e5tabli5hed to manège these risks. The major risks tnay be summarised as follows along with the likelihood of them occurring and the steps taken to mitigate against each risk. Finantial Risk Likelihood Mitigation Business development strategy is to back many companies simultaneouslv Actively encourage new cornpanie5 to use the BIA H3ve built cap3Clty in te3m to reduce time taken to certify with increased demand Number of companie5 certifying as B Corps do not reflect budgeted income Medium Existing B Corps are not able to pay their 8nnu31 fees Aged debtor tracking process Keep closely informed about companies Standardise process and systematise our work to reduce cost5 on time and Medium Costs of delivery of B Corp programme rise Medium re50urce5. Non-financlal r55k$ LIkell1￿0d Mltl8ation Expanded team in 2021 and planned in 2022. Tracking capacity and taking remedial action in advance. Building infrastructure with growth Forecasted incorne frorn these companies is realistic Developing a range of support 2nd product offerings for larger companie5 oin throu h the process Due Diligence proce55e5 in place,. recertification required every 3 years. Keeping close contact with our comrnunily to know our B Corps and address challenges. Early response to potential issues flagged with Standards Team. Good communications around the B Corp movement globally Verification checks and on site reviews carried out mitlEate this risk. Insufficient staff resource to meet demand Medium L3rger comp3nie5 Struggle to become B Corp5 owing to complexity I perceived risk of the process Medium- High Reputation damage e.g. through poor performing B Corp, or controversial activitie5 Medium B Lab (UK) Report of the Trustees for the year ended 31 December 2021 Review otA¢tivities and Achievements Artivitie5 All the activities of B Lab IUKI support the above charitable objectives. From time to time the Tru5tee5 of 8 Lab IUKI have forrnally reviewed the activitie5 of B Lab IUKI and are of the view that any private benefit arising from the certification scheme could be considered as a me3ns of furthering the objects and that any private benefit 15 nece55ary and incidental. The Tru5tee5 of 8 LablUKI will continue to keep this under ieview. We achieve our purpose to advance the education of the publSc In subjects relating to sustainable developrnent and sustainable business by the following activities. Hosting, contributing to and running educational workshops, round tables, seminars about B Corp methodology, the role of corporate governance and sustainable business. Through these, 8 Lab IUKI builds awareness and understanding of how businesses can solve environmental and social problems, creating opportunities for best practice creation and sharing. We produce accessible materials. such as best practice guides. relating to social and environmental problems that businesses tackle and how to participate in building a more sustainable and fairer economy. We also use our own d3ta and evidence to show the extent to which B Corps 3re performing across key metrics in comp3rison to other benchmarks which are used in pre55 relea5e5 and rnediz articles. Hosting regional and virtual activitie5 to ensure our vision and comrnunity grows across the UK. To this end, we developed the B Leaders training prograrnme, open to all interested parties, creating an "arrny of champion5' who are trained to help leaders of businesses build their environmental and social impact into their core business p13nning, strategy and measurement. Our B Leaders become advocate5 them5elve5 by h05ting workshop5 and seminars in their own location5, educating bu5ine55 leader5 and employee5 in how itnpact management across all activities fits with the Sustainable Development Goals and other global initiatives. Creating opportunities to enter into debate about the future of business in a world with critical resource issues and growing inequality. We have a very positive message to bring to the discussion about how businesses can be a p051tive contributor to society and our methodology provide5 colour and depth to the lirnitation5 of the indicator that is GDP,. both companies and society increasingly are focusing on this broader measure of business activity. At B Lab, we 8re working with an ever-wider range of businesses and networks to share messages with the general public on bu51ne55es' role in creating a future within our means and that 15 focused on fairne55 and respect for people and the planet. Identifying and then working with others to deliver our vision and practical approach to our target audience. These include entrepreneurs, financiers and investors linstitutional, angel, others), academics, students, public bodie5, umbrella organisations, think and do tank5, research bodies, civil society organisations and social enterprise networks and the general public through our communications and awareness raising activities. Contributing to and disseminating the growing body of academic, technical. and practical knowledge and research in the field of social and environmental measurement and reporting. Engaging in the research and opportunitie5 that are currently ongoing or arising, to ensure that we can contribute to informed thinking around thi5. B Lab IUKI has developed Strong relationships with most of the top universilie5 le5peciallv rnanagernent and business schools) and regularly presents on the 8 Corp rnodel and its vision for an inclusive form of capitalism. These partnerships with Universities and Busine55 Schoo15 in England and Wale5 enable us to share and develop this knowledge and research. B Lab IUKI continues to explore partnership opportunities tsn 8 Corps, role as contributors to the United Nations, Sustainable Development Goals ISDGsl and on the opportunitie5 and challenges faced by glowing bu5ine5ses a5 they balance their financial and 5UStainable goals. Providing a regular set of opportunities for the leader5 of 8 Corp5 to inspire and advocate their eth05 a5 a business to their custorners, suppliers, communities, and the wid&r PLJblic. Th&ir message explains from 3 first- hand perspective, the positive effect on people, communities, and environment that they can touch through their operation5. Developing a campaign and establishing a dedicated website, the Better Business Act launched in March 2021 to irnplement change5 to the Cornpanies Act Isection 1721 which seeks to embed the corntnitrnent to running all B Lab (UK) Report of the Trustees for the year ended 31 December 2021 businesses for the benefit of all, not just for shareholders. This activity is undertaken in the context of supporting the delivery of B Lab IUKI'S charitable purposes of advancing the education of the public In sustainable development and sustainable business by educating the public and policy makers about how purpose can be embedded in governance. The carnp8ign is also focused on educating policy makers about how B Corps can be used as a model for change in governance policy. The trustees have considered Charitv Commission guidance CC9 and consider the campaign to be an effective way of furthering or supporting B Lab IUKI'5 purp05e of advancing education. Educate the public at large on the ability of businesses to pursue social and environmental oriented goals bv sharing best practice and practical experience of trying to be better stewards of resources. To support this work, we also en8age in operational activities to support any or8anisation interested in -measurin8 What Matter5" Wlth a comprehensive set of too15, mastercla55e5, peer Support. and best practice exchange- all with the ai of spreading the word widely and embedding more deeply into organisations a sustainable approach to business. We achieve our purpose to promote sustainable development for the benefit of the public by undertaking the following. Campaigning to implement changes to the Companies Act (section 1721 which would @mbed the commitment to running businesses for the benefit of all, not just for shareholders. This activity is undertaken in the context of supporting the delivery of B Lab IUKI'S charitable purposes of promoting sustainable development because in order to create more 5UStainable cornpanies, those companie5 need to minimi5e negative exterrialitie5. The proposed amendment to the Companies Act which makes it mandatory for all businesses to be triple bottom line is one of the most important means for the economy to become more sustainable. Having considered the Charity Commission guidance CC9. the trustees consider the campaign to be an effective way of furthering or 5UPPOrting B Lab IUKI'S purposes of promoting sustainable developrnent. Identifying those businesses that are 'best in class" in creating positive social and environmental impact. This ha5 at least two effects.. al the certification a5 a B Corp enable5 the public to rnake inlorrned choice5 on which businesses to support las a customer, employee, supplier, for ex3mplel and bl it helps raise th@ stand3rds for other businesses who see the competitive advantage and social benefit created through committing to run a business for broader stakeholder benefit. Encourage wide use of the freely available B Impact Assessment tool IBIAI as a road map for creating positive impact within their organisations. Recording performance over time form5 the basi5 of our evidence of impact both on the company and on individuals, lives, communities and the environment over time,. the standards used within the B Impact Assessment for measuring and promoting various social impacts are directed towards our charitable purposes set out above. Supporting all companies, charities and umbrella organisations, (not just those that will proceed towards certification), to-measure What Matters" and in so doing, to begin the journey towards maximising their rnaterial posltive impact on the general public and the planet. Expanding our case studie5 and examples of best practice from our community of UK B Corps a5 8 beacon and inspiration for others to follow suit. Providing a range of opportunities for the general public including individuals, businesses, students, and CU5tomer5 to meet the B Corp5 and hear the principle5 of their business values. All our artivities support our third object, namely, to promote compliance with the law and ethical standards of conduct by maximising the material positive impact of bu5ine55 activities on people and the planet and minirni51ng their negative activity. In particu13r, our campaign to implement ch3nges to the Companies Act (section 1721 which would embed th& commitment to running all businesses for the benefit of all, notjust for shareholders. This activity is undertaken in the context of supporting the delivery of B Lab IUKI'5 charitable purposes of promoting compliance with the law and ethical 5t3ndard5 of conduct by creating the governance to enable our 5y5tem to go beyond the rninimum requirement5 and to form the most ethical governance for companies to operate and comply with the law. B Lab (UK) Report of the Trustees for the year ended 31 December 2021 Rationale We aim to redefirie success in busine55 and to promote sustainable development widely acro55 UK institution5 and organisations. We seek to create a change in the way business operates for a greater good for all, rather than just the interests of shareholders, and in $0 doing, bring positive impact to cit12ens, to communities and to the environment. This urgent need 15 clearly recognised now atllong5t a wider range of stakeholders but there are sy5tem5 in place that make change hard. Our work offers an alternative way of doing business, by providing a clear road map for change (using the Impact Assessment tool) so that trust in business can be rebuilt over time. We recognise that whilst ther& will always be leaders who will forge ahead with new approaches, it will take con51deiably longer for the 5y5temic barriers to be lifted to achieve our end g021- namely, for the broader stakeholder 2pproach to business eventually to become the "de facto" way of doing business. Our end goal is to maximise the material p051tive impact of business activities on the general public and the environment and minimise the negative effects. One significant route for promoting sustainable development for the benefit of the public is through the ever-growing number of entrepreneur5 and established bu5ine5ses who certify their busine55e5 35 B Corps because they run their businesses according to the highest ethical 5tandard5 of conduct. These businesses exernplify the material p051tive impact of B Corps, and helps consumers, clients, and potential employees distinguish good practice from good marketin8 within a cornpany. By maximising the material posltive irnpact of business activities on people and the environment, this creates a momentum for lasting change in the way capitalism distributes its proceeds for the benefit of all. Achlevements and performance By the end of 2021, the UK B Corp community had grown to 577 8 Corps land counting), representinE 52 industries with cornbined revenue of £8.9 billion and over 38.(X)O ernployees. Additionally. we have built an extensive pipeline of interested companies lover 21,000 companies) who are using the BIA and progressing towards certification- and are ther&fore"Me3suring Wh3t Matters" Whilst we realis& that many of these companie5 in the pipeline will need considerable time and support to progre55 towards certification, their progress Is an important indicator of success of our work, and we include this as one of our Key Performance Indicators Isee belowl. We have been grateful to have received a wide range of support, promotion, media coverage, personal recomrnendation5, endorsements by companie5, enquirie5 and feedback from academics. busines5e5, lawyers, and policv makers on our work. Highlights of 2021= al This year's B Corp Month, held in March 2021, was a resounding success with over 70% of the UK B Corp community participating. We offered multiple engagement opportunities and themed e3ch week with the B Impact Assessment. bl There are now over 700 businesses in the Better Business Act coalition, a growing number of pledges and continued campaigning on our soci81 media channels 8nd in 3 bi-monthly newsletter. The Better Business Act advocate5 for the UK government to implement changes to the Companie5 Act15eciion 1721 which would embed the commitment to running all businesses for the benefit of all, not just for shareholders. cl Over 5,000 attendees registered for the B Corp Global Climate Summit. The Net Zero event that we held in partnership with 8 Lab Europe was the second most popular event (captured by post-event feedback from attendees). We received great feedback from attendees on our sessions. dl We are working to increase the representation of female and People of Colour-owned businesses, through identifying and exploring relationships with membership organisation5, and providing an equity discount to the first certification fee to eligible busines5e5. We 5UPPOrted a seiie5 of awarene5s-rai5ing events and workshop5 with the Allbright women's network and have also been engaging with Poc-businesses accelerators such as Foundervine. Hatch Enterprise and the Kings Cross Impact Hub. el Throughout May, June and July, we shared Stories about how B Corps are addressing social justice issues and finding new and innovative ways to create an equitable society for all. Topics included climate justice, anti- racism and allyship, and Pride. Anticipating there would be a heavier focus on climate-related topics in the lead up to COP26, it was irnportant to feature Stories about the progress 8 Corp5 are making in these area5. B Lab (UK) Report of the Trustees for the year ended 31 December 2021 fl Launched a communications campaign to engaB& businesses beyond the B Corp community by capturing excitement surrounding the COP26 climate conference, which we attended, hosting three successful events. gl In Septernber we launched Boardroom 2030, inviting and equipping businesses to explore what a 2030 future Might look like and drawing attention to the changes we must make to our boards today. Our Activation Kits supported businesses to consider what would be on the Board agenda, who would be represented at the table, and how decisions would be rnade in 2030. In the first month 1,085 activation kit5 were downloaded. h) We ran 3 B Leaders programmes to empower more people across the country to advise bLJsinesses on positive irmpact and to act a5 amba55adors of our charitable mission. The programme shifted online to enable greater scale and diversity within cohorts. These training programmes were highly in demand, sold out within minutes, and so in 2022 we will re-evaluate the role of training in growing the B Corp community. il Funded by a grant from the Bill Gates Foundation, we built momentum around the B Corp agenda and its tools, B Impact Assessrnent IBIAI with that of the United Nation5, Sust8inable Development G081s ISDGS) by promoting the 5DG Action Manager, in particular participating in global campaigns linked to the UN General Assembly week in Septèmber. Il We launched tsur new 8 Lab UK website to communicate with a range of audienees more effectively about our mission, the benefits of B Corp certification, our18test publications, re50urce5 3nd case studies. Measurements of success in 2021 The following key performance indicator5 are used to a5515t U5 to monitor our progre55 toward5 achieving our objectives. Key Performance Indicator By end of 2018 y end of 2019 By end of 2020 8y end of 2021 Nurnber of B Corps certified in the UK 178 272 360 577 Average number of new account5 created each week Between 30-40 Between 50-60 Approx. 95 Approx. 16D Number of organisations interested in measuring their impact on people and the planet through the B Impact Asse55ment tool lin our-pipeline") 3.325 6,961 12,698 21,269 8 B Socia15, 4 CEO event5, 3 Learn to Bs, I retreat, l Leader5 course andlBD Bootcamp 21 events Ivirtual and f2fl, Events, discussions, socials that we hold across the UK 10. including the B Inspired event with over 600 attendees 23 (many virtual due to COVIDI Climate Sumrnit5, 3 8 Leader courses, and at COP26 Website hits.. 34,617 56,572 134, 252 181,366* *ln December 2021 the global site architecture for B Lab Global / B L3b UK was updated, moving the B Corp directory to a centrali5ed global location. As a result we anticipate around 30% drop in web traffic tD B Lab UK in 2022. B Lab (UK) Report of the Trustees for the year ended 31 December 2021 Financial review For the year ended 31 December 20218 Lab IUKI had a deficit of £140,39212020.' surplus of £198,752). Funds of the charity at 31 December 2021 were E312,01412020.. £452,406), £293,91412020.. £361,052) of which were unrestricred and £18,10012020.. £91,354) restricted. Grant5. donation5 and gift5 in kind were 2% of total revenue of £1,624,58412020.. 24% of £1,210.3401. Income earned from charitable activities has increased by 73% to £1,591,154 from £919,14212020.. 24%). All expenditure is related to charitable activities. A5 3 licensee of B L3b Inc IUSI, the non-profit making organi5ation 5UPPOrting the global development of the B Corp movement, royalty fees were paid at LO% of all unrestricted income generated by 8 Lab IUKI until July 2021. From July a service fee was paid at 5% of all unrestricted income plus cost based fees per company submitted for certification and other a5ses5rnent5 to ensure rigorou5 application of standards. B Lab UK en5ure5 that it allow5 for exchange rate fluctuation in it5 budget. Reserves pollc¥ During the year the Trustees r&vi&wed the Reserves Policy taking account of the major risks, the rapid growth in demand frorm UK organisatlons seeking to become B Certified, the change in pricing structure from July 20213nd the incorme receipts which have been deferred under accounting rules. B Lab UK takes a risk-ba5ed appr08ch to reserves so that the Trustee5 intend to hold a level of reserves, when including the income deferred to the following year, Sufficient to meet the estimated financial impact of the m05t significant risks and provide reasonable flexibility to enable 8 Lab UK to operate smoothly in the case of unforeseen circumstances. Based on the current significant risks. the Board aim5 to maintain unrestricted, free reserve5 of between £500,000 and £700,(M)O which represents an equivalent of between 3.6 and 5.1 months of operational costs in 2021. This level of free reserves, wh&n added to the income receipt5 deferred to 2022 of £995,845, represents a target of 10 rnonth5 of unrestricted expenditure. The unrestricted free reserves balance on 31 December 2021 of £284,971, plus the income receipts deferred to 2022 of £995,845 amount to £1,280,816 which represents 9.3 months of unrestricted expenditure, and the Trustees consider thi5 sufficient to provide the organi5ation with reasonable fin3ncial flexibility and stability and contribute to longer-term sustainability. The 803rd reviews the level of re5erve5 annually. considering the rmajor ri5k5 and the level of expenditure, and may decide to adjust the level with the growth expected to ensure that the unrestricted free reserves kept are not insufficient nor excessive. Fundralsln8 All fundraising activity is undertaken internally and is aimed 8t funding specific projects. No complaints about fundraising have been received. Lookln8 Forward.. Plans for Future Period The Trustees approved a new Business Plan for 2022, aligned with B Lab's global mission of an inclusive, equitable and regenerative economy for all people and our Shared planet. We have 3 overarching goal5'. Build a people-powered movement through creating models of a new economic system Create the world we need by cultivating and harnessing a community of leader5 Change the rules- driving change towards the new system at scale In 2022, in delivering our ambitlOU5 goals and in mitigation of the risks listed above, we intend to=_ al Continue to support all UK 8 Corps as they go through their recertification process (every 3 years) to ensure these businesses remain committed to running the company for the broader benefit of all not just for shareholder5 and that the concept of continuou5 improvement is deeply ernbedded throughout the companie5. bl Grow representation of key sectors and regions and improve the diversity of ownership in the B Corp community by identifying and addressing key barriers to engagement B Lab (UK) Report of the Trustees for the year ended 31 December 2021 cl Incre3se the number of large businesses engaging with the B Corp movement through dedicated account management dl Capture the impact that 8 Corp certification has had on the business and on society and environment more gener8lly,' build compelling case studies for wider use on the benefit5 of B Corp certification, and support B Corps to set ambitious goals across impatt areas, by providing them with inspiration, tools and resources to increase their scores over time. el Continue to advocate for the UK governrnent to irnplement change5 to the Cornpanies Act Isection 1721 which would embed the commitment to running all businesses for the benefit of all, notjust for shareholders. fl Develop th& B Leaders community to empower more people across the country to advise businesses on positive irnpact and to act a5 amba55adors of our charitable mi5510n gl Communicate the leadership of the B Corp community in tackling pressing challenges such as climate change, by highlighting the urgency required and amplifying best practice in B Lab publications h) Continue to build momentum and product offering5 around the B Corp agenda and its tools, B Impact Assessment IBIAI with that of the United Nations. Sustainable Development Goals ISDGS) as well as new product offerings il Increase awareness and drive positive perception, through relevant, timely and credible content, of B Lab, B Corp businesses and the wider B Corp Movement jl Drive engagement with the B Corp Movement to demonstrate impact and to inspire change- both through modelling B Corp best practice. and through sharing opinion and knowledge kl Build deeper partnerships with other organisations who have 8 similar end goal or whose work complements OUf5 and vice versa 11 Continue to build our internal capacity and resources to meet the demand of companies All of these activities and plans are consistent and reinforce our charitable objects for the public benefit. ststement of Trustee5 Responsibilities The trustee5 Iwho are also the director5 forthe purpose of company lawl are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. Company law requires the trustees to prepare financial statements for each financial year. Under that law the trustees rnust prepare the financial 5taternents in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable lawl. Under company law the trustees rnust not approve the financial Statements unles5 they are Satisfied that they give a true and fair view of the State of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure. of the charitable company for that period. In preparing these financial statements, the trustees are required to.. al 5elert Suitable accounting policies and then apply them con51Stently. bl observe the methods and principles in the Charitie5 SORP,. cl make judgments and accounting estimates that are reasonable and prudent., dl state whether applicabl& UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the fir13ncial statements.. and el prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue to operate. The trustee5 are re5pon5ible for keeping adequate accounting record5 that are sufficient to Show and explain the charitable company'5 transactions and disc105e with reasonable accuracy at any titne the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2(M)6. They are a150 re5pon5ible for safeguarding the a55ets of the company and hence for taking re350nable 5tep5 for the prevention and detection of fraud and other irregularities. The trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company's website. Legislation in the United Kingdom governing the prep3ration and dissemination of financial statements may differ from legislation in other jurisdictions. B Lab (UK) Report of the Trustees for the year ended 31 December 2021 The trustees confirm that so far as they are aware, there is no relevant audit information las defined by section 418131 of the Companies Act 20061 of which the charitable cornpany's auditor5 are unaware. They have taken 311 the Steps that they ought to have taken as trustees in order to make themselves aware of any relevant audit information and to establish that the charitable company's auditors are aware of that information. This report has been prepared in accordance with the special provision5 relating to small companies within part 15 of the Cornpanies Act 2006. This report was approved by the board of directors on.. 7 July 2022 D3te Director B Lab (UK) INDEPENDENT AUDThOR'S REPORT TO THE MEMBERS OF B LAB (UK) Oplnlon We have audited the financial statements of B Lab IUKI (the 'charitable company'l for the year ended 31 December 2021 which Comprise the Statement of Financial Activities, Balance sheet, Statement of Cash Flows and Note5 to the Accounts including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparatlon 15 applicable law and United Kingdorn Accounting Standard5, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Pr3Cticel. In our opinion, the financial statements.. give a true and fair view of the state of the charitable eompany's affalrs as at 31 December 2021 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended,. have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice., and hève been prepared in accordance with the requlrements of the Companles Acr 2006. Basis for opinion We conducted our audit in accordance with International Standards on Auditing IUKI IISAS IUKII and applicable law. Our responsibilities under those st3nd3rds are further described in the Auditor'5 responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC'S Ethical Standard, and we have fulfilled OLJr other ethical responsibilities in accordance with these requirement5. We believe that the audit evidence we have obtained 15 sufficient and appropriate to provide a ba515 for our opinion. Concluslons relatlng to golng concern In auditing the financial stat&ments, we h3ve concluded that the trustees, use of the going concern basis of accounting in the preparation ol the financial 5tatementS 15 appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the entity's ability to continue as a going concern for a period of at least twelve months from when the financial Statements are aLJthorised for i55ue. Our responsibilities and the respon5ibilitie5 of the trustees with respect to going concern are descrfbed in the relevant sections of this report. Other infom)ation The other information comprise5 the information included in the annual report other than the financial statements and our auditor's report thereon. The tru5tee5 are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of 355urance conclusion thereon. Our responsibilitv IS to read the other information and, in doing 50, consider whether the other information is rnaterially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise app&3rs to be materiallv rniS5tated. If we identify such material inconsi5tencie5 or apparent tllaterial rnis5t3tements. we are required to determine whether this gives rise to a material misstatement in the financial staternents themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Oplnlons on other matters prescrlbed by the Companles Act 2006 In our opinion, based on the work undertaken in the course of the audit.. the information given in the trustees, report, which include5 the director5, report prepared for cornpany law purposes, for the financial year for which the financial 5taternents are prepared 15 consistent with the financial statements,. and the directors, report included w￿h1￿ the trustee5' report ha5 been prepared in accordance with applicable legal requirements. B Lab (UK) INDEPENDENT AUDThOR'S REPORT TO THE MEMBERS OF B LAB (UK) Matters on which we are required to report by exception In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees. report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if. in our opinion.. adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us- or the fin3ncial staternents are not in agreement with the accounting records and returns,. or certain disclosures of trustees, remuneration specified by law are not made,. or we have not received all the information and explanations we require for our audit,. or the tru5tee5 were not entitled to prepare the financial 5taternent5 in accordance with the small companies regime and take advantage of the smèll companie5, exetnptions in preparing the trustees, report and from the requirement to prepare a strategic report. Responsibilitie5 of trustees A5 explained more fully in the trustees, respon5ibilitie5 Statement set out on page 11 the trustees (who are also the directors of the charitable company for the purposes of company lawl are responsible for the preparation of the financial statements 8nd for being Satisfied th8t they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial staternents that are free from material misstaternent, whether due to fraud or error. In preparing the financi31 statements, the trustees are responsible for assessing the charitable companvs ability to continue as a going concern, disclosin8, as applicable, matters related to going concern and using the going concern ba51S of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do $0. Audito￿5 responsibilities for the audit of the financial statements Our objective5 are to obtain reasonable assurance about whether the financial staternents a5 a whole are free Irom material misstatement, whether due to fraud or error, and to issue an auditorfs report that includes our opinion, Re350nable assurance 15 3 high level of assurance, but is not a guarantee that an audit condurted in accordance with ISA5 IUKI will alway5 detect a material mi55tatement when it exist5. Mi55tatements can arise from fraud or error and are considered material if, individually or in the a88regate, they could reasonably be expected to influence the economic decisions of us@rs taken on the basi5 of the5& financial 5tat@ments. Irregularities, including fraud, are instances of non-compliance wlth laws and regulations. We deslgn procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are cap3ble of detecting irregularities, including fraud is detailed below.. Di5CU55ion5 Wlth and enquiries of managernent and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of th@se discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity. The following laws and regulations were identified as being of significance to the entity.. Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting Standards. Cornpany Law, Tax and Pension5 legislation, and the Charity SORP. Those law5 and regulations for which non-compliance rnay be fundamental to the operating a5pec15 of the business and therefore may have a mat&rial effect on the financial statement5 include health and safetv legislation. employment law and data protection. Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non- compliance with laws and regulations) comprised of." inquiries of management and thos& charged with governance as to whether the entity cornplies with such law5 and regulations,. enquiries with the same concerning any actual or potential litigation or claims,. inspection of relevant legal correspondence,. review of board minutes,. testing the appropriateness of journal entries," and the performance of analytical review to identify unexperted movements in account balances which rnay be indicative of fraud. B Lab (UK) INDEPENDENT AUDThOR'S REPORT TO THE MEMBERS OF B LAB (UK) No instances of material non-compliance wer& identified. However, the likelihood of detecting irregularities, including fraud, is limited by the Inherent difficulty in detecting irregularities. the effectiveness of the entitws controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherentlv rnore difficult to detect than irregularities that result Irorn error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAS IUKI. As part of an audit in accordance with ISAS IUKI, we exercise professional judgement and maintain professional 5cepticism throughout the audit. We also.. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design 8nd perform audit procedures responsive to those risks, and obtain 3udit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material mi55tatement resulting from fraud is higher than for one resulting frorn error, as fraud may involve collusion, forgery, intentional omi55ion5, rn15repre5entation5, or the override of internal control. Obtain an understanding of internal control relevant to the audit In order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressin8 an opinion on the effectiveness of the charitable company'5 internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the trustees. Conclude on the appropriatene55 of the trustees, use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ch8ritable company's ability to continue as a going concern. If we conclude that a rnaterial uncertainty exist5, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorfs report. However, future event5 or conditions may cause the charitable company to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial 5taternent5 represent the underlying transactions and events in 3 manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Use of our report This report is made solely to the charitable company's mernbers, as a body, in accordance with Chapter 3 of Part 16 of the Companie5 Act 2006. Our audit work ha5 been undertaken so that we might state to the charitable company'5 mernbers those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company'5 members as a body. lor our audit work. for this report. or for the opinions we have formed. Elizabeth Irvine (Senior Statutory Auditor) For 3nd behalf of WMT- Chartered Accountants and Statutory Auditor Verulam Point Station Way St Albans Hertfordshire ALI SHE Date 20 July 2022 Statement of Financial Activities (Incorporating income and Expenditure Account) For the vear ended 31 December 2021 B Lab (UK) Notes Unrestritted Restricted Totsi 2021 Unlestride Rtstri£90.000 5. Flxed assets computer E4ulpment 2021 FIx￿r¢S8nd Totsl 2021 2021 Cornputqr EquiFffjEnt C05t OppninE ￿lance 7.218 1,534 8.752 6.020 6.020 0051Th8 balan Deweclation Openin6 balance Depreciation chètye Iorthe year Depr￿latIOn eliminated ODd15po￿l 05in8 balan(e 1,534 13.734 80 3.791 1.655 383 2.038 453 4.791 Netbor*kvaluÉ 31 D1￿Mb￿r2D21 7,872 1,071 NetbDDkvalue 31 D￿eMbEr2￿20 3.507 1,454 4.961 6. Debtors Restrfcted Totsi 2021 Restyscted Totsi 2fy20 TradedebtOrS 425.604 425.604 16.870 307,448 FrepayrnentsandACcfued Income 14.797 14.797 15.303 IS.303 11.750 ii.?so Total DBbtor5 452.151 454151 292,834 31173 325,W7 Notes to the Accounts Continued 7. Credltors Restrf¢ted Totsi 2021 Unre5trf¢ted Restyscted Totsi 2fy20 255.685 4.464 260.L49 90,396 90,396 ActruÈlsiDd dÈlÈtteJ intome 1.038.769 1.038.769 S79,￿0 10.620 590,260 88.WS 88.005 3￿,95$ 38,959 Total Credftor5 L382.459 464 1.386.923 708.995 10.620 719.615 Def8rr8d income and accrualsaMITrBis Deferred IncomÈ babnce lJanJ20 4￿,365 Defetred Incotne 31 Dec2020 554.872 995.845 Dpferred income baknnce 31 Dec2021 995,845 42.924 Total ac¢ma15&nd deferral iThCL￿e at31 Decernber2Q21 IA138,769 Notes to the Accounts continued 8. Reconclllatlon of Funds Frfqnds p￿￿dent Thlrty Percv Total 2D21 Santsndèy Gates Unyestrfcted Tots12021 Tasktorc• Bal3nce b/1 In(¢Me 42.474 50,000 91.354 361,052 452,￿)6 15,1 18,430 33.430 1.624,W 115.(Wl 131.YWI Tron5fer5 betweenlund5 1.120 Totalfunds 18,IrK ,100 293,914 312,014 Frf•nds P￿￿dent aiMat• T•sktorc• 2020 Santandei Thirty Percy Project PO￿1 ALVSti*tun Unrestrirted Tota12020 Restrfct•d IbDce blf 27.356 27.356 226.298 Income 25,1 75.923 50. 65.237 60.279 282.439 927.9)1 1.210.340 I25.￿) 166.2371 TroD5ftr5 betweenfund5 T<)falfund5 4U74 5Q,C 91,354 361￿52 452A06 9. Analysis of Funds 2021 Cllmate Taskfot¢e Santahde Total ¢stri¢tsd Tota12021 FiKedAs 8,943 8.943 Debtors 452.151 shat bank 4.4E4 22.56 1.215,279 Creditors 14.4641 14.4641 11.3S2.4591 11,386.9231 18,1 293,914 311014 Totalfur￿& ,ioo 5antsndei Thirty Percy Proip£t Purtal ALV5tiftuns Tot?1 2Q20 2U20 Prowdent Ta5klor(e Unre5trithd Re5trirted FiXed￿￿ets 4,961 4.961 Debtors 6,250 25.923 292,814 325.007 CB5hBt 16.2501 50.(XY) 69.$01 842.053 Creditor5 1706.9951 381￿52 Totalfurmls 42A74 5D,r 11,1201 91,3S4 452,406 Detalls of Restrlcted Funds Agiantwas rètèlvéd In2021tosupportthÈdevolopmèThtandpromotionof theSustslnabloAdloThGoal>Action t4lana8Èr.ThÈprojett¥éa>complÈtÈd In 2021. ThirtYPefty iendsProwdent Notes to the Accounts continued The 8 LabCOmpani￿ arelinkod bytheir contra(tual commimentsto8 Labcompany Inc butare Thot legallyassociatedwithone another. 5ontoTrder Santanderarefundin8thec05tof ofieernployee loworkont￿CIim3teT3Sk Forceprojectl3&de5cribed above) from￿prI1 2021toMarch 2022. 10. Reconciliation of net movement in funds to net cash llow from op2rating activilies Netincomefortheyearas per5tatementof 1140.392 198.7$2 DeprecIatic￿ char8e5 2.038 1.50S 1132.0051 667.308 NEt￿Sh used in operatinga(twrf£ie5 40L810 230.539 11. Related Party Transactions Dmpany5prretari¥l 5eMcesand £869+VATfor le8al advireduring 202112Q20. f695 + VATfprre815tereredofFireand ￿mp￿nY 5Kret6rial 5eryirps1. NotrUSte￿ rnade doTratlOn5durin8theyearl20201wDtru5tee5rnade donatlOn50f atotal £45.7691 HeliOtrOPy. è pfivlte liniit¢d¢ompaty. te¢eivel É13A90from BLJb VKf¢r¢onsultaw¢n the Climat¢TaskFor¢e12020-.£22.977I. Blab Company1nc. a Uscornpany. char8e5 B lab IUKI a royaltyfee on in(omefrom UK rertifitation le￿ and earned iTrcomeand a150 toBL3b CompanylfictMrt3renotleg3llya55Otiated with oneanothei. 12. FundraisinÈ proiECts. Nocomp13illts ab)ut fundraising havebeen received.