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2022-12-31-accounts

B Lab (UK)

(Incorporated company limited by guarantee)

Report of the Trustees and Financial Statements For the year ended

31 December 2022

Registered Charity No : 1164694 Registered Company No : 09388752 (England and Wales)

B Lab (UK)

Report of the Trustees for the year ended 31 December 2022

Contents

Report of the Trustees

3

Reference and Administration

Structure, Governance and Management

Review of Activities and Achievements

Financial Review

Looking Forward

Statement of Trustees’ Responsibilities 12
Independent Auditor’s Report to the Trustees of B Lab (UK) 13
Statement of Financial Activities 16
Balance Sheet 17
Statement of Cash Flows 18
Notes to the Financial Statements 19

B Lab (UK) Financial Statements year ended 31 December 2022

Page 2

B Lab (UK)

Report of the Trustees for the year ended 31 December 2022

Reference and Administration

The Trustees have pleasure in presenting their report and the audited financial statements of B Lab (UK) for the year ended 31 December 2022. The accounts have been prepared in accordance with the Companies Act 2006, the accounting policies as disclosed in the notes, and the charity's governing document. The Trustees have adopted the provisions of the Statement of Recommended Practice “Accounting and Reporting by Charities” (“FRS 102 SORP” (second edition)) in preparing the annual report and financial statements of B Lab (UK).

The Directors of the charitable company are its Trustees for the purposes of charity law and constitute the ‘Board’. The Trustees’ Report also represents the directors' report required by Company Law. The Trustees who have served during the year and since the year end were as follows:

Trustees

Nicola Clark, appointed 31 January 2023 Amy Clarke Mark Cuddigan, retired in October 2022 Louise Harman Mary Johnstone-Louis (Chair) Thomas Kenrick, appointed 31 January 2023 George King V, appointed 31 January 2023 Philippa Murray, appointed 25th April 2023 James Perry (Observer), resigned in January 2023 Yeliz Mert (Observer), resigned in June 2022

Company Secretary

Eilish Kavanagh

Executive Staff

Chris Turner Executive Director Eilish Kavanagh Director of Finance & Operations James Ghaffari Director of Growth and Product Rosalind Holley Director of Marketing & Communications (from April 2022) Thomas Ebbutt Director of Impact (from March 2023)

Charity and Company Information

Its primary charity and company information is as follows:

Principal address and Registered Office

20-30 Whitechapel Road London E1 1EW

Bankers

Coutts & Co 440 Strand London WC2R 0QS

Solicitors

Bates Wells 10 Queen Street Place London EC4R 1BE

Auditors

WMT Chartered Accountants 4 Beaconsfield Road St Albans, Hertfordshire AL1 3RD

Website: www.bcorporation.uk

Registered Company No: 09388752 (England and Wales) Registered Charity No: 1164694

B Lab (UK) Financial Statements year ended 31 December 2022

Page 3

B Lab (UK)

Report of the Trustees for the year ended 31 December 2022

Structure, Governance and Management

Objectives and public benefit

As set out in the Articles of Association, B Lab (UK) exists to further the following objects for the public benefit:

  1. To advance the education of the public in subjects relating to sustainable development and sustainable business and to promote study and research in such subjects provided that the useful results of such study are disseminated to the public at large.

  2. To promote sustainable development for the benefit of the public by:

  3. 2.1 the preservation, conservation and the protection of the environment and the prudent use of resources; and

  4. 2.2 the promotion of sustainable 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.

  1. To promote compliance with the law and ethical standards of conduct, including without limitation by encouraging the adoption and application of high standards of business ethics and governance and thereby

  2. 3.1 maximising the material positive impact of business activities on people and the environment affected by such activities; and

  3. 3.2 minimising the negative effects of business activities on people and the environment affected by such activities.

Corporate Governance and Decision making

B Lab (UK) was incorporated as a company limited by guarantee in England & Wales on 14 January 2015 and registered as a charity with the Charity Commission for England and Wales on 3 December 2015.

The licensing arrangements with B Lab Company, a Pennsylvania non-profit corporation (“B Lab Global”), the organisation supporting the global development of the B Corp movement, state that royalty fees of 5% of all nonphilanthropic income generated by B Lab (UK) is paid to B Lab Global to support back-office development of the global movement, 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 commitment to the aims of the charity. Decisions are taken in the following way:

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 Board reviewed how it meets the Code and has an active plan to improve appropriate areas it does not fully meet during 2023. Recent improvements include putting in place policies such as Investment, Treasury, Whistleblowing, Carer policies, a Scheme of Delegation, a Trustees Code of Conduct, and an Induction process for new Trustees.

The trustees have regard to the Charity Commission's guidance on public benefit when reviewing B Lab UK's aims and objectives and in planning its future activities. In particular, the Trustees consider how planned activities will contribute to the aims and objectives that have been set.

B Lab (UK) Financial Statements year ended 31 December 2022

Page 4

B Lab (UK)

Report of the Trustees for the year ended 31 December 2022

Risk Management and Internal Control

The Trustees have considered the major risks to which the charity is exposed and have satisfied themselves that systems and procedures have been established to manage these risks. The major risks may be summarised as follows along with the likelihood of them occurring and the steps taken to mitigate against each risk.

Financial Risk Likelihood Mitigation
Costs of delivery of B Corp
programme risewith
changes to B Lab �lobal
business model		 High ●Working with B Lab Global to minimise
impact of cost increase on B Lab UK
●Standardise process and systematise
our work to reduce time and resources.
●Updating UK pricing structure and
business model
The number of companies
certifying as B Corps do not
reflect budgeted income		 Medium ●Business development strategy is to
back many companies simultaneously
●Actively encourage new companies to
use the BIA
●Have built capacity in the team to
reduce the time taken to certify with
increased demand
Existing B Corps are not able to
pay their annual fees due to the
economic climate		 Medium ●Aged debtor tracking process
●Keep closely informed about
companies
Non-financial risks Likelihood Mitigation
New standards are not fit for UK
market leading to deceleration of
growth, or if delayed beyond
start of 2024 leading to a loss of
credibility		 High ●influence to ensure new standards fit
for purpose and communicated well.
●Consultation periods being used to
gather and respond to feedback.
Larger, more complex businesses
certifying, increasing risk of
criticism of the certification		 Medium - High ●tracking the certification queue to
identify potential controversial
businesses.
●A risk management strategy is in place
for the pipeline.
●Created a toolkit of statements and
FAQs,as well as a commsplan
Reputation damage e.g. through
poor-performing B Corp, or
controversial activities		 Medium ●Due Diligence processes in place;
recertification required every 3 years.
●Keeping close contact with our B Corp
community to address challenges.
●Early response to potential issues
flagged with B Lab Global.
●Good communications around the B
Corp movement globally
●Verification checks and on-site reviews
carried out mitigate this risk.

B Lab (UK) Financial Statements year ended 31 December 2022

Page 5

B Lab (UK)

Report of the Trustees for the year ended 31 December 2022

Review of Activities and Achievements

Activities

All the activities of B Lab (UK) support the above charitable objectives.

From time to time the Trustees of B Lab (UK) have formally reviewed the activities of B Lab (UK) and are of the view that any private benefit arising from the certification scheme could be considered as a means of furthering the objects and that any private benefit is necessary and incidental and is offset b� pa�ment of certification fees. The Trustees of B Lab(UK) will continue to keep this under review.

We achieve our purpose to advance the education of the public in subjects relating to sustainable development and sustainable business through the following activities.

B Lab (UK) Financial Statements year ended 31 December 2022

Page 6

B Lab (UK)

Report of the Trustees for the year ended 31 December 2022

policymakers about how purpose can be embedded in governance. The campaign is also focused on educating policymakers about how B Corps can be used as a model for change in governance policy. The trustees have considered Charity Commission guidance CC9 and consider the campaign to be an effective way of furthering or supporting B Lab (UK)’s purpose of advancing education.

To support this work, we also engage in operational activities to support any organisation interested in “Measuring What Matters” with a comprehensive set of tools, masterclasses, peer support, and best practice exchange – all with the aim 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.

All our activities support our third object, namely, to promote compliance with the law and ethical standards of conduct by maximising the material positive impact of business activities on people and the planet and minimising their negative activity. In particular, our campaign to implement changes to the Companies Act (section 172) which would embed the commitment to running all businesses for the benefit of all, not just for shareholders. This activity is undertaken in the context of supporting the delivery of B Lab (UK)’s charitable purposes of promoting compliance with the law and ethical standards of conduct by creating the governance to enable our system to go beyond the minimum requirements and to form the most ethical governance for companies to operate and comply with the law.

Rationale

We aim to redefine success in business and to promote sustainable development widely across UK institutions and organisations. We seek to create a change in the way business operates for a greater good for all, rather than just the

B Lab (UK) Financial Statements year ended 31 December 2022

Page 7

B Lab (UK)

Report of the Trustees for the year ended 31 December 2022

interests of shareholders, and in so doing, bring positive impact to citizens, to communities and to the environment. This urgent need is clearly recognised now amongst a wider range of stakeholders but there are systems 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 B Impact Assessment tool) so that trust in business can be rebuilt over time. We recognise that whilst there will always be leaders who will forge ahead with new approaches, it will take considerably longer for the systemic barriers to be lifted to achieve our end goal – namely, for the broader stakeholder approach to business eventually to become the “de facto” way of doing business. Our end goal is to maximise the material positive 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 entrepreneurs and established businesses who certify their businesses as B Corps because they run their businesses according to the highest ethical standards of conduct. These businesses exemplify the material positive impact of B Corps, and help consumers, clients, and potential employees distinguish good practice from good marketing within a company. By maximising the material positive impact 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.

Achievements and performance in 2022

By the end of 2022, the UK B Corp community had grown to 1158 B Corps (577 at the end of 2021), representing 58 industries with a combined revenue of £21 billion and over 56,000 employees. Additionally, we have built an extensive pipeline of interested companies (over 28,500 companies) who are using the BIA and progressing towards certification – and are therefore “Measuring What Matters”. Whilst we realise that many of these companies in the pipeline will need considerable time and support to progress towards certification, their progress is an important indicator of the success of our work, and we include this as one of our Key Performance Indicators (see below).

We are grateful to have received a wide range of support, promotion, media coverage, personal recommendations, endorsements by companies, inquiries and feedback from academics, businesses, lawyers, and policymakers on our work. The leadership of B Lab UK is incredibly proud of the achievements of our passionate, talented and hard-working team in 2022. Excellent work has been delivered, and tangible progress toward our mission has been achieved.

Highlights of 2022:

B Lab (UK) Financial Statements year ended 31 December 2022

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B Lab (UK)

Report of the Trustees for the year ended 31 December 2022

to the first certification fee to eligible businesses. We supported a series of awareness-raising events and workshops with the Allbright women’s network and engaged with POC business accelerators such as Foundervine, Hatch Enterprise, and the Kings Cross Impact Hub. With Hatch we hosted a focus group for women of colour who lead or own businesses to discuss the sustainability sector and barriers to certification. This led to the launch of the Equitable Growth Advisory Group which began work in early 2023.

B Lab (UK) Financial Statements year ended 31 December 2022

Page 9

B Lab (UK)

Report of the Trustees for the year ended 31 December 2022

Measurements of success in 2022

The following key performance indicators are used to assist us to monitor our progress toward achieving our objectives.

----- Start of picture text -----
By end of By end of By end of By end of By end of
Key Performance Indicator
2018 2019 2020 2021 2022
Number of B Corps certified
178 272 360 577 1,158
in the UK
Average number of new Between 30- Between 50-
Approx. 95 Approx. 160 Approx. 120
accounts created each week 40 60
Number of organisations
interested in measuring their
impact on people and the
3,325 6,961 12,698 21,269 28,555
planet through the B Impact
Assessment tool (in our
“pipeline”)
21 events
8 B Socials, 4
(virtual and
CEO events, 3 10, including
f2f), including
Learn to Bs, 1 the B Inspired 23 (many 99 events
Events, discussions, socials Climate
retreat, 1 B event with virtual due to (virtual and
that we held across the UK Summits, 3 B
Leaders over 600 COVID) f2f)
Leader
course and 1 attendees
courses, and
BD Bootcamp
at COP26
Website hits and 34,617 56,572, 134, 252, 181,366* c126,000,
Social media followers - 18,000 37,000 65,000 95,000
----- End of picture text -----**

*In December 2021 the global site architecture for B Lab Global / B Lab UK was updated, moving the B Corp directory to a centralised global location. As a result, we anticipated around a 30% drop in web traffic to B Lab UK in 2022.

** Events held during 2022 included Better Business Day in April, 1000xBetter B Corps celebration event at the Natural History Museum in November, 35 B Locals & 36 B Corp Working Groups, panel discussions, Impact Webinars, 4 B Socials, 5 B Leader meetings, an event with Hatch to discuss JEDI & B Corps, an event with Cwmpas to engage Welsh businesses and 4 virtual events for companies interested in becoming B Corps.

Financial review

For the year ended 31 December 2022 B Lab (UK) had a deficit of £272,225 (2021: deficit of £140,392). Funds of the charity on 31 December 2022 were £39,789 (2021: £312,014), all of which were unrestricted (2021: £293,914) and £0 (2021: £18,100) restricted. These funds exclude the income received in 2022 which has been deferred to 2023 of £2,270,815 (2021: £995,845 was deferred to 2022)

Grants, donations and gifts in kind were 0.02% of total revenue of £3,416,796 (2021: 2% of £1,624,584). Income earned from charitable activities has increased by 109% to £3,329,821 from £1,591,154 (2020: 73%). All expenditure is related to charitable activities.

As a licensee of B Lab Company (US), the non-profit making organisation supporting the global development of the B Corp movement, royalty fees were paid at 5% of all non-philanthropic and unrestricted income generated by B Lab (UK). B Lab UK ensures that it allows for exchange rate fluctuation in its budget.

Reserves policy

The costs incurred in certif�ing companies are paid up front but companies are invoiced onl� when the� are successful in being certified, and the income is recognised according to the time period it relates to across a �� month period. �uring the current growth phase a significant amount of income is deferred to the following financial �ear. The impact of the deferred income balance will even out if growth slows.

The Trustees ta�e a ris� based approach to reserves and consider the amount of deferred income and cash held when determining a sufficient level of reserves to meet the estimated impact of significant ris�s and provide reasonable fle�ibilit� to enable B Lab UK to operate smoothl�.

B Lab (UK) Financial Statements year ended 31 December 2022

Page 10

B Lab (UK)

Report of the Trustees for the year ended 31 December 2022

The unrestricted free reserves balance on 31 December 2022 of £39,789. �owever if the non�refundable income receipts deferred to 2023 of £2,270,815 are ta�en into account the total amount of £2,310,604 represents 7.5 months of unrestricted expenditure, and the Trustees consider this sufficient to cover the ris�s identified and operations.

The Board monitors the level of unrestricted reserves and deferred income �uarterl� and reviews the level of reserves annually, in line with the growth expected and budgets are set to increase the unrestricted reserves each �ear, aiming to hold ��� months of unrestricted e�penditure within � �ears.

Fundraising

All fundraising activity is undertaken internally and is aimed at funding specific projects. No complaints about fundraising have been received.

Looking Forward: Plans for Future Period

The Trustees approved a new Business Plan for 2023, 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 strategic goals:

In 2023, B Lab UK will build on the momentum generated in 2022 to deliver impact that is focused in pursuit of our mission. in delivering our ambitious goals and in mitigation of the risks listed above, we intend to:-

We will do this through:

All of these activities and plans are consistent and reinforce our charitable objects for the public benefit.

B Lab (UK) Financial Statements year ended 31 December 2022

Page 11

B Lab (UK)

Report of the Trustees for the year ended 31 December 2022

Statement of Trustees’ Responsibilities

The trustees (who are also the directors for the purpose of company law) 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 must prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the trustees must not approve the financial statements unless 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:

a) select suitable accounting policies and then apply them consistently.

b) observe the methods and principles in the Charities SORP;

c) make judgments and accounting estimates that are reasonable and prudent;

d) state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

e) prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue to operate.

The trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company’s transactions and disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps 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 preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The trustees confirm that so far as they are aware, there is no relevant audit information (as defined by section 418(3) of the Companies Act 2006) of which the charitable company’s auditors are unaware. They have taken all 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 provisions relating to small companies within part 15 of the Companies Act 2006.

This report was approved by the board of directors on:

Date _�� �ul� ����__

Director ____

B Lab (UK) Financial Statements year ended 31 December 2022

Page 12

B Lab (UK)

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF B LAB (UK)

Opinion

We have audited the financial statements of B Lab (UK) (the ‘charitable company’) for the year ended 31 December 2022 which comprise the Statement of Financial Activities, Balance Sheet, Statement of Cash Flows and Notes to the Accounts including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s 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 our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is 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 authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The trustees 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 assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

B Lab (UK) Financial Statements year ended 31 December 2022

Page 13

B Lab (UK)

INDEPENDENT AUDITOR’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:

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement set out on page 12 the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design 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 capable of detecting irregularities, including fraud is detailed below:

Discussions with and enquiries of management 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 these 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:

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and noncompliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws 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 unexpected movements in account balances which may be indicative of fraud.

B Lab (UK) Financial Statements year ended 31 December 2022

Page 14

B Lab (UK)

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF B LAB (UK)

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from 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 (UK).

As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

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 members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company’s members 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’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Elizabeth Irvine (Senior Statutory Auditor)

Elizabeth Wicks (Senior Statutory Auditor)

For and behalf of For and on behalf of

WMT WMT - Chartered Accountants and Statutory Auditor - Chartered Accountants and Statutory Auditor Verulam Point 4 Beaconsfield Road Station Way St Albans St Albans Hertfordshire AL1 3RD Hertfordshire

AL1 5HE Date: 6 September 2023 Date

B Lab (UK) Financial Statements year ended 31 December 2022

Page 15

Statement of Financial Activities (Incorporating income and Expenditure Account) For the year ended 31 December 2022 B Lab (UK)

Notes
Donations and Legacies
2
Charitable Activities
2
Other trading activities
2
Investments
2
Total
Expenditure on:
Charitable Activities
3
Total
Net income/(expenditure)
Transfers between funds
Net Movement in Funds
Reconciliation of Funds
Funds brought forward
Funds carried forward
Income and Endowments from:		 Unrestricted
Restricted
Total 2022
Unrestricted
Restricted
Total 2021
£
£
£
£
£
£
687
-
687
-
33,430
33,430
3,329,821
-
3,329,821
1,591,154
-
1,591,154
85,500
-
85,500
-
-
-
788
-
788
-
-
-
3,416,796
-
3,416,796
1,591,154
33,430
1,624,584
(3,670,921)
(18,100)
(3,689,021)
(1,657,172)
(107,804)
(1,764,976)
(3,670,921)
(18,100)
(3,689,021)
(1,657,172)
(107,804)
(1,764,976)
(254,125)
(18,100)
(272,225)
(66,018)
(74,374)
(140,392)
-
-
-
(1,120)
1,120
-
(254,125)
(18,100)
(272,225)
(67,138)
(73,254)
(140,392)
293,914
18,100
312,014
361,052
91,354
452,406
39,789
-
39,789
293,914
18,100
312,014

B Lab (UK) Financial Statements year ended 31 December 2022

Page 16

Balance Sheet

For the year ended 31 December 2022 B Lab (UK)

Notes
Fixed Assets:
Tangible assets
5
Total Fixed Assets:
Current assets:
Debtors
6
Cash at bank and in hand
Total Current assets:
Liabilities
Creditors: Amounts falling due within one year
7
Net current assets
Total net assets
Total funds of the charity
Restricted funds
8,9
Unrestricted funds
8,9
Total Funds of the Charity		 Unrestricted
Restricted
Total 2022
Unrestricted
Restricted
Total 2021
£
£
£
£
£
£
22,887
-
22,887
8,943
-
8,943
22,887
-
22,887
8,943
-
8,943
1,078,480
-
1,078,480
452,151
-
452,151
1,896,945
-
1,896,945
1,215,279
22,564
1,237,843
2,975,425
-
2,975,425
1,667,430
22,564
1,689,994
2,958,523
-
2,958,523
1,382,459
4,464
1,386,923
16,902
-
16,902
284,971
18,100
303,071
39,789
-
39,789
293,914
18,100
312,014
-
-
-
-
18,100
18,100
39,789
-
39,789
293,914
-
293,914
39,789
-
39,789
293,914
18,100
312,014

Registered Charity Number : 1164694, registered Company Number : 09388752

The Trustees acknowledge their responsibilities for complying with the requirements of the Companies Act 2006. Under Companies Act 2006, Section 454, on a voluntary basis, the trustees can amend these financial statements if they subsequently prove to be defective. The financial statements are prepared in accordance with the special provisions applicable to companies subject to the small companies regime.

Approved by the Board of directors on ��th July 202�, and signed on its behalf

Name: �ar� �ohnstone�Louis�_ Signature: ___

Name: �m� �lar�e___ Signature: ___

B Lab (UK) Financial Statements year ended 31 December 2022

Page 17

Statement of Cash Flows

For the year ended 31 December 2022 B Lab (UK)

Notes
Cash flow from operating activities
Net cash flow from operating activities
10
Cash flow from investing activities
Purchase of tangible fixed assets
5
Net cash flow from investing activities
Change in cash and cash equivalents in the year
Cash and cash equivalents brought forward
Cash and cash equivalents carried forward
Analysis of changes in net debt
Cash at bank and in hand
Loans falling due within one year
Loans falling due after more than one year		 2022
2021
£
£
678,366
401,810
(19,264)
(6,020)
659,102
395,790
659,102
395,790
1,237,843
842,053
1,896,945
1,237,843
At 1 Jan 2022
Cash flows
Non cash
changes
At 31 Dec 2022
£
£
£
£
1,237,843
653,782
5,320
1,896,945
-
-
-
-
-
-
-
-
1,237,843
653,782
5,320
1,896,945

B Lab (UK) Financial Statements year ended 31 December 2022

Page 18

Notes to the Accounts

For the year ended 31 December 2022 B Lab (UK)

1. Accounting Policies

Basis of Preparation and assessment of going concern

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (2[nd] Edition effective January 2019) - (Charities SORP (FRS 102)), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

The Financial Statements have been prepared under the historical cost convention.

The Charity constitutes a public benefit entity as defined by FRS 102.

The financial statements are prepared on the going concern basis. B Lab (UK) has reserves of £39,789 at 31 December 2022 including net current assets of £16,902 and cash at bank of £1,896,945

The Trustees have reviewed the financial position of the charity at 31 December 2022 and considered their forecasts in relation to the major risks and they consider the charity is a going concern.

The financial statements have been prepared on a going concern basis as the trustees believe that no material uncertainties exist. The trustees have considered the level of funds held and the expected level of income and expenditure for 12 months from authorising these financial statements. The budgeted income and expenditure is sufficient with the levels of reserves for the Charity to be able to continue as a going concern.

Income

All incoming resources are included in the Statement of Financial Activities when the Trust is legally entitled to the income, it is probable that the income will be received and the amount can be quantified with reasonable accuracy.

Customers are recertified every three years. In the year that they recertify, income is only recognised if the recertification is successful. Interim annual fees to retain certification (which do not require a certification test) are recognised according to the time period in which the customer has received benefit of certification, to the nearest month. Certification fee income is deferred if it relates to a time period after the year end.

Donated services are included within the accounts at fair value.

Grants Received

Income from grants and donations is recognised where the charity is entitled to the income, it is probable that the income will be received and the amount receivable can be quantified. Where there are specific terms or conditions attached to grants and donations, these must be met before the income is recognised. Where terms or conditions have not been met or uncertainty exists as to whether they can be met then the relevant income is not recognised in the year but is deferred and shown on the balance sheet as deferred income receivable.

Expenditure

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to that expenditure, it is probable that settlement will be required and the amount of the obligation can be measured reliably.

All expenditure is accounted for on an accruals basis.

Unrestricted Funds

General unrestricted funds represent unrestricted income which is expendable at the discretion of the Trustees.

Irrecoverable VAT

Irrecoverable VAT is charged against the expenditure heading for which it was incurred.

B Lab (UK) Financial Statements year ended 31 December 2022

Page 19

Notes to the Accounts continued

Charitable activities

Costs of charitable activities include governance costs and support costs. Salary costs are apportioned to governance costs depending on time spent by staff on governance matters.

Tangible fixed assets and depreciation

The cost or valuation of tangible fixed assets is their purchase cost or valuation, together with any incidental expenses of acquisition. Only tangible assets with a cost of over £500 will be capitalised.

Depreciation is calculated so as to write off the cost of tangible fixed assets, less their estimated residual values, on a straight line basis over the expected useful economic lives of the assets concerned, as follows:

Computer and Office Equipment: 4 years

Debtors

Short term debtors are measured at transaction price, less any impairment losses.

Creditors

Short term creditors are measured at the transaction price.

Financial Instruments

The Charity only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities such as debtors and creditors. Financial instruments are initially measured at transaction value. They are assessed at the end of each report period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the SOFA.

Judgements in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the period. The nature of estimation means the actual outcomes could differ from those estimates. There are no judgments made that have a significant effect on the amounts recognised in the financial statements.

Realised gains and losses

All gains and losses are taken to the Statement of Financial Activities as they arise. Unrealised gains and losses are calculated as the difference between the fair value at the year end and their carrying value.

Legal status of the Charity

The Charity is a company limited by guarantee and has no share capital. In the event of the charity being wound up, the liability in respect of the guarantee is limited to £1 per member.

Trustee expenses and remuneration

The trustees all give freely their time and expertise without any form of remuneration or other benefit in cash or kind. During 2022, 4 trustees had travel expenses reimbursed of £675 in total (2021: 3 trustees £1,006).

Foreign exchange

Transactions in foreign currencies are transacted at rates prevailing at the date of the transaction. Balances in foreign currency are translated at the rate of exchange prevailing at the year-end. All exchange differences are taken to the Statement of Financial Activities. The only foreign currencies the charity transacts in are US dollars and Euros.

B Lab (UK) Financial Statements year ended 31 December 2022

Page 20

Notes to the Accounts continued

2. Income

(a) Income from Donations and Legacies

Grants
Donations
Total Income from Donations and Legacies		 Unrestricted
Restricted
Total 2022
Unrestricted
Restricted
Total 2021
£
£
£
£
£
£
-
-
-
-
33,430
33,430
687
-
687
-
-
-
687
-
687
-
33,430
33,430

Details of Restricted Income

Friends Provident

In 2019 a grant of £75,000 was agreed from Friends Provident Foundation. The grant is spread over a period of 3 years to 30[th] September 2021. An amount of £25,000 was received in 2020 and a further £15,000 was received in 2021.

(b) Income from Charitable Activities

Certification fees
B Corp social events
B Leaders
Other income: consultancy, workshops and
promotional items
Total Income from Charitable Activities
(c) Income from other trading activities
Event sponsorship
Total Income from other trading activities
(c) Income from investments
Interest
Total Income from investments
Total Income		 Unrestricted
Restricted
Total 2022
Unrestricted
Restricted
Total 2021
£
£
£
£
£
£
3,299,033
-
3,299,033
1,543,417
-
1,543,417
19,174
-
19,174
-
-
-
-
-
46,752
-
46,752
11,614
-
11,614
985
-
985
3,329,821
-
3,329,821
1,591,154
-
1,591,154
Unrestricted
Restricted
Total 2022
Unrestricted
Restricted
Total 2021
£
£
£
£
£
£
85,500
-
85,500
-
-
-
85,500
-
85,500
-
-
-
Unrestricted
Restricted
Total 2022
Unrestricted
Restricted
Total 2021
£
£
£
£
£
£
788
-
788
-
-
-
788
-
788
-
-
-
3,416,796
-
3,416,796
1,591,154
-
1,591,154

B Lab (UK) Financial Statements year ended 31 December 2022

Page 21

Notes to the Accounts continued

3. Charitable Expenditure

Operation of certification program
Programme royalty, verification and referral fees
Community
Product Development
Business Development
Total Operation of certification program
Total Direct costs of charitable activities
Support Costs
Salaries, pension, taxes and employee benefits
Recruitment costs
Staff costs - training and development
Subcontractor and other personnel costs
Marketing
Campaigns
Depreciation
IT
Rent
Conference Fees
General Office Expenses
Bad debt charge
Accountancy and HR costs
Total Support Costs (excl governance costs)
Governance costs
Audit fees
Legal Fees
Other governance costs
Total Governance costs
Total Support Costs (including governance costs)
Total cost of charitable activities		 Unrestricted
Restricted
Total 2022
Unrestricted
Restricted
Total 2021
£
£
£
£
£
£
2,000,180
-
2,000,180
588,954
-
588,954
37,439
-
37,439
32,256
-
32,256
1,569
-
1,569
5,971
-
5,971
86,475
-
86,475
17,148
-
17,148
2,125,663
-
2,125,663
644,329
-
644,329
2,125,663
-
2,125,663
644,329
-
644,329
716,951
18,100
735,051
410,029
46,900
456,929
14,008
-
14,008
23,798
-
23,798
42,329
-
42,329
3,922
-
3,922
35,464
-
35,464
89,905
-
89,905
266,579
-
266,579
112,534
17,658
130,192
134,366
-
134,366
149,261
37,474
186,735
5,319
-
5,319
2,038
-
2,038
45,123
-
45,123
72,805
-
72,805
110,805
-
110,805
65,508
-
65,508
7,199
-
7,199
12,764
-
12,764
28,590
-
28,590
14,018
5,772
19,790
53,792
-
53,792
5,375
-
5,375
23,017
-
23,017
16,203
-
16,203
1,483,542
18,100
1,501,642
978,160
107,804
1,085,964
9,800
-
9,800
10,458
-
10,458
3,270
-
3,270
1,429
-
1,429
48,646
-
48,646
22,796
-
22,796
61,716
-
61,716
34,683
-
34,683
1,545,258
18,100
1,563,358
1,012,843
107,804
1,120,647
3,670,921
18,100
3,689,021
1,657,172
107,804
1,764,976

Audit fees for 2022 were £10,000 + VAT. An amount of £(200) relates to the audit fees for 2021.

Recruitment costs have moved from General Expenses to their own subheading Recruitment Costs and this has also been applied to 2021 expenditure.

B Lab Company Inc, a US company, charges B Lab (UK) a royalty fee on income from UK certification fees and earned income and also recharges the costs of some global software licences and similar costs. The B Lab companies are linked by their contractual commitments to B Lab Company Inc but are not legally associated with one another.

B Lab (UK) Financial Statements year ended 31 December 2022

Page 22

Notes to the Accounts continued

4. Employee costs

----- Start of picture text -----
|||||||| |---|---|---|---|---|---|---| |Unrestricted|Restricted|Total 2022|Unrestricted|Restricted|Total 2021| |£|£|£|£|£|£| |Salaries|998,430|16,769|1,015,199|486,187|43,216|529,403| |Social security costs|108,590|1,077|109,667|67,811|2,978|70,789| |Pension costs|84,788|254|85,042|14,331|706|15,037| |Total Employment Costs|1,191,808|18,100|1,209,908|568,329|46,900|615,229| |Employment Information| |2022|2021| |Key management personnel compensation|£335,727|£283,283| |Average number of employees during the| |23|14| |period:|

----- End of picture text -----

The key management personnel of the charity are considered to be the Chief Operating Officer, the Director of Finance and Operations, the Director of Growth and Product and the Director of Marketing and Communications.

----- Start of picture text -----
|||| |---|---|---| |Number of|Number of| |employees in 2022|employees in 2021| |£60,000-£70,000|-|1| |£70,000-£80,000|2| |£80,000-£90,000|1| |£90,000-£100,000|1|

----- End of picture text -----

B Lab (UK) Financial Statements year ended 31 December 2022

Page 23

Notes to the Accounts continued

5. Fixed assets

----- Start of picture text -----
Computer Fixtures and
Total
Equipment Fittings
2022 2022 2022
£ £ £
Computer Equipment
Cost
Opening balance 12,200 1,534 13,734
Additions 11,475 7,789 19,264
Disposals (1,623) - (1,623)
Closing balance 22,052 9,323 31,375
Depreciation
Opening balance 4,328 463 4,791
Depreciation charge for the year 4,304 1,016 5,320
Depreciation eliminated on disposal (1,623) - (1,623)
Closing balance 7,009 1,479 8,488
Net book value 31 December 2022 15,043 7,844 22,887
Net book value 31 December 2021 7,872 1,071 8,943
----- End of picture text -----

All fixed assets belong to unrestricted funds.

6. Debtors

Trade debtors
Prepayments and Accrued Income
Other debtors
Total Debtors
7. Creditors
Trade creditors
Accruals and deferred income
Taxation and Social Security
Total Creditors		 Unrestricted
Restricted
Total 2022
Unrestricted
Restricted
Total 2021
£
£
£
£
£
£
1,032,901
-
1,032,901
425,604
-
425,604
20,339
-
20,339
14,797
-
14,797
25,240
-
25,240
11,750
-
11,750
1,078,480
-
1,078,480
452,151
-
452,151
Unrestricted
Restricted
Total 2022
Unrestricted
Restricted
Total 2021
£
£
£
£
£
£
314,568
-
314,568
255,685
4,464
260,149
2,330,194
-
2,330,194
1,038,769
-
1,038,769
313,761
-
313,761
88,005
-
88,005
2,958,523
-
2,958,523
1,382,459
4,464
1,386,923

Deferred income and accruals analysis

Deferred income balance 1 Jan 2021
Deferred income balance 31 Dec 2021
Deferred income balance 31 Dec 2022
Accruals
Total accruals and deferral income at 31 December 2022
Release: certification fee income invoiced in 2020 but relating to 2021
Deferral: certification fee income invoiced in 2021 but relating to 2022
Release: certification fee income invoiced in 2021 but relating to 2022
Deferral: certification fee income invoiced in 2022 but relating to 2023		 £
554,872
(554,872)
995,845
995,845
(995,845)
2,270,815
2,270,815
59,379
2,330,194

B Lab (UK) Financial Statements year ended 31 December 2022

Page 24

Notes to the Accounts continued

8. Reconciliation of Funds

----- Start of picture text -----
Total
2022 Santander Unrestricted Total 2022
Restricted
£ £ £ £
Balance b/f 18,100 18,100 293,914 312,014
Income - - 3,416,796 3,416,796
Expenditure (18,100) (18,100) (3,670,921) (3,689,021)
Total funds - - 39,789 39,789
Friends Climate Thirty Total
2021 Santander Gates Unrestricted Total 2021
Provident Taskforce Percy Restricted
£ £ £ £ £ £ £ £
Balance b/f - 42,474 50,000 (1,120) - 91,354 361,052 452,406
Income 15,000 - - - 18,430 33,430 1,591,154 1,624,584
Expenditure (15,000) (42,474) (31,900) - (18,430) (107,804) (1,657,172) (1,764,976)
Transfers between funds - - - 1,120 - 1,120 (1,120) -
Total funds - - 18,100 - - 18,100 293,914 312,014
----- End of picture text -----

9. Analysis of Funds

----- Start of picture text -----
2022 Total 2022
£
Fixed Assets 22,887
Debtors 1,078,480
Cash at bank 1,896,945
Creditors (2,958,523)
Total funds 39,789
----- End of picture text -----

In 2022, all funds were unrestricted

----- Start of picture text -----
Climate Total Total
2021 Santander Unrestricted
Taskforce Restricted 2021
£ £ £ £ £
Fixed Assets - - - 8,943 8,943
Debtors - - - 452,151 452,151
Cash at bank 4,464 18,100 22,564 1,215,279 1,237,843
Creditors (4,464) - (4,464) (1,382,459) (1,386,923)
Total funds - 18,100 18,100 293,914 312,014
----- End of picture text -----

Details of Restricted Funds

Bill and Melinda Gates Foundation

A grant was received in 2021 to support the development and promotion of the Sustainable Action Goals Action Manager. The project was completed in 2021.

Thirty Percy

The Thirty Percy Foundation, alongside a private donation, are supporting a three year program to build a portfolio of philanthropic partners to raise funds for B Lab's five year strategy. The program finished in 2021, combined with a transfer of £1120 from unrestricted reserves.

Friends Provident

The Friends Provident Foundation supported marketing costs for B Lab (UK) over a three year period. The grant was paid in arrears in instalments and covered costs such as marketing staff and publicity expenditure. The grant commenced in January 2019 and finished in September 2021.

B Lab (UK) Financial Statements year ended 31 December 2022

Page 25

Notes to the Accounts continued

Climate Task Force

The Climate Task Force project is a collaboration between the B Lab companies across the world in driving change in various areas. The program was completed in 2021. The B Lab companies are linked by their contractual commiments to B Lab Company Inc but are not legally associated with one another.

Santander

Santander are funding the cost of one employee to work on the Climate Task Force project (as described above) from April 2021 to March 2022.

10. Reconciliation of net movement in funds to net cash flow from operating activities

Adjustment for:
Depreciation charges
Decrease/(increase) in debtors
Increase/(decrease) in creditors
Net cash used in operating activities
Net income for the year as per Statement of
Financial Activities		 2022
2021
£
£
(272,225)
(140,932)
5,320
2,038
(626,329)
(127,144)
1,571,600
667,308
678,366
401,270

11. Related Party Transactions

� trustees are employed by companies that pay the normal membership fee to be part of the certification scheme (2021:4). �o Trustees made donations during the �ear ������ �il�

Louise Harman, trustee, is a partner in the firm Bates, Wells, Braithwaite LLP, who were paid £3,270 + VAT for legal advice during 2022 (2021: £687.50 + VAT for registered office and company secretarial services and £869 + VAT for legal advice). This wor� was carried out b� a different team and supervised b� a different partner.

�hris Turner, ��ecutive �irector of B Lab UK, was appointed to the Board of B Lab �ompan� Inc in �ul� ����.

B Lab Company Inc, a US company, charges B Lab (UK) a royalty fee on income from UK certification fees and earned income and also recharges the costs of some global software licences and similar costs. The B Lab companies are linked by their contractual commitments to B Lab Company Inc but are not legally associated with one another.

12. Fundraising

B Lab (UK) undertakes no public fundraising activities. All fundraising activity is undertaken internally and is aimed at funding specific projects. No complaints about fundraising have been received.

B Lab (UK) Financial Statements year ended 31 December 2022

Page 26