Supply Chain
B Lab Aligns with IDH to Enable More Companies, Workers to Benefit from a Living Wage

This week, B Corp certifier B Lab launched new guidance for companies on implementing a living wage that aligns its approach with that of IDH — The Sustainable Trade Initiative.

Paying a living wage to workers has long been part of B Lab’s standards for B Corp certification. Yet one challenge that emerged over time was how to consistently and credibly assess the limited, but growing, living wage benchmarks for inclusion in the B Impact Assessment — which includes the standards that serve as the foundation for over 5,000 Certified B Corps and more than 200,000 additional companies that use B Lab’s standards as an impact measurement tool outside of certification. The result of this challenge was that fewer companies — and therefore fewer workers — fell under the scope of the living wage questions.

Now, B Lab has aligned with the IDH Living Wage Roadmap and its framework to find living wage benchmarks from quality-assessed methodologies — making it easier for B Lab to increase the number of benchmarks accepted, which in turn means more companies can have their living wage work reflected in the B Impact Assessment.

“At B Lab, we’re constantly seeking ways in which companies can be stronger forces for good. We do this by looking at the latest ideas, tools, and resources that can help us improve the guidance in our B Impact Assessment,” said Bernard Gouw, Senior Manager Social Standards at B Lab. “The IDH Living Wage Roadmap is a game changer. IDH is the first organization to methodically tackle the growing world of living wage benchmarks and present a framework to navigate them.”

The evolving landscape

As Gouw explains in a recent blog post, a “living wage” is not just about people getting more money. It is about creating an inclusive economy where all workers earn a wage that enables them to live with dignity. Around the world, there are populations that experience marginalization at intersections of race, gender, class, disability, education level, language ability, immigration status, and other factors, leading to wage inequality and poverty wages. By paying a living wage — going beyond the legal minimum to provide people with the resources needed to support themselves and their families — companies transform patterns of exclusion and oppression into empowerment.

Developments in the living wage space, including IDH’s work and the introduction of new benchmarks, have prompted B Lab to develop new living wage application guidance. The new guidance:

• Recognizes new living wage benchmarks so that more B Corps and more workers can benefit from a living wage. This includes new benchmarks in the US and Canada, as well as two global benchmark providers.

• Recognizes third-party living wage accreditation to leverage the hard work of others and simplify our verification.

• Takes a closer look at how B Corp applicants are calculating prevailing wages to get a more accurate picture of whether living wages are being paid.

• Includes updated and comprehensive guidance to better support companies on their living wage journey. This guidance is free and accessible to all, even those outside the B Corp community.

Living wage solutions

In addition to the newly launched guidance on implementing a living wage, B Lab also updated its guidance to better support companies on their living wage journey. This guidance is free and accessible to all, even those outside the B Corp community.

“By aligning with IDH’s work and launching our updated guidance, we hope to send a signal that paying a living wage is not only necessary, but also feasible,” Gouw said. “We are entering a new era in which companies have the tools and resources to make much-needed progress on wages. We are grateful for IDH’s work that helps companies and organizations like ours to navigate this new era.”

The IDH Living Wage Roadmap works to strengthen international alignment and build tangible solutions regarding living wages. IDH strongly believes that establishing a consensus on accessing and measuring living wage gaps ensures credibility and sustainability for future living wage efforts. The Roadmap first step enables companies to identify the living wage in the regions of interest. To support companies in this step, IDH has developed a process to recognize living wage benchmark methodologies to meet nine criteria of quality and developed a tool for companies to find the credible living wage benchmarks. Momentum on this front began in 2021, when IDH joined forces with 10 global companies — Aldi Nord, Aldi Sud, Eosta, Fyffes, Fairphone, L’Oréal, Schijvens, Superunie, Taylors of Harrogate and Unilever — all actively working towards ensuring living wages for workers throughout their supply chains, and calling on other companies to do the same.