B Lab initiates formal investigation into Havas' B Corp status amid Shell controversy

After securing the controversial multi-million dollar media account for Shell in September, there has been significant pressure on B Lab to strip Havas’ B Corp accreditation.

Following a spate of complaints from 26 B Corp agencies in the Clean Creatives community regarding Havas’ work with Shell, B Labs has confirmed it has conducted an initial review of the partnership as part of B Lab’s Public Formal Complaints Process.

In an email excerpt now seen by Campaign, B Lab said it will proceed with a “formal investigation” since it has completed an initial review.

The Paris-based agency currently has four subsidiaries that are certified B Corps—namely London, New York, Lemz and Immerse—meaning they meet the highest verifiable standard of ESG. Havas has been in the process of certifying across the UK.

Campaign understands that the main allegations and concerns to be investigated are:

• Whether the addition of new clients in controversial industries impacts Havas’s compliance with limits on such clients.

• Whether there are indications of possible inaccuracies or misrepresentations in the statements made by the company during the certification process.

• Possible breaches of the B Corp Community core values.

• Additional allegations or issues that arise throughout the investigation process.

“What this signals is that agencies working with fossil fuel companies are no longer getting a pass. It’s not enough for agency leaders to turn out some talking points on ‘helping companies’ transition’ and hope for the best: there is real, consistent scrutiny on polluter marketers, and that will continue to increase,” said Clean Creatives executive director Duncan Meisel in an interview with Campaign Asia-Pacific.

B Lab further says, “The determination does not represent a final judgment, but rather the need for a thorough and formal investigation to confirm whether further action is warranted regarding the company's continued adherence to B Corp certification requirements.”

One client, the Fossil Fuel Non-Proliferation Treaty Initiative which was on a short-term contract with communications arm Red Havas immediately severed ties with the agency as news of the appointment broke.

Possible outcomes

The current investigation B Lab does not mean that Havas’ certification will necessarily stand revoked. Rather, the various possible outcomes of this investigation can be:

• Certification revoked.

• Certification suspension with remediation is required to maintain certification.

• Certification probation with disclosure and remediation required to maintain certification.

• Certification upheld with the disclosure required, no remediation.

• Certification upheld with no further action.

B Lab has not stipulated the exact industries that B Corps cannot work with. That being said, if a company has clients in the fossil fuels, defence, firearms, gambling, hazardous materials, pornography, prisons, or tobacco industries, then their eligibility for certification would be reviewed. Each company is analysed separately to the extent possible, and results may or may not be similar between companies.

Meisel said: "Havas' decision to make its B Corps a part of Shell's misleading marketing is a clear threat to the integrity and brand of the B Corp movement. B Corps should not be producing marketing and PR for the world's biggest polluters, and we are grateful to B Lab for continuing this investigation so that their many members who support serious climate action can be heard."

What triggered B Lab into action

Between September and October, a group of 26 communications and advertising agencies submitted official complaints to B Lab requesting immediate action on B-Corp-certified agencies working with the fossil fuel industry.

It’s noteworthy that even prior to the news of Havas winning Shell’s media account broke, momentum for action from B Lab in this sphere was already building. Good Agency, with support from a few other climate campaigners, challenged B Lab to clarify its stance on granting accreditation to agencies who work with fossil fuel clients.

The requests posed by the co-signers in the complaint letter to B Lab demand:

• Declare and apply the same criteria to B Corp advertising and PR agencies with fossil fuel and high polluter clients as are applied to fossil fuel and high polluting companies themselves.

• Declare and apply the same criteria to parent companies of B Corps.

• Action the steps above immediately.

Meisel added: “Prior to this contract, it looked like Havas was on a track of reducing its involvement with fossil fuel polluters. It’s so disappointing that this one short-sighted decision by Havas’ global leadership put the hard work of so many employees at risk.

“B Corp status is difficult to achieve, and this one client has put it in jeopardy when it could be a building block for an agency that is much more fundamentally aligned with the wellbeing of employees and the planet.”

He continued: “Shell’s marketing is already the subject of substantial backlash, and now Havas is linked to it. Shell campaigns have been banned in different countries, used as evidence in consumer fraud cases elsewhere, and more. Shell is a bad partner to build with.”

B Lab further added: “We are dedicated to addressing this matter in a timely manner. We are also committed to following due process, which means we are not always able to come to a decision when many would like us to. We ask for your patience during this time.”

Campaign reached out to Havas for a statement on the latest developments, the agency did not respond at the time of publication.  

Shell has been moving away from previous commitments

In 2020, Shell pledged net-zero carbon emissions by 2050, but the oil company has repeatedly backtracked throughout 2023. The company's profits for 2022 skyrocketed to an all-time high, reaching $US39.9 billion.

During a June 2023 investor presentation, Shell stated that it is "stepping back from opportunities that do not fit our strategy" or did not produce sufficient returns. Shell was referring to its portfolio of renewable energy.

(This article first appeared on CampaignAsia.com)