Both governmental agencies and private organizations award business certifications by conducting a review process that ensures that the business is in compliance with a set of performance standards. Certifications cover all aspects of business operations. Organizations and governmental agencies that certify businesses evaluate the record of compliance to municipal, regional, national and international standards and laws. Depending on the type of business certification, other factors may be considered, too, such as the level of diversity in the business' workforce or ownership; the annual revenues; achievement of environmental benchmarks; compliance with financial and regulatory agencies’ requirements; and acceptable levels of credit worthiness.
At the local level, municipal and regional business certifications often must be awarded before a business is granted a license to operate. Businesses that provide services to vulnerable populations, such as young children or seniors who need physical assistance, often must obtain special business certifications before they are given a license. These licenses are often issued by a government agency. For example, companies that provide medical, dental or financial services are often required to obtain special certifications and licensing before engaging in business.
Many jurisdictions also have certification requirements for businesses that serve food and beverages or sell hazardous chemicals. Local businesses can benefit from certifications that designate a small business. Environmental certification programs have grown in popularity, too. Some municipalities offer incentives to businesses that adopt sustainable business practices.
Some government agencies award business certifications to acknowledge compliance with national laws, such as safe environmental practices. Businesses owned by women or minorities might also be eligible for special status that grants these businesses certain privileges. Government agencies also often award certifications for proof of compliance to environmental standards. One example is the United States Department of Agriculture's BioPreferred Program, which requires the business to be certified by the Environmental Protection Agency.
On the global level, the International Charter conducts a range of business certifications that acknowledge integrity in business activities for the purpose of encouraging best practices. The organization employs core principles when certifying a business. Factors evaluated include a focus on the consumer, the quality of leadership, proof of performance in operations and social and environmental responsibility.
The International Charter's certifications are categorized by size and are extended to qualifying small, medium and large companies. There are additional certifications for large, publicly traded corporations. The International Charter also certifies e-commerce businesses, designating the business as a “Safe to Shop” establishment.