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Good business: Inside Australia’s B Corp boom

November 24, 2021
August 25, 2020
This year, we became a certified B Corp, joining over 3,000 purpose-driven companies (around 10% of which can be found in Australia and New Zealand) globally in the process. But what’s driving this shift to business as a force for good? Any why does it matter now?

Once upon a time, the hard work of fixing our environmental and societal ailments fell largely to the non-profit and charity sector. Their work has long been, and will continue to be, essential.

But somewhere along the way, a few individuals began asking themselves: what if we could provide people with products and services that help them in their lives and help solve some of the local and global issues we face at the same time?

Fast forward to 2020, and this simple idea is enjoying more momentum than at any other time in human history.

We have toilet paper that builds toilets, travel companies that help fund seaweed solutions to climate change, and superannuation funds taking out full-page ads in a national newspaper to rally against fossil fuels. Heck, we even have ice cream fighting systemic racism.

Berry Liberman

“I mean, what does everyone think the purpose of business actually is?” says Berry Liberman, Publisher of Dumbo Feather and Co-Founder of Small Giants, an impact investment fund that helps support businesses and individuals striving to create a more equitable and environmentally regenerative world. “Who should it serve? What should it serve? And how can we reimagine it to help us live within the bounds of ecology and towards human flourishing?”

As far as Berry’s concerned, the fastest route to a more regenerative economic system is through our current one. “It’s profoundly challenging work because you’re retrofitting an entire system,” she explains. “But you can’t just reject everything. You have to ask: how do we get from where we are to where we’re going?”

Both Dumbo Feather and Small Giants are certified B Corps, which means they’ve met the highest social and environmental standards (currently) possible for businesses in Australia. There are close to 3,000 certified B Corps operating in the world today, with almost 10% of them located in Australia and New Zealand (a decent clip per-capita, no matter who’s counting).

Purpose-driven business isn’t a new idea, and scores of businesses and social enterprises all over the world have been working hard towards various environmental and social goals for decades. And while there have been other certifications and ethical trading initiatives, none have managed to galvanise the for-purpose business community in the same way that B Corp has. A steep rise in B Corp certifications in recent years – up 58% in Australia and New Zealand and 95% globally since 2018 – is a testament to the organisations work to date.

And we’re proud to be the latest addition to the community, certifying as a B Corp in April 2020.

Fiona Nixon

“For us, it’s validation of the work we’ve been doing for the past decade,” says Fiona Nixon, Head of Strategy and Communications at Bank Australia, who helped lead the B Corp certification project for the bank, which became certified in June this year. “We were doing a lot of great things, but it wasn’t really categorised – we were too busy becoming Bank Australia.”

A lot of great things” includes, among other triumphs, establishing a 927-hectare customer-owned Conservation Reserve, becoming the first Australian bank to run on 100% renewable electricity, committing to not investing funds in industries that cause harm (fossil fuels, live animal export, gambling, arms and tobacco), and dedicating 4% of its after-tax profits to its Impact Fund. Not to mention the scores of environmental and social justice causes it helps support and fund on a daily basis.

We became Australia’s first customer-owned bank in 2011 and only rebranded to Bank Australia in 2015, and the B Corp certification is acknowledgement of the work we have done, but also a roadmap for all the work we have yet to do. “We’ve been on this journey for years, but it never stops,” explains Damien Walsh, Managing Director at Bank Australia. “You have to keep trying to progress the organisation, and the framework that B Corp provides will help us become more robust, and challenge us to be better.”

There’s certainly a precedent for it. Far from being just a badge of honour that businesses apply for and forget about, B Corps must re-certify every three years to ensure they’re still living up to their lofty ethical promises. And as Damien suggests, many of them are actually getting better. Patagonia went from a B Impact score of 107.3 to 151.4 from 2011-2020, while KeepCup went from 83.8 to 107.4 from 2014-2020. All told, 27 B Corps in Australia and New Zealand feature in the top ten percentile globally (meaning they’ve achieved a score of 109 of greater).

Abigail Forsyth

For Abigail Forsyth, Founder and Managing Director of KeepCup, this commitment to purpose and continuous betterment is baked into her businesses DNA. Since its inception in 2007, KeepCup has made a habit of constantly improving its product to achieve the lowest possible carbon footprint – often publicly calling itself out along the way. “Being sustainable and running a responsible business isn’t a one-off decision,” Abigail wrote in 2018. “It’s a really, really long journey… to a place that doesn’t exist yet.”

Two years on, with KeepCup’s plans for global growth temporarily shelved due to COVID-19, Abigail believes the pandemic has provided a unique opportunity for businesses to put community, the environment and purpose first. “I feel like this is the last chance,” she says, in reference to a post-COVID-19 economic recovery. “If we can’t get this right now, when can we? It’s about how we come out of this. That’s the important thing.”

B Corp provides a banner under which organisations can collaborate, share ideas, pool resources and perhaps most importantly, set an example for other businesses to follow. “It’s helped create a movement,” says Abigail. “The challenge now is to rapidly transition every business to become a B Corp. We’re in a club of businesses who are purpose-driven and trying to do good – so how can we make that the new normal?”

The B Corp certification process is as about as arduous as you could imagine, and involves assessment across five key pillars: Governance, Community, Environment, Workers and Customers. It involves months, sometimes years of back and forth, minor changes, major overhauls – from switching to eco-friendly toilet paper in the office to finding and eliminating modern slavery or exploitation in supply chains – and an all-consuming obsession with rooting out unethical practices at every level of the business.

Andrew Davies

As such, “it’s quite a hard product to sell,” laughs Andrew Davies, CEO of B Lab Australia and New Zealand, the organisation that measures and awards the B Corp certification. “But with Bank Australia for example, it had such a clear articulation around its purpose and you had all the senior management buy-in, so even though it was a long process, we were never in doubt of their certification.”

Andrew – who joined B Lab last year – believes a lot of the current momentum can be attributed to the emergence of the B Corp certification, and that the idea of ‘good business’ is contagious. “It’s a self-perpetuating movement in the sense that the more businesses engage in this conversation, the more aware other organisations become of this idea of conscious consumption and the role of business,” he says.

That was certainly the case for the founders of Sydney-based 4 Pines Brewing, who first stumbled across the burgeoning B Corp movement during a trip to the US in the mid-2010s. Now a certified B Corp, the brewery has its very own Sustainability and Social Impact Advisor in Ttobie Arowobusoye, who joined the company in early 2020.

“Beer involves a lot of water, and we use a lot of energy,” says Ttobie, who credits her predecessor, Kiera Guadalupe Murphy, for spearheading the brewery’s B Corp journey before she arrived. “So it’s really important for us to make sure that we’re being as sustainable as possible at every step of the way.”

The environment and sustainability often take centre stage for businesses striving to be better, but the good thing about B Corp certification is that it covers so much more than just the environment. “In terms of gender diversity, inclusion and belonging – that’s also really intrinsic,” says Ttobie. “I think that gets forgotten about quite often – that we’re not just striving to be environmentally friendly. For me, it’s just as important to have those stories about the good things we’re doing for our community as it is to have the stories about the environment.”

For any company to succeed, purpose-driven or not, it needs to be turning a profit. And while many B Corp members are unlikely to bring up the subject of their own accord, research indicates that consumers are increasingly interested in aligning themselves with brands and organisations that are actively doing good in the world.

One study by the Harvard Business Review found a 50% growth from 2013-18 in ‘sustainability-marketed’ products, while a 2019 study by Nielsen found that 81% of respondents “felt strongly that companies should help improve the environment.”

“We’re noticing that more people really do want to buy into doing good, and not just say they’re doing good,” says Ttobie. “I’m not sure how this is being reflected in our sales, but people do notice and get in touch to find out more. Ethical consumers are a passionate bunch.”

It’s hard to imagine a world in which this purpose-driven momentum wanes. If the COVID-19 pandemic – during which our connection, community and access to the natural environment have never been more compromised – has taught us anything, it’s that life is better when all of those things are in the middle of it.

“Determining what you are for is quite thrilling and wonderful,” says Berry Liberman. “If we really want to get to this beloved future vision of regeneration, we need to ask: what serves life? For me, I love beauty. I love joy. And I prefer to live with those drivers of joy, fun and hope. And I need to be living in service of what I am for, not what I’m against.”

Find out more about our B Corp certification

Find out more