One of the most significant recent trends is the desire of consumers and investors to achieve social good with their money. Companies such as Toms, who give away a pair of shoes to the disadvantaged for every pair of shoes purchased, have found that the strong resonance of their message has resulted in phenomenal growth and unheard-of customer advocacy.
Here in Australia, social enterprise Thankyou, which sells Thankyou Water and a range of other consumer products, now outsells many of its global competitors as a result of its engaging model.
However, as the desire to shop and invest in line with personal values increases, there is a temptation for companies to “greenwash”, investing their energies into making their operations look good rather than actually doing good. How do you know if a company is living up to its marketing promise?
B Corp Certification
Fast-growth Melbourne-based company KeepCup recently experienced this exact challenge. Wanting to expand in the US, it had a pivotal meeting with retail giant Whole Foods. The discussion went well, but the famously values driven Whole Foods wanted to know if KeepCup was genuinely committed to the same ideals. This question was easy to answer because KeepCup is a B Corporation, having passed the rigorous assessment process to be certified by non-profit B Lab, providing a credible third-party validation that their ethical credentials are real.
In a recent interview, executive director of Global Partners at B Lab, Alicia Darvall, explains that Certified B Corps are companies with ambition beyond profit, steered by entrepreneurial vision to use business for good. The certification separates “good companies” from good marketing. This worldwide certification is now available in Australia, with hundreds of companies choosing to certify, not only as a signal to stakeholders of a genuine commitment to a purpose, but also as a business improvement tool. The certification process requires companies to open their internal business practices to external scrutiny and improvement recommendations.
Each business listed in the B Corp directory has a B Impact Report, giving the public a snapshot of how the business rates in areas including environment, community, customers, governance and workers. The B Corp certification is global, so whether you’re taking a philosophy class at The School of Life, buying a Ben and Jerry’s ice cream or a Patagonia backpack, you are assured that they all meet the same consistent standards. B Lab also provide a certified B Corp Shopping List to make it easy for consumers to prioritise spending with those companies which share their values.
Inspire your workplace
Employees want to know their workplace is about more than just profits. When Deloitte surveyed millennials in the workplace in 2016, they found almost nine in 10 (87 per cent) believe that “the success of a business should be measured in terms of more than just its financial performance”.
Using purpose-driven suppliers, such as Who Gives a Crap toilet paper, and service providers like Streat Catering, can boost employee morale, especially in businesses with a high proportion of millennial staff.
Streat chief executive Rebecca Scott recognises that corporates often reach out to support her organisation, and the vulnerable young people they employ, as an effective way to engage their own staff.
Opportunity for impact investors
For purpose-driven investors, the Australian B Corp directory lists a number of impact investment advisors with a focus on opportunities that generate positive social and environmental benefits alongside commercial returns.
B Corps themselves can be an attractive investment opportunity. With mission-focused management at the helm, they’re proving social conscience doesn’t need to come at the cost of profit.
Stakeholders and investors in B Corps view the certification as a sign the business is serious about its mission and has a healthy future to scale.
There are a number of B Corps listed in Australia and overseas, including multinationals Unilever and Danone, technology companies such as Etsy which is listed on NASDAQ, and Silver Chef which is listed on the ASX.