No individual person, country or organisation can solve the myriad of challenges facing societies. Collaboration is critical – and businesses can, and should, be at the forefront, using their business to positively impact their stakeholders and the environment.
There is a global community of companies that believe in the power of business to help solve some of the world’s most pressing challenges. These companies are Certified B Corporations, committed to meeting the highest standards of verified social and environmental performance, public transparency and legal accountability to balance profit and purpose.
There are countless studies that show the value people place on companies that focus on the triple bottom line – social, environmental, and financial impact – especially as we move to a post-COVID world. In fact, from February-late March when financial markets were hit hard due to COVID, companies that were seemingly more socially and environmentally responsible had “less-negative stock returns than their competitors”, according to data from a Harvard Business Review study.
Larry Fink, CEO of BlackRock, has been an outspoken advocate for this. He continues to stress the importance of social and environmental sustainability in his annual letters to shareholders, CEOs and customers. In his 2020 letter to clients he noted, “We believe that sustainability should be our new standard for investing.” In this letter, as well as in his letter to shareholders and his letter to CEOs, he argued that “climate risk will impact both our physical world and the global system that finances economic growth.”
Profit with purpose: the two go hand-in-hand
A recent Harvard Business Review article reported, “Companies must move beyond box checking and window dressing. In a world that increasingly judges them on their ESG (Environmental, Social and Governance) performance, they must look to more fundamental drivers – particularly strategy – to achieve real results and be rewarded for them … our collective research points to the need for a new management paradigm for corporate leaders – one in which ESG considerations are embedded in both strategy and operations.”
Here’s the good news – Certified B Corporations are doing just that.
Certified B Corporations (B Corps) are for-profit companies that balance purpose and profit. A B Corp certification shows how a company performs against social, environmental, and governance metrics.
These companies make decisions that have a positive impact across their workers, customers, suppliers, community, and the environment. They are accelerating a “global culture shift to redefine success in business, and build a more inclusive and sustainable economy”.
To become a B Corp, a company is required to undergo a rigorous assessment administered by B Lab, and are held to the highest standard of transparency and accountability. Currently there are over 3500 Certified B Corporations globally, including over 300 in Australia and New Zealand.
The value of being a B Corp
With any certification there is an element of enhancing reputation and brand value. This has become even more prevalent in the age of COVID, where about 60 per cent of all respondents (Millennials and Gen Z) to a recent Deloitte survey said “they plan to buy more products and services from large businesses that have taken care of their workforces and positively affected society during the pandemic.” In fact, Millennials are also reportedly more likely to choose a workplace with a strong commitment to the environment and social responsibility.
However, for companies that want to understand and improve their performance against the triple bottom line, the real value of the certification is the data benchmarking over time, both internally and against industry.
The B Corp assessment forces a company to ask itself tough questions and understand the broader implications of its operations and governance structure, including its supply chain, which might otherwise be inadvertently overlooked. To remain certified, a company must re-take the assessment every three years, meaning it can continue to track its improvement over time.
Time will tell if using business as a force for good is the answer, but we certainly believe it is. Why not try – what do you have to lose?
Todd Wegner is executive officer of Torrens University Australia. He holds an M.B.A. from George Washington University, and a BS in Civil Engineering from Missouri University of Science and Technology in the United States. The Torrens University, Think Education, and Media Design School have been B Corps since 2015 and believe the more companies that adopt the ethos and values of Certified B Corporations, the better. That’s why they’ve partnered with B Lab Australia and New Zealand to create the free short course – Championing Organisational Change – Introduction to B Corps – about what it means to be a B Corp.