Business for good – the B Corp movement

I’d hazard a guess that the vast majority of businesses and organisations in Australia want to do the right thing – by their employees, their clients, their community and their planet. They firmly believe they are ethical in their business and social dealings.

However, the Governance Institute of Australia’s Annual Ethics Index finds a disconnect between what consumers want (highly ethical behaviour) and what they think they are receiving (improving but still below average ethical performance). Fire services, ambulances and charities rate highest in ethical service and politicians, corporates and banking rank low. Real estate firms rank lowest.

One of the reasons this performance hasn’t budged much is that until 2007 there was no international benchmark for what was an ethical business. B Corp changed all that.

The Certified B Corporation Movement was started in the US by two individuals, Jay Coen Gilbert and Bart Houlahan, who had co-founded AND1, a basketball footwear and clothing company.

AND1 was ahead of its time offering parental leave benefits, shared ownership of the company, 5% of profit donated back to charity each year, and audits of overseas suppliers to ensure worker health and safety. In line with their Silicon Valley cousins, they offered perks such as on-site basketball courts and free yoga classes.

But when they sold their company in 2005 they were devastated to learn that all of these benefits were stripped away by the new owners. They decided, along with a friend from a private equity firm, Andrew Kassoy, to start a global movement that would use business for good and build-in ethical legacy structures that persist after sales and mergers.

B Corp’s growth has been explosive – from less than a 100 in 2007 there were8,254 certified B Corporationsacross 162 industries in 96 countries in February this year with 650 in Australia and New Zealand.

Why do you become a B Corp?

The majority of B Corp businesses I have spoken to were practising ethical business behaviour long before they decided to apply for certification. They offered flexible working conditions and other benefits to their staff, supported their local community, chose suppliers based on social and environmental credentials and sought out customers that shared their ethos.

For them, being a B Corp provides a third party independent endorsement of what they are doing right which is just as important as an ISO standard or an industry award. It is no longer up to you to prove that you are doing the right thing by your employees, customers and community – it is an internationally recognised qualification that is irrefutable. In this new era of increased ESG (environmental, social and governance) reporting by Boards, a B Corp provides a disciplined framework for good behaviour.