The B Corp revolution is here
As consumers demand more from companies, many organisations are seeking to have a positive impact on their clients, their staff and society as a whole, and are discovering B Corp accreditation.
“Nothing is more powerful than an idea whose time has come.”
- Victor Hugo
The game has changed. The concept of consumer status being influenced by sustainability is creating a growing segment that has money to spend. Consumers, particularly millennials, are increasingly demanding that organisations consider their impact on the world and the environment in their activities and products.
Corporate social responsibility has become laser-focused in recent years as consumers and employees hold more organisations accountable for their impact. People are increasingly making buying decisions based on whether a company mission and purpose align with their values and concerns.
As the world changes, businesses must adapt. B Corps will increasingly grow in visibility and power as a commercial model that's better aligned with the realities of both today and tomorrow.
Shifting social priorities
Everywhere you look, there are visible signs that our society is changing. Banks and Superannuation funds are refusing to invest in coal. Single-use plastic bags and straws are being banned by councils, state governments and companies. There are new products that were once catered to fringe groups that are now mainstream. While many companies are promoting their social responsibility as a badge of honour in their advertisements.
And consumers are responding. There is a push to consider the environment in all of our buying decisions. Whether it’s using a reusable cup when you get your coffee, buying a wooden toothbrush or installing solar panels, the broader impact on the environment is now at the forefront of many people’s minds.
There is increasing societal pressure in Australia and other western countries to reduce your impact. These changes are starting to hit businesses, as advocacy groups for a range of issues pressure companies to change their ways and influence their buying decisions. 72% of consumers say companies behaving more sustainability has become more important to them since the start of the coronavirus pandemic (Global Web Index July 2020).
While it seems that this change has happened quickly, it has been underway for a long time. Environmental awareness has increasingly become part of the conversation, influenced by many environmental events such as the increasing cycle of Australian bushfires. Images of black and red skies and people huddled together on the pier waiting for the Navy have us stop and take a breath.
Meanwhile, the pandemic has interrupted our lives and forced us to think about what we want. All the spare time also allowed people to watch a lot of David Attenborough documentaries and question whether our lifestyles could be more sustainable.
The ice caps are melting, the oceans are filling with plastic, the temperature and the seas are rising. The environment is in trouble. We are faced with a climate crisis. The benefit and challenge of capitalism is its constant need for growth. We have a growing population that inherently needs more food and resources. Things need to change. And an important part of that change is in the business community.
B Corps are leading the way
A growing number of companies are becoming B Corp certified. B Corps (or Benefit Corporations) make a commitment to seek to balance profit and purpose. They undergo a thorough auditing process (B Impact Assessment) to identify if they meet a range of high standards and verify that they are balancing profit and purpose.
Is the organisation meeting its social and environmental objectives? What policies does it have to support the team and ensure the organisation has inclusiveness? Is there pay parity between the genders? How are new parents supported? Does the company reduce its carbon footprint and its plastic footprint? These questions and more provide a score that allows a company to understand its positive impact.
The external verification process forces an organisation to carefully examine every aspect of its social and environmental performance, public transparency, and legal accountability to balance profit and purposes. It’s an extensive process to undergo, but having that external verification that you are meeting a set of standards provides legitimacy to your claim and identifies your organisation as a serious and committed agent for change.
It also provides a standard to strive for that pushes an organisation to have a positive impact and creates a like minded-group of companies that become your peers and possibly your suppliers or customers. The community aspect of B Corps encourages cooperation with and support of each other.
Why companies have to be part of the solution
Is it companies’ responsibility to solve environmental and societal issues? Isn’t this the role of governments, you might ask? It is, though the problem has become too great. Governments haven’t been able to create equal pay for all genders, clean the oceans of plastic, cease coal-based electricity or make our businesses sustainable. Society’s most challenging problems cannot be solved by the government and the non-profit sector alone. The corporate sector needs to be part of the solution.
The challenge with capitalism is that it focuses on profit at any cost, leaving governments to deal with the impact. Governments then implement regulations to attempt to find the balance and hold companies to account. Often these regulations are too late or fall short of what is needed to restore the balance. And the never-ending need for companies to grow pushes them to seek other ways to keep shareholders happy. Better, faster, cheaper. These principles focus on consumers and result in higher profits. However, they have led to disastrous implications for the environment. From fast fashion to plastic oceans. Many organisations are looking for an alternative.
Humans aspire to feel good about themselves and their lives. For a growing number of people, their aspiration is to have a low or lower impact on their environment than in the past. This presents an opportunity for organisations on a mission to reduce their impact on the planet to access an audience that is already aligned with this worldview.
The Luminary experience
Luminary became a B Corp on its 22nd founding anniversary, the 4th of March 2021. Having a positive social impact was not a huge focus of society when the agency started in 1999. Things have changed a lot since then.
Employees and consumers are now seeking out organisations that have set a higher bar for themselves in terms of their impact upon society and the environment. Attracting like-minded employees and clients means you need to be responsible for how you operate and make a tangible difference in the community. By becoming a B Corp, Luminary changed its purpose in its constitution to have ‘an overall positive impact on society and the environment’. This is a significant change. Imagine if all companies made this change. It would mean that we would need to focus on the impacts of all of our decisions.
For us, being a B Corp makes a statement. It says Luminary is purpose-driven (to make digital bright and the human experience brighter) and it says something about who we are. Every decision we make does. We are going to have an impact, so we may as well make it positive. Being certified as a B Corp sends a message to prospective clients and team members that Luminary has committed to putting transparency, sustainability and social responsibility at the forefront of our business decisions.
It is unclear if Luminary becoming a B Corp will attract new customers or have an impact on the bottom line. That was not the aim of becoming a B Corp. Luminary believes that as an idea, it's one of the best chances we have at finding the balance we’re striving for. Our team wants us to consider social and environmental impacts in all of our decisions. Enshrining this in our constitution ensures that these factors will be considered in every decision. This does not mean that every decision will be green. Right now, Luminary does not have renewable energy in all of its offices due to building-wide energy contracts. To compensate, Luminary plants trees as part of its carbon-neutral program.
A change for the better
Positive change is not just limited to B Corps. There are a growing number of businesses that are seeking to have a positive impact on people and the planet. Many Australian Builders, like Kapitol Group, have signed up to Builders Declare (https://au.buildersdeclare.com/), which is a Climate Emergency campaign designed to set a building standard that reduces the impact of the industry.
Some organisations are pledging one percent of their equity, time, product and profit under the Pledge 1% program. Many organisations are becoming carbon neutral, while most contribute to charities through discounted/free products, sponsorships, staff time or direct donations.
Companies are also responding by creating products with sustainability or eco credentials and adopting more sustainable practices, for example:
- making clothes, shoes and bags from recycled plastics
- going carbon neutral by offsetting emissions
- sharing the full details of their supply chains
- using toilet paper made from recycled office paper or bamboo
- using mobile phone companies that plant trees for you
- changing fleet cars to electric
- investing in renewable energy rather than coal
- offsetting flights, and
- reducing plastic packaging.
All these positive developments reflect the corporate sector’s response to changing social expectations, priorities and desires. And the consumer demand for these sorts of sustainable and responsible initiatives will continue to grow.
B Corp is an idea whose time has come. WIth unprecedented social changes towards a more sustainable, inclusive and positive future, companies must already consider the social and environmental impacts of their decisions. Certified B Corps are accelerating a commercial culture shift that redefines success away from just profits and seeks to find a balance between profit and purpose. This exciting shift means that decisions that are good for people and good for the planet are ultimately good for business. And that’s a future we can all look forward to.
Consider becoming a B Corp
If your business is interested in becoming a B Corp, Luminary can help. We will share our knowledge and experience of the certification process. You can find out about the certification process here https://bcorporation.net/certification
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