B Corps or B Corporations in Australia

B Corps are a special group of for-profit entities that prioritise the needs of workers, communities, the planet, and consumers, and take a socially responsible approach to their business. Australia and New Zealand are home to almost 10% of the world’s B Corps. In terms of legal status, B Corporations are not a specific category of entity per se, but even so, the industry has incorporated standards and best practices.

The rise of B Corps first began as a response to concerns for social and environmental issues. The B Corp (short for Benefit) movement comprises for-profit companies that are committed to sustainable and socially responsible practices. The key factors that have contributed to this trend include stakeholder’s increased emphasis on community, the trend towards social responsibility and sustainability in business, policy making, and consumerism, and a desire to develop global solutions to the world’s social challenges.

B Corps in Australia: What are they?

B Corps, or Certified B Corporations, are for-profit companies that balance profit with purpose to benefit people, communities, and the planet. While all B Corps primarily exist to generate profit, each one focuses on social issues. Though priorities vary across global regions, in the Asia and Pacific regions, top company priorities include reducing poverty (62%), and creating decent work and economic growth (59%) for economically disadvantaged people [^1].

To measure whether B Corps are effective at solving these issues, the industry looks at overall performance, business model, the way they operate internally, the kinds of supply chains they use, and the collective actions they take. Having a B Corp status means operating in a socially responsible way. This may mean having to make changes such as updating a company’s constitution and the way it makes decisions. For example, sharing an annual report with the public can increase transparency and accountability. These practices can improve organisational culture and public trust.

Making hiring decisions that improve gender and racial equity creates more fairness and equal access to career advancement, helps employees feel respected and included, and reduces discrimination. These decisions can support economically disadvantaged people by increasing their access to jobs. Introducing HR policies that support staff, such as paid parental leave or caregiver leave can not only attract top talent but will also improve employee’s wellbeing. In addition, being open about supply chain decisions and reviewing existing practices and policies to ensure the company is not harming consumers or the environment can ensure compliance with laws.

Examples of B Corps in Australia

i=Change is a social-impact tech platform for purpose-driven companies committed to the development of women and girls globally. Founder and CEO, Jeremy Meltzer describes his B Corp certification as delivering a meaningful statement of ethics and commitment by “using business as a force of good.” The company has raised over $7.8 million (AUD) to NGOs and impacted over 230,000 women and girls in 14 countries. Customers making purchases can choose which organisation their transaction will benefit and add their own donation. As one of Australia’s most successful B Corps, i=Change supports global initiatives related to mental health, women and girls’ empowerment, refugees, education, infant and maternal health, and more.

Ladies Talk Money is a collaboration between the Australian financial advisor firm Pure Finance and Jessica Brady, a business owner who creates financial courses for women. The company is run by women for women and provides financial resources that support access to information and empowers its customers to learn about and normalise discussions around financial decisions such as property investments and retirement planning. Women-owned businesses are more likely to become B Corps and pay attention to issues of pay equity and financial education. In fact, 67% of women-owned B Corps have conducted a pay equity analysis in their companies [2]. Ladies Talk Money notes that 8 out of 10 women feel uncomfortable talking about money. The B Corp’s purpose is to address the relationship women have with their finances and remove the barriers to achieving financial equality

Australian-based travel agency, Intrepid Travel, operates globally and has earned a B Impact score of 91.2 from B Lab. The company is on a mission to balance profit and purpose and a vision to change the way its travellers see the world. In a survey it recently conducted, it found that 99% of its customers felt their trips enhanced their education and 98% believed it had enhanced their cultural understanding of others. The company is committed to creating sustainable group tours that benefit the communities people visit and the planet.

What is the certification process?

In Australia, B Corps are required to do five things in order to receive their certification. First, they must agree to be transparent on governance, workers, customers, communities, and the environment. Second, they must consider the impact of their decisions on all stakeholders, including the public. Third, they need to achieve a minimum score on their B Impact Assessment. Next, they must agree to recertify every three years by satisfying industry standards each time. Finally, they must complete a questionnaire, substantiate evidence that they meet the guidelines, do an interview, and have their information reviewed by B Corp.

While there are no specific laws in Australia governing B Corps, receiving certification sends a signal that your company is meeting industry standards when it comes to accountability, transparency, and performance. B-certifications are verified by a private company called B Lab, a non-profit organisation. B Lab is responsible for developing standards and governance guidelines for B Corps. To become a certified B Corporation, businesses must meet eligibility requirements, complete a B Impact Assessment, and submit an application to B Lab. B Lab is tasked with conducting these assessments to measure, manage, and improve companies’ positive impact on five key areas:

• Customers
• Communities
• Workers
• Suppliers, and
• The environment.

It reviews potentially negative impacts associated with company practices. It also sets the industry standards for large B Corps that make over $5 Billion in revenue annually. Priority areas for improvement are determined by regional Standards Advisory Groups around the world and the Standards Advisory Council.

Additional Resources

The B-Corp Handbook, Second Edition: How You Can Use Business as a Force for Good, written by Ryan Honeyman and Tiffany Jana. It is considered the global authoritative guide to B Corp certification.

To learn more about B Corp certification, visit the B Corp Lab webpage.