B Corporations: Best in class
B is hardly a mark anyone would go out of their way to have next to their name. But an increasing number of corporations are now changing their practices to become B certified.
It all started with basketball shoes. AND1 were a US basketball shoe and clothing business that dominated the market in the late 1990s and early 2000s. AND1’s brand was about flashy, show-off, ‘streetballing’ basketball. Its mixtapes were full of acrobatic slam-dunks; jaw dropping displays of pure individual talent, and lightning-quick ball handling. Have a look here.
But there was more to this brand. And1’s founders, Jay Coen Gilbert and Bart Houlahan, pioneered socially responsible practices in the 1990s. They paid higher wages to their factory workers in China and donated 10 per cent of their profits to local charities.
In 2006, having sold AND1, Jay and Bart created the Certified B Corporation (also known as B Corporation or B Corp). B Corporations use the power of business to solve social and environmental problems.
And there are now over 1200 B Corporations in 38 countries across 121 industries with one unifying goal: to redefine success in the for-profit world.
To receive certification, B Corporations need to meet strict governance, social and environmental standards. Corporations that provide impact, achieving social or environmental returns as well as financial significantly increase their chances of being certified.
Small Giants was the first Australian company to receive the B Corp stamp. Small Giants invests in a suite of start-up social enterprises, as well as large-scale social and environmental projects and radically sustainable property development.
It has invested in everything from tampon brand Tom Organic, to sustainable housing project Cape Paterson Eco Village. It also partnered with STREAT, a social enterprise we previewed in our first blog.
There are other corporations who cannot meet the strict criteria of B Labs yet, but are creating momentum and activity in the impact investment space.
NAB has recently joined in. It recently stated, “We believe we have a responsibility to deliver holistic and innovative financial solutions that help our customers address social and environmental problems through impact investment. “
On March 10, NAB opened its new Impact Investment Readiness Fund. This is a $1 million fund established to provide mission-driven organisations with targeted advice and support to help them secure investment for scaling up their social or environmental impact.
This adds to commitments and activity from other banks such as Westpac, Bendigo and Adelaide Bank.
Super funds are also entering the impact investment space. They are increasingly offering funds to members, which achieve impact as well as financial return for retirement savings.
Good Super is Australia’s first impact investment superfund. Since launching in 2014, it has already attracted thousands of members and is looking to build the fund to more than $16 billion. It is not alone, Christian Super and Local Government Super are also becoming active in the impact investment market.
The value of a B
As public awareness grows around the B Corporation stamp it is likely that it will become valuable for many corporations. Taking into account the interests of all stakeholders, not just shareholders, provides real market differentiation.
Learn more about impact investment from world leading impact investor John Simon, Founder of Total Impact Capital, at our upcoming breakfast being hosted by Qantas.