Aussies Seek Sustainable Shopping: The Rise and Impact of B Corp Certification in Australia
As more businesses sign up for certification, sustainably minded consumers take note
4 min
Shopping never used to be this hard. Once a matter of whether there was enough cash in your wallet or room on your credit card, now consumers are becoming increasingly concerned about the cost of buying something new not just for themselves, but the planet as well. Nearly 60 percent of Australians value sustainability more than they did two years ago, according to a recent survey by market analysts NIQ.
Yet just 37 percent say they could shop sustainably with ease versus
a global average of 50 percent. Bombarded with slogans and social media touting a brand’s “eco- friendly” or sustainable credentials, consumers struggle to cut through the greenwash.
Environmental claims are a powerful marketing tool and in Australia it is illegal for business to make false ones. But for customers or investors looking for certainty, the market has provided it through a growing movement called B Corp.
Companies that meet high sustainability standards can attain B Corp Certification — an internationally-recognised tick of approval. It was introduced by B Lab, a United States non-profit organisation founded in 2006 by three friends wanting to make business a force for good.
Companies have to prove to B Lab they’re making a positive impact on the “quadruple” bottom line: people, planet, profit, purpose.
‘B’ stands for ‘benefit for all’ and the fee-based application process is rigorous.
Unlike Environment, Social and Governance (ESG) reporting frameworks, B Corp measures a company’s entire footprint, from supply chain practices and input materials to employee benefits and governance structures.
Businesses submit detailed evidence to B Lab on these standards and must be scored 80 or above on their B Impact Assessment. Once verified, a company’s score appears on the global B Corp Directory.
They can also use the distinctive B Corp logo — an encircled black B — in marketing.
While B Corps don’t carry any particular legal or government status in Australia, the logo carries weight with consumers.
“Most market research finds
that the most important thing to consumers is a company’s reputation or credentials,” Emma Herd, EY Oceania Partner in Climate Change and Sustainability Services, says.
“B Corp Certification is a
quick and recognised way of demonstrating you are taking voluntary action to address sustainability issues that affect your markets, consumers and banks.”
There are more than 6,000 B Corps globally, including about 470 in Australia and New Zealand.
Big names include Danone and Patagonia.
The latest Australian business to join the ranks is designer furniture and lighting supplier Living Edge.
With showrooms nationwide, the luxury retailer has a 15-year history of sustainable practice, from partnering with eco-friendly brands to using electric vehicles.
Living Edge Sustainability Strategist Guy Walsh says that certification — a “great validation of what we have achieved so far” — has provided pivotal business insights.
“We always believed we had a sustainable portfolio of products but going through the B Corp certification process was the first time we could look at an actual metric,” Walsh says.
“We found in the 2021-22 financial year, 69 percent of our revenue was generated from the sale of products certified to internationally recognised environmental accreditations.
“Another one that I found interesting, and which is so important for creating industry circularity, is that 21 percent of our revenue is coming from recycled materials. This data gives us a clear baseline to improve on.”
Constant improvement lies at the heart of B Corp. Businesses must recertify every three years as standards evolve. Australian firm WOWOWA Architecture, known for its whimsical and sustainable creations, was recently recertified after gaining B Corp status in 2019.
Director Monique Woodward says they “lost some points but gained others and that’s OK.”
She says certification has provided a “road map for growth” and helped the firm attract environmentally- focused clients.
“Our favourite residential family clients come to us because they believe what we believe, then also want a deliciously colourful and wildly textured home,” Woodward says. “Crumpler came to us wanting a fresh but nostalgic look thatspoke to their motto ‘bags that will probably outlast you’. We are now doing all their stores.”
For Woodward, industry and supply chain sustainability can improve if more firms jump on the B Corp bandwagon.
“Moving forward, all projects need to far exceed current regulatory requirements. Award winners
need to push hard and set new benchmarks for zero carbon, no waste, no gas as the bare minimum,” she says.
According to B Lab, B Corps are 4.5 times more likely than other businesses to use 100 percent renewable energy and 7.3 times more likely to be carbon-neutral.
EY Oceania sustainability expert Herd says the pressure is on business to be more sustainable.
“The investment thesis of ESG and sustainability is that a well-managed company on ESG credentials is generally better run and more profitable,” she says.
“We are seeing it’s harder for companies to do nothing on sustainability and ESG. We’re also seeing an increased push from business in Australia to government to provide consensus building around accredited certification schemes. There is a hunger from business to have a benchmark.”
For newly-minted B Corp Living Edge, certification is a gamechanger for business and consumers.
“Now we have got a measure for how sustainable our products are, we can be more targeted when we bring brands to market,” Walsh says.
“Our brand is not about throwaway consumables or fast furniture. We’re building a socially responsible and sustainable business. B Corp Certification is valuable to our customers because it gives them third-party assurance that we’re trying to do the right thing.”
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