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.”
Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Concern about electric vehicles’ appeal is mounting as some customers show a reluctance to switch
4 min
Auto dealers across many parts of the country say electric vehicles are becoming too hard a sell for buyers worried about the range, reliability and price of these models.
When Paul LaRochelle heard Ford Motor was coming out with an electric pickup truck, the dealer was excited about the prospects for his business.
“We thought we could build a million of them and sell them,” said LaRochelle, a vice president at Sheehy Auto Stores, which sells vehicles from a dozen brands in Virginia, Maryland and Washington, D.C.
The reality has been less positive. On Sheehy’s car lots, LaRochelle says there is a six- to 12-month supply of EVs, compared with a month of gasoline-powered vehicles.
With automakers set to release a barrage of new electric models in the coming years, concerns are mounting among auto retailers about whether the technology will have broader appeal given that many customers are still reluctant to make the switch.
Battery-powered models have been piling up on car lots, dealers say, as EV sales growth has slowed in the U.S. this year. Car companies have been offering a combination of discounts and lower interest-rate deals in an effort to juice demand. But it hasn’t been enough, because buyer reticence extends beyond the price tag, dealers say.
“I’m not hearing the consumer confidence in the technology,” said Mary Rice, dealer principal at Toyota of Greensboro in North Carolina. “People aren’t beating down the door to buy these things, and they all have a different excuse why they aren’t buying one.”
Customers cite concerns about vehicles burning through a battery charge faster in cold weather or not being able to travel as far as they expected on a single charge, dealers say. Potential buyers also worry that chargers aren’t as readily accessible as gas stations or might be broken.
Franchise dealerships fear that the push to roll out new models will inundate them with hard-to-sell vehicles. Research firm S&P Global Mobility said there are 56 EV models for sale in the U.S. this year, and the number is expected to nearly double to 100 next year.
“I start to think, you know maybe we should just all pump the brakes a little bit,” Rice said.
A group of dealers expressed their concerns about the government’s role in pushing electric vehicles in a letter last month to President Biden.
A Toyota Motor spokesman said the majority of dealers have become “increasingly more confident in their ability to sell Toyota EV products.”
At Ford, the company’s electric-vehicle sales are rising, including for its F-150 Lightning pickup, but demand isn’t evenly spread across the country, according to a spokesman.
Dealers say that after selling an EV, they sometimes hear complaints about charging and the vehicles not always meeting their advertised range. In some cases, customers seek to return them to the dealer shortly after buying them.
“We have a steady number of clients that have attempted to or flat out returned their car,” said Sheehy’s LaRochelle.
While EVs remain a small but rapidly expanding part of the new-car market, the pace of growth has slowed this year. Electric-vehicle sales increased 48% in the first 11 months, compared with a 69% jump during the same period in 2022, according to Motor Intelligence. Sales remain concentrated in a few states, with California accounting for the largest chunk, S&P Global Mobility data found.
The cooling growth has raised broader questions in the industry about whether car companies face a temporary hurdle or a longer-term demand challenge. Automakers have invested billions of dollars to bring more EV models to the market, and many analysts and car executives say they remain optimistic that sales will continue to expand.
“Although the rate of growth has slowed recently, EV demand is clearly moving in the right direction,” said General Motors Chief Executive Mary Barra on a recent conference call with analysts. A combination of more affordable model options and better charging infrastructure would help encourage more people to buy electric vehicles, she said.
There are also varying views within the dealer community about how quickly buyers will adopt the technology.In hot spots for electric-vehicle demand, such as Los Angeles, dealers say their battery-powered models are some of their top sellers. Those popular EV markets also tend to have more mature public charging networks.
Selling an electric car or truck outside of those demand centres is proving more difficult.
Longtime EV owner Carmella Roehrig thought she was ready to go full-electric and sold her backup gasoline vehicle. But after the 62-year-old North Carolina resident found herself stranded last year in a rural area of South Carolina, she changed her mind. Roehrig’s Tesla Model S got a flat tire, but none of the stores in the area carried tires for a Tesla. She ended up paying a worker at a nearby shop to drive her home.
Roehrig still has her Tesla but bought a pickup truck for long road trips.
Tesla didn’t respond to a request for comment.
“I have these conversations with people who say we’ll all be in EVs in 15 years. I say: ‘I’m not so sure. I’ve tried to do it,’” Roehrig said. “I think you need a gas backup.”
Customers who want to ditch their gas vehicle for environmental reasons are sometimes hesitant, said Mickey Anderson, president of Baxter Auto Group, which owns dealerships in Kansas, Nebraska and Colorado.
“We’re in the Colorado Springs market. If this is your sole mode of transportation, and you’re in a market in extremes of elevation and temperature, the actual range is very limited,” Anderson said. “It makes it extremely impractical.”
Dealers representing around 4,000 stores across the U.S. signed the letter in November addressed to Biden, saying the administration’s proposed auto-emissions regulations designed to promote electric-vehicle sales are unrealistic. The signatories ranged from stores owned by family businesses to publicly held giants such as AutoNation and Lithia Motors.
“Some customers are in the market for electric vehicles, and we are thrilled to sell them. But the majority of customers are simply not ready to make the change,” the letter said.
Some carmakers are pushing back EV-rollout plans. GM said in mid-October that it would delay the opening of an electric pickup plant by a year to late 2025. In response to weaker-than-expected consumer demand, Ford said in late October that it would defer $12 billion of planned spending on electric-vehicle investment.
Since September, dealers on average took more than two months to sell an EV, compared with 40 days for all vehicles, according to car-shopping website Edmunds.
While discounts have helped boost sales of some electric vehicles, they also have led to repercussions for some current owners because it reduces the value of their vehicles, dealers say.
“Most people don’t have the confidence to buy an EV and know what it will be worth in 10-15 years,” said Rice from the Toyota dealership.
It may take some time for the industry to adjust because it is still in an early stage of switching to electric vehicles, Sheehy’s LaRochelle said.
“We’re asking for this market to grow organically,” he said.
Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
