Bank Australia: Hi Andrew! Can you tell us a little about the B Corp/B Lab Australia & New Zealand business? How does it work? What do you do?
Andrew Davies: B Lab is transforming the global economy to benefit all people, communities, and the planet. A leader in economic systems change, our global network creates standards, policies, and tools for business, and we certify companies – known as B Corps – who are leading the way. We’re a little unusual as an organisation in that we’re a not-for-profit, but we're not a charity in the sense that we don't rely on donations and philanthropic support. We’re a trading organisation and what we offer, our core product, is B Corp certification.
How does B Lab Australia & New Zealand fit in with the global team? B Corp based in the US, right?
We're an independent organisation licensed by the global B Lab organisation to look after the Australia and New Zealand region. The global organisation is based in Philadelphia, but there are global partner organisations like us now spread all around the world.
Where do you think the current momentum for purpose-driven business is coming from?
I think we're living in a time where a relatively small number of corporations have more power than plenty of governments. And those global businesses can move around the world, shift capital and engage resources more effectively than plenty of governments.
On the one hand that's terrifying, but on the other, it’s really empowering. Businesses can operate at scale and solve problems. I think there are businesses who now realise that power and are beginning to use it effectively, and in doing so starting to make a real difference and shifting the dial on how we live.
How does the idea of ‘doing good’ in business differ now from how it’s manifested in the past?
I think there’s been an evolution. It used to be that a business would make its money over here, and then maybe run a foundation or we support a charity over there, or run an annual fundraising event.
All of that’s fantastic, and I’m not trying to demean those things, but I think people have realised that while that’s all well and good, the harm that your business might be doing over here with your day-to-day operations completely outweighs the little bit of good you do over there.
I think people have also realised that businesses can have the most significant impact by reducing harm and re-articulating the design of their business around having a positive impact. The scale of that is enormous compared to what you can do with any leftover marginal surpluses.
How is the idea of ethical consumption changing or evolving?
Economists like to think of people as either consumers or workers or investors…but of course, we're actually all of those things. We’re investors through our super funds, we’re consumers through our wallets, we’re workers through our jobs. And people are bringing that ethical approach not just to their consumption, but to the jobs they do, and the things they invest in. Then entrepreneurs are bringing that approach into the businesses they start.
Take Outland Denim, for example – they started that businesses because they saw a problem they wanted to solve. They realised that the for-profit model can be a really effective, empowering and faster-to-scale way to solve that problem. I mean, Outland Denim is such a good example because they've got that perfect blend of creating a brilliant brand – and fashion is all about brand – and the more products they sell; the more work they can do in solving some of those problems. So it’s a very virtuous circle.
Outland Denim, and others like them, are proving that purpose and profit can co-exist simultaneously, right? That it doesn’t need to be just one or the other?
Yeah. I don’t like this idea of a trade-off between purpose and profit. I think that suggests people are sitting at their desk saying: "I'm going to have a purpose day today. I'll put profit to one side." Whereas they're completely connected.
It's just about recognising that people are in business for lots of complex reasons. We need to make a wage or a salary, sure, but we're also looking for fulfilment and happiness and community and those things that you find in your workplace – we're all human. So the idea of sitting and thinking that you have to pick either purpose or profit is just not how real life works.
Whether they become a B Corp or not, how important is it for larger and more traditional institutions, like banks or super funds, to adopt this idea of conscious capitalism?
The short answer is massively important because our system is based on the free movement of capital, and its allocation to specific opportunities. The more that the custodians of that capital are on the same page, the better.
Banks play such a massive role and are such a big chunk of our economy, and they're huge employers and profit generators. I think that comes with a responsibility to articulate yourself to the expectations of your community and customers.
What do you see or hope for the future of purpose-driven businesses, in Australia and beyond?
We are up 38% year-on-year in new users to our impact platform, which is pretty extraordinary – especially in the context of the pandemic. That’s businesses signing up to assess their impact, not necessarily getting certified, but that's our pipeline. I think that tells us we've got legs.
One of the conversations I've had during the pandemic has been whether or not, in an economic crunch, whether or not paying for something like a B Corp certification will be seen as an unnecessary luxury. But the demand we're seeing is telling us that it does remain important.
Businesses are recognising, I think, particularly in a crisis environment, that people are interested in solutions, not products. I think businesses that can articulate themselves around a solution to one or some of the problems we face – whether it’s a connection to the UN’s Sustainable Development Goals or a B Corp certification – customers are clearly becoming more oriented towards that.
This interview has been edited for clarity and length.
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