It can take up to 18 months to move through the B Corp process, but that’s because there’s such hot demand to be certified, and it’s pushing the resources of B Lab Australia & Aotearoa New Zealand to its limits.
The global office of B Lab says that since 2020 it received more than 6,000 applications from companies looking to join the community of 6,000 B Corps.
B Lab Australia & Aotearoa New Zealand runs the local network. It’s a not-for-profit organisation that manages the certification program. And one of the latest companies to be certified was cancer detection company Volpara Health.
Volpara Health was founded in New Zealand, it now has a global footprint, and it’s listed on the ASX.
Volpara includes impact investors on its share registry. In the past we’ve spoken about the challenges of managing impact in listed markets, and B Corp certification is a powerful model for companies to verify and demonstrate their impact credentials.
Of the 6,000 plus B Corps globally, Australian companies that are B Corps, 8 of them are listed on the ASX, and other global stock exchanges.
They include:
- Australian Ethical (SX: AEF)
- Synlait Milk Limited (ASX: SM1)
- Sezzle (ASX: SZL) US company that has been public in Australia since 2019
- Kelly+Partners (ASX:KPG)
- Liberty Financial (ASX: LFG)
- Kathmandu (ASX:KMD / NZX)
- Biome Australia LTD (ASX: BIO)
- Volpara Health Technologies Ltd (ASX: VHT)
Being a listed company brings a range of regulatory and reporting requirements. We spoke to Teri Thomas, CEO of Volpara, about the drivers behind their seeking the certification, as well as the challenges and benefits.
We also spoke to Craig Hadfield, Volpara’s CFO, about the process and what they learned.
Why do you want to be a B Corp?
For Teri Thomas pursuing B Corp certification was always a good fit for Volpara. The company’s mission is to ‘save families from cancer’. Its software systems and diagnostic treatments aim to identify cancer early, and maximise the chances for effective treatment.
The core of their business is committed to social impact, and they felt B Corp was a way to verify that.
“It’s the right thing to do.” Teri says. “Volpara has always aimed to be an ethical, responsible company. B Corp is validation of who we are, it is part of our top to bottom DNA.”
The process itself isn’t simply a box-ticking exercise. In most cases it involves considerable re-engineering of business processes, and new ways of thinking about who you serve and how the business impacts the world.
“It gives us independent and objective validation that what we are doing is good, and that helps us stand out from the crowd. I think it’s important that people know that part of the B Corp process involves having to change your company constitution. A shift towards not just taking into account shareholders, but also taking into account employees and other stakeholders in and around your business when making business decisions.” Craig says.
“We’ve always done that. But now it’s mandated as part of our Constitution, so it just gives it a lot more credibility.”
The process saw Volpara formalise its living commitments, which stipulate they will always pay a living wage to staff, wherever they’re located.
Same goes for procurement. The company will always prefer buying from ‘ethical’ companies, whether that be coffee beans or computers.
It’s what you do, as much as how you do it
The common misconception is that B Corp focussed on a company’s physical environmental footprint, and while that is certainly important, the process also delves into social impact, and the outcomes it produces.
“B Corp was rigorous, you can’t pretend to be a B Corp. I think there’s a lot of other companies pretending that they’ve got some sort of ESG twist. But B Corp makes you go through the process and prove that your company has some good to it.” Craig says.
“There’s questions early on about environmental impact, but there’s also very clear social questions that steer you down a different path. It digs into the WHO list of global diseases, whichever are relevant, and asks questions about the severity of the disease your product is helping.”
Volpara is a software company, and so has a relatively light environmental footprint, but they still took the opportunity to explore how they can improve.
“We’re a software company, so the most carbon we produce as a business is really flights and transport. And some of the power we use to power computers and cloud computing on Microsoft Azzure.” Craig says.
“Even there we could lean on our providers like Microsoft, who have committed to not only becoming carbon zero, but actually regenerating all the carbon that they’ve used since the existence of Microsoft by 2050.”
B Corp for Listed Companies
Listed companies face a range of onerous requirements for governance and reporting, and it would be easy to avoid the additional work of managing B Corp requirements.
While there are challenges, there’s nothing stopping listed companies from becoming B Corps, and there’s at least 9 companies, listed on the ASX, that are certified.
The team at Volpara were up for the challenge, and they recognised that the company was already aligned with the social mission of B Corp, and that receiving third-party validation would help them deal with the looming ESG disclosure rules that were likely on the way.
“We’ve always been quite progressive on the accounting front to get ahead. So when the accounting standards are required, we’ve already been doing them for a year or two, and it’s nothing new. We already report inline with the TCFD, which is carbon credit reporting.” Craig says.
“A lot of the B Corp process has prepared us for any rules that might come about reporting on ESG issues, so we feel we’re already halfway there.”
Stakeholder Response to B Corp
Listed companies have a more dispersed shareholder base than a private company, and this can make managing impact priorities difficult as their base of investors likely has quite different intentions behind their allocation.
For Volpara, the decision to being a B Corp seems to have been warmly welcomed by a small sample of their investors.
“We’ve received lots of positive feedback.” Teri says. “Some impact investors reached out and saying that they find it really interesting, and that it’s a great accomplishment. I got a couple messages from customers saying, ‘Hey, we’re proud to be customers. We’re proud that our vendor does this.’”
“Plus lots of positive feedback from our employees.”
“Also interestingly, some individual investors commented they’re happy to be invested in a company that is ethical and good for the environment, and that it makes them feel better about their holding, and more positive about keeping it. That they’ll weather the storm when they know that it’s being used for good.” Teri says.