How governments can work with B Corps to drive global change

A new whitepaper is making the case for governments to extend positive, social and environmental outcomes through procurement by using B Corp certified businesses. 

Government is a critical influence on the economic system and has the opportunity to shape it to produce more positive outcomes through its approach to procurement, says a new report from Sydney-based B Corp Public Sector Network (PSN).

At the heart of the Creating social value through better business report sits the notion that Australian and New Zealand B Corps are well-positioned to help government extend the positive social and environmental outcomes it achieves through procurement. All by recognising a broader range of positive business types. 

It found that Australian and New Zealand businesses, especially small to medium enterprises (SMEs), are at the heart of both countries’ COVID recovery strategy. And while large corporations and governments will certainly survive the economic downturn, it is the SMEs that will struggle the most but also have the biggest impact on how the rest of the economy survives. 

“It is the SMEs that are likely to be the biggest drivers of the creation of a new and better economic reality,” the report said. 

“Their actions, encouraged by their clients and customers, may also spur the larger corporations and governments to act in new and exciting ways to ensure that the economic recovery is sustainable and effective.”

As of October 2020, there were 300 Australian and New Zealand SME’s registered as B Corps,employing over 17,500 employees and with a combined accumulated annual revenue of $4.9 billion.

PSN’s report found a procurement decision has a ripple effect throughout the community. How a business or government purchases, what they purchase, or who they purchase from, can impact vulnerable populations around the world and can ensure that their human rights are preserved.

The report is quick to point out that it’s not only a B Corp certified business that can make a significant impact. While B Lab provides the B Corp certification in the field of supplier certifications for procurement, other Australian organisations also provide certifications. 

B Lab focuses on high impact business while Social Traders focuses on social enterprises (including in the charity and not-for-profit sectors) and Supply Nation focuses on a range of Aboriginal and Torres Strait Islander businesses. 

The paper concludes that as consumer focus moves away from the price of a product or service and more towards its social and environmental impact, global governments have a big role to play in changing the way businesses approach procurement. 

It states that governments can encourage their own departments or large corporations to procure goods or services from B Corps or other social enterprises ahead of procuring from others. They can also create legislation around procurement and produce reports or other papers that measure the impacts on society. 

All would have a positive impact on the world and help with the sustainable economic management which is so often at the core of government thinking.  

Read the full report here.