The place for

The campaigning company

Johanna Scott
The campaigning company

It is not unusual for major companies – particularly publicly listed companies – to skirt around the big issues.

Public commentary on topics of social concern is often viewed as risky behaviour by corporate communications managers, who prefer a tight reign of control to outspoken leadership.

Not so for Australian Ethical, a company that regularly campaigns government, the public and in some cases entire industries for behaviour and policy change.

And the world should expect no less from its business leaders, says Managing Director Phillip Vernon.

“Our view is that the corporate sector is the dominant force on the planet. Some companies are far greater in size than some countries. Collectively, they (the corporate sector) are arguably more influential than the political sector and this is only going to grow,” said Vernon. “The solution is to fix the system, for business leaders to recognise their responsibility to the planet and to be accountable to the influence they have on the planet.”

“At Australian Ethical we take a stance on the things we believe in,” he said. “We engage with companies to improve their own behaviour, and regularly take public positions on issues, as well as lobbying the government.”

Need an example?

The company recently urged banks to be more transparent about their role in climate change, and to set reduction targets. They also gathered 800 signatures on a petition, urging government to take action under the Paris Climate Change agreement.

“We’re quite active and vocal about the causes we believe in,” said Vernon.

Profit and purpose

At Purpose 2016, Vernon will join a panel of speakers on this very topic, including representatives from advocacy organisation, GetUp!, and Lush, the soap company that famously declares on its homepage: “We are, and always have been, a campaigning company.”

Vernon is adamant that operating in this way is not a compromise, but advantageous for business.

“We believe (balancing purpose and profit) is not a difficult thing to do at all,” he said. “The core of our message is that the two can co-exist in harmony. It’s a myth to think that there should be a compromise. Our track record of 20 years across all asset classes proves that the two can co-exist in harmony.”

Operating for 30 years with around 40 staff, the publicly listed company currently has $1.7 billion of assets under management.

According to Vernon, the company performs at consistently high levels across all their measures of success, including investment performance (has been a consistent top performer over many years), share price performance (36% increase in the past twelve months), profit ($3 million after tax for FY16), and net inflows (78%in FY16). The company is ranked at the higher end of the industry standard for people engagement, while its net promoter score (the bench mark for customer satisfaction) sits at 55.

“That’s extremely high for a financial services company,” said Vernon. “Many are actually in the negative.”

The new norm

So why aren’t more companies operating this way?

Vernon believes it comes down to rhetoric, with many business people following a false conviction that doing good comes at a cost.

Australian Ethical’s response? Simply show that it’s not only possible, but profitable.

“It breaks through the myth that it can’t be done. That’s powerful.”

Despite his own company’s progress, Vernon worries about the glacially slow response of the investment sector to the most pressing issues of the wider world.

“Climate change is a risk they (business leaders) can’t ignore. If (investment managers) are not taking it into account, they are in breach of their fiduciary duty. They are not properly assessing risk.”

And this is just the beginning.

“In order to solve the climate change problem, the consideration of risk is necessary but not sufficient. We won’t get there with that alone. Directors need to positively act to change their business so it’s not causing climate change – they can’t only protect against it. We need bolder action from business leaders.”

Going to work at a purpose-driven business

The fact that ethics form the bedrock of all decision-making and practices at Australian Ethical is hugely motivating for Vernon, who says that working in a purpose-driven business gets him out of bed in the morning.

“We are still very business oriented, and we have drive and achievement; but there’s no compartmentalisation. At any time you can focus on the core issues.”


Level 2 / 5 Queen St
Chippendale 2008
NSW, Australia

Get all the Purpose news, delivered right to your inbox.