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Why advice businesses are becoming ‘B Corps’

Why advice businesses are becoming ‘B Corps’
(Emma Pollard/Pexels)

Some advice companies are considering not only the social and environmental impact of their clients’ investments, but of themselves, by certifying as ‘B Corporations’.

In addition to well-known consumer brands such as Evian and The Body Shop, financial advice companies can be found among the 4,700-plus companies that have certified as B Corps worldwide.

Such companies are certified by B Lab, a global non-profit organisation, and incorporate certain standards of social and environmental performance, transparency and accountability into their daily activities through changing their articles of association.

At online mortgage broker Habito, for example, its certification as a B Corp has seen the business incorporate changes into everyday activities such as diversity and inclusion, energy use, fair pay and recycling, according to Habito’s chief impact officer, Garreth Griffith.

“We’re driving a positive change beyond our company, for our customers and out into the world and created ‘impact business models’ to support this work.

“On a day-to-day basis, we want to tackle the following four areas: making homes more sustainable, improving financial literacy among UK customers, helping new movers feel at home faster and developing our partnerships and campaigns with the aim of reducing homelessness.”

B Lab is not a statutory or chartered body like the Financial Conduct Authority or the Chartered Insurance Institute, but originated from a concept developed by three business people to make business a force for good, with a shift from shareholder to stakeholder-driven models.

But what does it mean to subscribe to B Lab’s certification process and why are some companies signing up for it? What impact is it having on financial advice businesses?

Steven Pyne, managing partner at Holden & Partners, which has been a certified B Corp since 2020

“Part of our reason for becoming B Corp certified was that we were seeing the language of sustainability itself becoming something of a marketing gimmick,” says Steven Pyne, managing partner at Holden & Partners, which specialises in ethical and sustainable investing. “External validation of our approach is important to us, so that our clients can have faith in our credentials.

“It is our 20-year anniversary next year, and Holden & Partners have been promoting sustainable and ethical investment since we started. At the outset it wasn’t fashionable at all and there were not many options available for people.

“Now of course ESG investing is becoming mainstream, which is a hugely positive thing. But with that comes the danger that companies are greenwashing and using sustainable language to sell products and services without proper scrutiny.

“We were looking for an external accreditation to sit alongside our Chartered status, and the B Corp mission mirrors our own. For us it was more about having increased credibility and validation of our pedigree in this area.”

First Wealth managing director, Anthony Villis

 

 

But ESG investing is not a prerequisite to B Corp certification, says Anthony Villis, managing director at First Wealth, which certified in 2020.