“You can become a B Corp without supporting ESG investing, but the framework assesses the way you discuss and educate clients about their investment options, including ESG and impact investing.
“All clients should have the option to invest in a way that best reflects their values and beliefs. The B Corp certification has certainly made us think hard about the way we discuss investments with clients, and we now have an ESG investment option for all clients.”
Matt Pitcher, managing partner at Altor Wealth Management, likewise recalls ESG investing forming part of the B Corp assessment, but that there is no requirement to invest clients’ money ethically if this is not what they want.
“We were impressed to find that the B Corp assessor who worked with us understood the investment world very well,” Pitcher adds.
Louise Harman, partner at Bates Wells, a law firm and certified B Corp since 2015, says that while the certification process principally assesses the impact that a firm achieves as an organisation, there is a risk of misalignment where that impact does not carry through to a firm’s investment strategies.
“A firm considering certification as a B Corp should assess its investment portfolio, and consider whether its investments are achieving the kind of positive impact that it is itself seeking to achieve at an organisational level.
“In some cases, there may be tensions between the impact that the firm is achieving and the impact achieved through its investment strategies, and that firm should consider the enhanced reputational risks that may potentially arise from this misalignment.”
Balancing people, planet and profit
What the B Corp certification process does require, however, is a commitment built into a company’s legal structure to consider its impact on stakeholders.
“As a certified B Corp, we have a legal obligation to consider the impact of our decisions on all our stakeholders, not just our shareholders. This is enshrined in our company’s governing documents,” says Ben Faulkner, communications director at EQ Investors, which recently re-certified as a B Corp for the third time.
A limited company, for example, would need to amend its articles of association to include specific wording, as outlined in part below.
“All B Corps must amend their articles of association, or partnership agreement in our case, which effectively makes it a legal requirement to place people and planet alongside profit, and have a wider purpose beyond creating value for shareholders,” says Pyne at Holden & Partners.
As well as their B Corp status, what unites EQ Investors, Holden & Partners, First Wealth and Altor Wealth Management is that all four companies are chartered financial planners.
Pitcher at Altor says that while regulatory requirements, the standards associated with being a chartered business, and the B Corp assessment have some crossover, he describes the focus of each as very different.