20 June 2022
Header photo credit: Tom Robotham, Systems Administrator.
Aspect Capital is delighted to have become a certified B Corporation (B Corp), joining a growing movement of over 5,000 companies across 83 countries seeking to harness the power of business for good, and becoming one of the first European alternative investment managers to achieve the certification.
In this article we expand on what B Corp certification means and how it can be obtained, explain why we decided to seek certification and examine some factors others, particularly in the investment management industry, may wish to consider before seeking certification.
Certified B Corporations, or B Corps, are a new kind of business that seek to balance purpose and profit. They are legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment.
B Lab is the non-profit network behind the movement. Founded in 2006, B Lab set-out to create a different kind of economy: a global economy that uses business as a force for good; one where corporations lead the way towards a new, stakeholder-driven model. B Lab became known for certifying B Corporations, a new type of corporation, that are purpose-driven and benefit all stakeholders, not just shareholders.
The B Corp movement has at its heart the concept of “stakeholder capitalism”, with certified B Corps committing to the so-called “triple bottom line” of people, planet and profit, unlike the traditional corporation that gives priority only to financial profitability.
Since its inception in 1997, Aspect has always sought to operate in the interests of a broad group of stakeholders, including our clients, employees and local community, broader society and the environment. In this respect, the overarching principles of the B Corp movement are closely aligned with Aspect’s values and culture.
B Corp accreditation represents independent validation of our efforts to operate in a manner consistent with these values and confirms that we are running our business thoughtfully and sustainably, with due consideration for our employees, suppliers, investors and the planet. Just as importantly, it also provides a roadmap for our future Corporate Social Responsibility (CSR) initiatives, as we strive to remain at the forefront of industry best practice and continue to meet the ever-evolving expectations of our clients and current and future employees, who increasingly expect us to demonstrate our wider impact.
Certification as a B Corp is a rigorous process designed to identify companies that meet high standards of social and environmental performance, accountability, and transparency.
The process starts with completion of the ‘B Impact Assessment’, which comprises of over 220 questions about the business, spanning five ‘impact areas’: Governance, Workers, Community, Environment and Customers. We have included case studies on a number of these areas at the base of this page to illustrate the types of initiative which can contribute to B Corp certification.
Each response in the B Impact Assessment is assigned a score, and companies who achieve a final, verified score above 80 are eligible to become certified B Corps, so this initial assessment is crucial in helping to determine whether a company is already on track to achieve that or, if not, which areas they should focus on.
Thereafter the process is about evaluating and verifying the responses provided, in conjunction with a dedicated B Corp analyst. Companies are required to evidence the answers they have provided to the B Impact Assessment, via documentation, written follow-up questions and/or a final verification interview, with scores being adjusted up and down accordingly.
One particularly important requirement, which will contribute materially to a company’s overall score, is the so-called “legal requirement”, whereby a prospective B Corp is required to enshrine in its constitutional documentation a commitment to remain legally accountable to all of its stakeholders. The precise requirement will vary depending on the legal structure and jurisdiction of a company; for us as a private limited company incorporated in England, this involved a change to our articles of association, requiring the approval of a majority of shareholders.
Once a firm has achieved a verified score of over 80 in the B Impact Assessment, there are a several final background checks before becoming officially certified.
For us, the process took around 18 months from start to finish: we initially completed our impact assessment in January 2021 and received our certification in June 2022. The length of time it took is reflective of the growing popularity of the B Corp movement, with the B Lab team being inundated with applications over recent years. We take this as a positive sign that the movement is gaining traction and recognition, with the number of certified B Corps in the UK alone having grown from less than 400 at the start of 2020 to over 700 today.
The scale of the undertaking for a firm to become a certified B Corp will depend on a number of factors, but in no case should it be taken lightly.
The most significant factor will be the extent to which a company is already operating in accordance with the highest standards of social and environmental performance, accountability, and transparency. In Aspect’s case, we achieved an initial score in excess of 80 in the B Impact Assessment, and this was not subject to material adjustment during the verification process. We did not therefore have to make significant changes to the way the business operates in order to achieve certification. Firms starting from a lower base can expect a more demanding and resource-intensive process, however the beauty of the process is that it allows firms to identify clearly the areas in which there is room for improvement and facilitates specific goal setting and tracking against those objectives.
Another relevant factor to consider is the industry in which a company operates, with the B Impact Assessment being tailored depending on a firm’s industry classification. For an investment manager such as Aspect, the scope for meaningful impact in certain areas will clearly be reduced. There is a significant focus on environmental, social and governance (ESG) integration and related topics such as impact investing as part of the questioning, which may prove more challenging for some in the industry. As a firm, we aim to incorporate ESG factors into our investment decisions where appropriate to do so, and continuously seek to minimise our impact on the financial markets in which we operate; but given the nature of our investment strategies and the asset classes we trade, we found there was somewhat limited scope to score points in these areas as part of the B Impact Assessment, leading to an overall lower score in the “Customer” impact area than in others.
Linked to this, we hope to continue collaborating with B Lab to provide insight into how businesses like ours and the wider finance industry operate, with a view to ensuring that the things our sophisticated, international client base value – such as a repeatable investment process, robust risk management and transparency – are recognised as part of the B Impact Assessment.
The certification process has provided validation that we are already operating the business to high standards from a social, environmental and governance perspective. However, it has also enabled us to identify what we can do better, which we can now focus on improving. Certified B Corps are required to go through a recertification process every three years in order to retain their status, and our ambition is to improve incrementally on our overall score of 83.3 in the B Impact Assessment in three years’ time. There are a number of initiatives already in the pipeline to help achieve this, including implementing local and environmentally-friendly purchasing policies, helping employees to reduce the climate impact of their virtual office spaces, and encouraging more employee volunteering. We aim to act as a standard-setter for industry best-practice, and we hope to be able to spread the message and encourage more firms like ours to follow the B Corp path.
As a certified B Corp, Aspect is now part of a community of likeminded businesses with whom we can engage to share ideas and best practice. We are officialising our long-term commitment to building a sustainable business and B Corp provides us with a framework to ensure we continue to operate the business in accordance with the highest social and environmental standards as these evolve over time. We are proud to be part of the B Corp community and aim to support other members, and prospective members, however possible.
Within the B Impact Assessment framework, “Workers” evaluates a company’s contributions to its employees’ financial security, health & safety, wellness, career development, and engagement & satisfaction.
Aspect regards its employees as its most valuable asset and over the last 24 years has dedicated significant effort to fostering a dynamic, collaborative, meritocratic and inclusive corporate culture, which is at the heart of our talent retention strategy. Indeed, a plethora of initiatives contributed to a strong score in this area, including recognition of Aspect’s equitable compensation policies, high levels of employee participation in equity ownership, generous pension contributions, medical insurance and other benefits, a focus on career development and training, regular employee satisfaction surveys and meaningful flexible working and parental leave policies.
Since the onset of the pandemic, one particular area of focus has been on employees’ mental health. Confidential one-on-one wellbeing sessions are available to all employees via an independent third-party partner who are experts in providing counselling, stress management and mental wellbeing coaching. This supplements other employee health and wellbeing initiatives including an employee assistance programme providing access to counselling and advisory services, in-house pilates classes and mindfulness sessions and subsidised gym membership, among other things.
“Community” evaluates a company’s engagement with and impact on the communities which it operates in, hires from, and sources from. Topics include diversity, equity & inclusion, economic impact, civic engagement, charitable giving, and supply chain management.
Ensuring diversity and equality of opportunity among the workforce remains a key focus for Aspect. We continue to work on our diversity initiatives, led by our internal Diversity, Equity & Inclusion (DEI) committee comprised of employees from around the business. A particular focus remains on increasing the pool of diverse talent within the industry by supporting a number of grassroots initiatives - we currently provide financial or other support to, and/or mentoring/employment opportunities at Aspect via, #10000BlackInterns, SEO, GAIN, Black Girls Code, myGwork and MyBigCareer. Our formal apprenticeship and mentorship schemes, as well as our inclusive hiring practices, were also recognised as part of the B Impact Assessment. In 2021, Aspect was proud to be recognised for its efforts in relation to DEI with two industry awards: the inaugural Eurohedge Diversity Prize and the HFM European Performance Award for Diversity and Inclusion Achievement.
Community also takes account of a company’s philanthropic efforts. Aspect has actively and meaningfully supported charitable causes and not-for-profit groups operating in the UK and around the world since the firm’s inception and continues to do so, with a healthy portion of the firm’s revenue set aside each year for this purpose. Our employee-led Charity Committee leads the firm's fundraising activity. Employees are invited to vote for a Charity of the Year on an annual basis, which provides a focus for the committee’s efforts, however the committee also supports a number of ongoing causes as well as matching employees’ donations to their own selected causes.
This part of the B Impact Assessment evaluates a company’s overall environmental management practices as well as its impact on the air and climate, water, land and biodiversity, both directly and (where applicable) via its supply chain and distribution channels.
Relevant items that are assessed here include the green “credentials” of a firm’s office space and any initiatives to improve this; monitoring of greenhouse gas (GHG) emissions and a firm’s overall carbon intensity; reliance on renewable energy sources; measures in place to improve energy efficiency; and any formal recycling programmes that may be in place.
Aspect firmly believes in respecting the environment and proactively seeks to reduce its environmental impact. We aim to offset all carbon emissions generated by the firm's travel, including the commutes of employees; we also encourage more environmentally-friendly modes of transport via a Cycle-to-Work scheme and a recently-launched electric vehicle scheme, both of which are available to all employees. Each year an overall emissions offsetting budget is calculated, which aims to offset at least 100% of our emissions, and an employee vote is held to decide which projects will be supported via Gold Standard (https://www.goldstandard.org/).
Employees are also encouraged to play their part by recycling, avoiding unnecessary printing or by using our reusable mugs, Chilly bottles, lunch boxes and shopping bags for their daily trips to the local shops. Where we can, Aspect also uses other B Corp products in the office.
Note: Any opinions expressed are subject to change and should not be interpreted as investment advice or a recommendation. Any person making an investment in an Aspect Product must be able to bear the risks involved and should pay particular attention to the risk factors and conflicts of interests sections of each Aspect Product’s offering documents. No assurance can be given that any Aspect Product’s investment objective will be achieved.
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With effect from 1st November 2022, Aspect came into compliance with the U.S. Securities and Exchange Commission’s (SEC’s) new ”Marketing Rule”. This document was created prior to this date (“Old Material”) and therefore may not reflect certain requirements of the Marketing Rule. Please refer to the following website here for important disclaimers and other information required by the Marketing Rule, which are hereby incorporated into the Old Material by reference, to the extent applicable.