People, Planet and Profit – Obtaining B Corp Certification

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.

What is a B Corp?

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.

Why did Aspect seek to become certified?

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.

What does the certification process involve?

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.

What factors might other investment managers wish to consider before applying?

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.

Looking forward

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.