The final steps are to meet the legal requirement for integrating stakeholder consideration into your company’s governance structure and paying the annual fees. The specific governance requirements depend on the type of company you are (e.g., corporation, LLC, S corporation) and your state of domicile. For example, as a privately held corporation registered in Delaware, we had to re-file our charter and elect benefit corporation status within two years of our initial certification. Requirements differ for other types of legal status and states.

Hortz: In what areas are you excelling per your B Corp review and what areas do you need to continue to improve?

Blume: The B Corp certification provides scoring across five different areas—governance, workers, community, environment and customers. Our top scores are in customers and workers. We rate highly in customers because of our focus on and implementation of ESG investing. For all of the investments we consider, we evaluate the security’s performance against strict criteria and perform ongoing monitoring of those investments to help ensure companies remain in line with our environmental, social, and governance expectations. We also actively look for opportunities to invest for positive impact. One example of this is our investment in Benefit Chicago, which is a $100 million impact investment initiative that seeks to finance the growth of impact enterprises throughout the Chicago region in order to build wealth, create jobs, and enhance job readiness in some of the city’s most economically challenged neighborhoods.   

We score highly on workers because of the benefits we offer and the fact that we pay highly competitive wages. We believe providing enhanced benefits to associates helps them provide better services to clients and sets a standard for our local and financial services community. We are also entirely owned by associates who work at the firm and have remained independent since the day we were founded.

An area in which we can improve is tracking more closely and improving upon the energy and other resources we use in our office. We lease our office space and are in a high-rise building in downtown Chicago. We have worked with our landlord to enhance our recycling practices and confirmed the use of non-toxic cleaning supplies. Other steps we could take include reporting on our water and electricity use and implementing practices that would reduce the amount we use. 

Hortz: Do you feel that the process of becoming a B Corp has helped in any way in your socially responsible money management processes and client engagements?

Blume: We had already incorporated socially responsible investing in our money management activities prior to becoming a B Corp and the certification process re-affirmed our commitment to this investing approach. Since certification, we transitioned Appleseed Fund to being a fossil-fuel free fund and we updated our ESG guidelines to make them more reflective of what we believe to be the industry’s latest thinking on the topic. We also more clearly delineated those separate account clients who want to follow a values-based approach rather than only having their investments screened for ESG factors.

Hortz: Why do feel there are still not that many financial services firms that have chosen like you to become a B Corp?

Herrington: Getting and maintaining certification is hard. It requires commitment from owners, senior management and associates and requires people to think differently from how they have done so in the past—namely, to think about more than the profitability of the firm. That mindset has been so ingrained in businesses, and especially in financial services, for so long and inertia is hard to overcome. With the growth in popularity of ESG investing, some traditional investment firms have looked for easy ways to gain credibility in the ESG space, but being certified as a B Corp requires a lot more than simply filling out an application. Becoming a B Corp isn’t a marketing ploy but rather a cultural commitment to doing business with a higher level of integrity.

Blume: Many companies may also have challenges with conflicts of interest across their businesses. As a boutique firm, we are uniquely focused on sustainability and do not have to worry about our actions in one part of the firm negatively impacting another—being a B Corporation is part of a culture across the firm and is deeply embedded in everything we do. Other organizations may not find that to be so easy.