With so many new businesses circulating in Canada, it gets tough for investors to decipher the good investments from the risky ones. One question many investors find themselves asking is whether a B-Corp start-up is the right choice for them. While the answer is relative depending on the specifics of the B-Corp, data collected from Yale University suggests that investing in this type of company could lead to good things.
At Sandbox Centre, we work with a variety of business models throughout a myriad of industries. By supporting businesses in their goals to achieve success, we’ve come to learn a lot about good investments, especially those involving B-Corp start-ups. If you’re an investor considering an investment in certified b corporations, here’s what you should know.
What does it mean to be b corp certified?
Before any business can become B Corp Certified they must complete and pass an Impact Assessment. This provides information including the social impact the business has on its community and the world. On average, B Corp Certification is assessed based on six categories, including:
- Impact Business Models per Industry Standards
To even be considered a potential B Corp, businesses must receive a minimum of 80-points out of 200 on the Impact Assessment. Proving to be a socially responsible business is the aim of this assessment.
Business for good
While the concept of financial gain is an important aspect of most business models, B Corp Certification attests to the environmental, social, and legal standards a company has achieved. Being transparent with consumers and investors, caring about the impact they have on the world around them, and helping their communities grow and flourish are all important elements of this.
Being global leaders in a movement supporting the sustainability of the planet’s wellbeing and economy makes these businesses for good. For the good of their customers and humankind.
It might sound too good to be true, but many of these B Corps are thriving. In fact, by becoming environmentally responsible in business, these companies have shown higher revenue than comparable public companies. This was true as far back as the Great Recession, and up into the 2010s.
What does this mean long term? It means upholding these standards of social and environmental performance has impacted more than the environment – they also impact stakeholder investments in a good way. This equates to a lower risk for investors, sustainability in income, and sustainability as a continued credit to the planet.
B Corp Certified companies are increasingly aware of their social impact. To ensure their continued certification, they must adhere to a thorough consideration of all stakeholders, the community they live in, the global economy and environment, the customers they serve, and the employees who work for them.
The social impact B Corp Certified companies have on their communities is vast. Not only do they uplift local economies but they provide meaningful jobs to employees. Those selected for employment are thought to be the best in their fields. Training, vacations, breaks, medical coverage, and other factors that affect the daily lives of employees are generously supplied at a B Corp. Surveys have suggested that this makes for a satisfying workplace and low turnover rate.
B Corp companies often recruit straight out of University and many employees hired are permitted to apply for student loan relief. However, these are just social impacts for employees, there are also massive advantages for communities, such as local outreach, volunteering, donations, and community programs offered by B Corp companies.
Triple bottom line
A triple bottom line framework accounts for three important factors: environmental, financial, and social impact. These are all things possessed by B Corp Certified companies. This triple bottom line is what impresses many investors, but also causes worry regarding the opposition to the business status quo. Fortunately, B Corps have been proven to have three other impactful qualities: low risk, safe investment opportunity, and advanced management.
As a force for good, providing a positive impact, these socially responsible companies meet the highest standards of accountability and transparency for the community and the environment. So, is being a B Corp attractive to investors? We think so.
For more information on B Corp status, or to learn about the local opportunities for business growth offered by us here at Sandbox Centre, and join the Sandbox community on Facebook, LinkedIn and Instagram. Our team is focused on helping our local economy, here in Central Ontario, by supporting the businesses around us achieve their goals. Your success is our success.