Is Your Portfolio Certified to Mitigate Risk and Create Shared Value?

B Corporation Certification Introduction

As consumer demand for socially and environmentally responsible products and companies has increased, consumer trust in corporations has decreased. Now more than ever, businesses are challenged to distinguish themselves based on their social and environmental business practices, and consumers are more likely to trust a company’s claims when backed by consumer reports and third party standards. B Corporation certification provides the independent third-party seal of approval that communicates to customers that the company is good in substance, not just in advertising.

Why Get Your Portfolio Certified?

For funds, portfolio financial and impact performance is a direct reflection of the fund’s values and impact practices.  The B Corporation certification provides robust, comparable, objective, transparent metrics that can be used to evaluate individual company performance, and portfolio performance in the aggregate.

  • Enhanced Insight into Fundamentals and Valuation.  B Corporation metrics are highly intelligent indicators of social and environmental performance, but even moreso, they are leading indicators of financial stability and risk potential.  B Corporation transparency standards give investors deeper insight into fundamentals like employee engagement, supply chain risk, customer satisfaction, and strength of governance.
  • Impact Reporting Tools.  B Corporation metrics are quantified and easily reportable, giving LPs and prospective ventures concrete insight into your impact priorities, performance, and strategy.  Data is easily extracted from the impact assessment for integration into annual reports and ongoing board-level communications.
  • Impact Performance Management.  The B Corporation metrics can be used to encourage and incentivize certain impact behaviors and strategies.  Because B Corporation metrics are concrete and objective, investors can create clear impact mandates for entrepreneurs, and enforce those mandates where necessary.
Moreover, because B Corporations uphold the highest standards of ethical accountability, investors in certified B Corporations will enjoy the following venture-level benefits:
  • Brand Positioning.  The B Corporation certification positions brands as a premium, verified ethical offering for the discerning consumer. Individuals, businesses, and governments are increasingly concerned with the ethical performance of the companies they buy from, and the B Corporation certification provides the differentiation brands need in order to compete in today’s increasingly transparent markets.
  • Worker Retention and Engagement.
  • Stakeholder Engagement and Risk Mitigation.  B Corporation metrics allow investors to easily understand how well-engaged venture stakeholders are, and how much risk creeps up between gaps in stakeholder relationships.
  • Sustainable Growth Framework

The Value of Metrics-Based Impact Performance

Because the impact investing industry focuses on ventures that produce comprehensive triple-bottom-line performance, impact investors benefit from an independent third-party impact ratings system that is objective, comparable, transparent, and rigorous in its assessment of impacts.  GIIRS uses the B Corporation certification metrics to serve as a comprehensive analytics system for impact investors, providing transparent, independent, and verified data.  GIIRS is distinct from the B Corporation certification because the GIIRS rating does not require ventures to become legally accountable to considering stakeholders and pursuing public benefit, but a GIIRS rated company will assess its impacts according to the B Corporation metrics.

GIIRS ratings are available to both funds and ventures.  Funds receive a GIIRS rating based 20% on the fund’s internal impact practices, and 80% on its portfolio companies’ impact practices.  Ventures receiving a GIIRS rating are simply rated according to the B Corporation metrics, with companies earning at least an 80 becoming eligible to earn the B Corporation certification.

GIIRS Services: For Funds

Funds and financing institutions benefit from B Lab’s impact ratings system by gaining objective, comparable, quantified, robust, metrics by which to judge their portfolio’s impact performance.  Those metrics can then be used to communicate portfolio-wide and venture-specific impacts to LPs.  The metrics can also be used to help screen ventures, and can be custom-weighted to serve a particular impact focus.  B Revolution partners with funds to help them solidify their impact philosophy, develop GIIRS-compliant internal metrics, enable portfolio companies to create and measure impacts, and communicate portfolio impacts to LPs.  Our services include:

  • Data Aggregation for Previous Funds’ Impact Performance
  • Development of Target Performance Objectives for Current Fund
  • Development of Impact Screening Practices
  • Authoring of Impact Terms for use in Investment Instruments
  • Integration of Impact Measurement and Risk Mitigation Practices
  • Development of Portfolio Reporting Protocol and Processes
  • Development of Capacity Building Programs for Portfolio Companies