FinTech as a force for good is not a new concept. There are FinTechs worldwide that are creating products and services that seek to improve people’s financial lives. But what if your company could positively impact the world beyond products and services? This is exactly what the B Corporation or ‘B Corp’ movement is doing. Haven’t heard of a B Corp before? Well there are over 2,500 Certified B Corporations worldwide that include companies such as Ben and Jerry’s and Patagonia, that are using business as a force for good and balancing purpose and profit.
To get certified as a B Corporation, a company must meet rigorous standards and legally think about the impact it has as a business on its employees, customers, suppliers, community and the environment. By thinking about all their stakeholders, these companies are accelerating a shift to redefine what success in business looks like, beyond pure financial profits.
Financial services may not be the first industry that comes to mind when you think of B Corps, but there are a number of companies that are leading the charge. I was interested to learn more about how this movement has been applied in the financial services sector, and recently got to sit down with three founders that have made the commitment to this movement – Alex Meek, Co-founder and CEO of Newday, an impact investing platform that re-allocates capital flows to good companies, David Reiling, CEO of Sunrise Banks, a community bank based in Minnesota that strives for financial inclusion and Jeff Zhou, Co-Founder and CEO of Fig Loans, that works with non-profits to provide fair loans and help consumers build credit.
So what led you towards getting certified as a B Corp?
Alex: For us, it was important to live, eat, breathe our message and hold ourselves accountable to those (and higher) standards. Joining the B Corp community is an effort to showcase the reason we became certified. It’s about how you treat your suppliers, employees and how you think about your community and environmental stewardship. It’s about going beyond profit. To be a sustainable company you need to be competitive, and the certification is a means to ensure that we are.
David: In 2009 we were certified as a B Corporation because we felt the certification fit us well. It encompasses how we govern, and how we think about community, transparency and the environment. We think of ourselves as an entrepreneurial company first and a bank second. With a B Corporation certification we’re competing against other banks nationally and other businesses worldwide. As part of the certification we need to improve every year and be in the mindset of continuous improvement. And we’re always looking to improve.
Jeff: We took an investment from Village Capital and as part of that assessment they asked us to do a GIIRS assessment, which is part of the B Corp certification process. After we completed the assessment, we found we already met the requirements to be a B Corp. As we were already doing them informally, it was a very natural step for us and the transition was just formalising the practices we had in place.
B Corp Certification has been called a movement to redefine success in business. Do you think there are more obstacles in the financial services sector than in other industries to make these changes?
Alex: There are definitely fewer B Corps in the financial service sector than other industries. The flipside is that we are looking to trail-blaze and showcase that within the financial services industry, you can create positive impact. When we think about our portfolio of companies we have a values alignment construction process. We go across industries and can have an impact in how we invest in those companies. We hope that more financial institutions see the value and consider the model.
David: In the banking and FinTech space there are going to be some barriers in light of regulation of the industry. From a governance aspect, making policies and procedures friendly for all stakeholders is possible, but it’s a choice. I don’t think you need a dramatic mission, but you need to work at it and have the intention. Once you get into that intention, it becomes integrated into who you are. From an overall perspective, there are a lot of businesses that could qualify, but they don’t think of themselves that way.
Jeff: Financial services and B Corps don’t often go in the same sentence in most people’s minds. It’s honestly not more difficult, especially for companies that have a social focus. Being a good company already fulfills many of the requirements! If you’re a good corporate citizen, you’re well on your way to being a B Corp. There are many options for certification, and you can choose the one that is net positive for your company. I think in the long run, this is where business is headed.
And what advice would you have for FinTechs thinking about going down this road?
Alex: Becoming a B Corp goes beyond profit. This new generation of users, clients and investors are looking for ways to be impactful – they want to know a company’s overall mission and how they are thinking about stewardship. It’s a competitive advantage.
David: I would encourage everyone to look into becoming a B Corp. The fundamentals of the B Corp movement are about running a business well. It adds rigor to the way you run a business, helps reduce risks around systemic problems and is a way to communicate how impactful you really are.
Jeff: It’s something that should be pursued almost by default. If you believe you want to be a good company and you care about your customers – the things that most startups say – the B Corp requirements should fall very easily within your day to day and what you do. I think the assessment is eye-opening because it formally highlights many areas of your company management. And for FinTechs specifically, it’s a pretty unique differentiator and good opportunity to stand out.