B Corps Reflect the True Cost of Business and Reward Stakeholders
Since the very beginnings of commerce, businesses strived to earn superior financial returns by maximizing revenues and minimizing costs. Revenue generation by satisfying market demand is straightforward for most businesses. However, the cost side of the profit equation is subject to a variety of ever-changing expense factors such as labor, raw materials, facilities, utilities, legal and environmental compliance, and overhead. In the most basic terms, businesses with the highest net incomes and resultant cash flows (total revenue minus total expense) are rewarded by investors with the highest market valuations for their reliability in generating consistent positive operating results. Up until very recently, most businesses viewed their missions to maximize shareholder value rather than stakeholder value.
The “true cost” of doing business considers all stakeholders, not just the company shareholders. Question: what true costs are missing from the profit equation in a maximize shareholder value company strategy?
Answer: the cost of negative impact on society and the environment.
If a company solely pursues maximizing shareholder value, such companies do not fully bear the costs of negative externalities resulting from the production of goods and services such as air pollution, water pollution, noise pollution, excessive carbon dioxide output, unfair or illegal labor practices, and traffic congestion. These costs are often borne disproportionately by society as a whole and not reflected in the underlying cost structure of individual businesses. Government regulatory practices vary widely around the globe in an effort to shift some of these costs back to the offending companies; however, society as a whole has shouldered the majority of the financial, environmental and social burden.
What is the solution for investors? Invest in companies which take all stakeholders into account. Such companies can take many forms but one way to positively screen for companies who care and want to do good is to choose to invest in Certified B Corporations.
Certified B Corporations are a new kind of business that balances purpose and profit. They are legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment. This is a community of leaders, driving a global movement of people using business as a force for good.
Each of us has the opportunity to choose which companies we invest in for a better future for ourselves, family, friends, and people we don’t know or will never meet. B Corporations are required to meet the highest standards with respect to verifiable social and environmental impact, transparency, and accountability. As investors and consumers, we can make positive choices on a daily basis to engage with businesses who share the vision of doing business with a balance of profit and purpose. B Corporations provide a means for everyone to make positive investment and consumption choices that take all stakeholders into consideration.
Ed Tepper is the Chief Operating Officer and Chief Finance Officer at CoPeace. As a forward-thinking holding company, CoPeace is building a portfolio of carefully selected for-profit companies with measurable social and environmental impact. To learn more about impact investing, check out CoPeace’s Intro to Impact Investing.
A Primer on Impact Investing & B Corp Status
Our CFO Hanan Levin said it best in his blog last week: “Impact investing is no longer a trend. It’s a constant.” In fact, we first wrote about this impact investing “trend” almost a full year ago in our blog. February is B Corp Month, so let’s talk about impact investing, B Corporations, and CoPeace!
Impact Investing
Impact investing focuses on using the power of capital to promote the greater good, while achieving a positive financial return. It addresses a broad scope of social and environmental issues through investments in companies with demonstrable solutions to said issues: from increasing access to clean water and energy for underserved populations to establishing equitable labor practices.
Certified B Corporations®
B Corporation – or B Corp, for short – refers to companies that receive certification from the non-profit B-Lab. Certified B Corps seek to create value for all stakeholders (not just shareholders!), through verified performance, public transparency, and legal accountability. CoPeace received full Certified B Corp status in August of 2019, and you can read our B Impact report here.
Impact investing and B Corps together disrupt the traditional model of capitalism, the model that stresses profit-at-all-costs with zero social or environmental considerations. B Corp status provides the framework, while impact investing is the underlying theory. Investing in a B Corp might be considered an impact investment, but not all impact investments must be made into B Corps exclusively. As a Certified B Corp in the impact investing space, CoPeace is following an established and verified framework, while actively working with positive impact companies.
Jacob Miller is a financial analyst at CoPeace. As a forward-thinking holding company, CoPeace is building a portfolio of carefully selected for-profit companies with measurable social and environmental impact. To learn more about impact investing, check out CoPeace’s Intro to Impact Investing.
What’s the Fuss about Impact Investing
If you happened to catch any financial news lately – or your private plane made a quick stop in Davos, Switzerland last week for a ski getaway with a side of economic banter among the world elite during the World Economic Forum – you couldn’t avoid wondering if suddenly everyone woke up one day and said, “Hold up, we should actually care about this planet.” What happened?
When the “old guard” suddenly changes its tune, I like to play the game: Follow the Money.
Altruism aside, what could make a multibillion-dollar money manager wake up one day and choose to drive a Tesla instead of a Rolls Royce? Invest in renewable energy instead of “old faithful” – fossil fuel?
The answer, of course, is money. An investor’s job is to try and see the future, forecast trends and move in before the market has shifted. The trend is clear: impact is no longer a subsection of the economy, it is a theme that will be prevalent in every company in the future and will influence winners and losers in the market.
At CoPeace, we acknowledge that impact investing is no longer a trend. It’s a constant. Instead of focusing on companies that do “less bad” and are trying to squeeze into the impact space, we look for the impact disruptors – the winners of tomorrow in the fight for our planet and the fight for success. Companies founded with the sole purpose of positive impact and sustainable profit.
There are many possibilities. If done thoughtfully, we can have a positive impact with consumer packaging on our precious planet. So let’s consciously decide together to work towards the change.
Hanan Levin is a Senior Investment Advisor at CoPeace. As a forward-thinking holding company, CoPeace is building a portfolio of carefully selected for-profit companies with measurable social and environmental impact. To learn more about impact investing, check out CoPeace’s Intro to Impact Investing.
New Year, New Perspective
It’s hard to believe that 2020 has arrived, and we’ve entered a new decade. As I reflect back on the past year, I am extremely grateful for many things: family, health, friends, coworkers, and countless people in the world working toward a greater good, just to name a few.
I recently stumbled across my “Vision for 2019,” written last January, specific to my goals for CoPeace. My ambitions were lofty and optimistic, my timelines aggressive. I was confident in my vision. As I read through the summary, I was a bit stunned, somewhat frustrated, even slightly disappointed, that only half of my goals were actually achieved.
Then I paused. I reflected back on all the obstacles we had overcome as a team, forging a unique path in the impact investing world. CoPeace is truly a “first-of-its-kind” company, doing something that no one has done before. I reminded myself to truly appreciate what comes along with such an ambitious, pioneering venture – unexpected challenges, difficult decisions, surprise expenses, just to name a few – all of which we tackled with integrity and fortitude.
My perspective is now significantly different: reaching even half of my vision over the past year was a truly remarkable feat. What we’ve accomplished so far is exponentially greater than what I could’ve ever imagined when we founded CoPeace just two short years ago. It’s proven to me that we can all make a positive difference in the world. We can be successful in breaking new ground. We can even “Grow Your Money for Good.”
From our team at CoPeace: We wish everyone a very happy, impactful new year, keeping things in perspective along the way.
Meg Masten is the Chief Relationship Officer at CoPeace. As a forward-thinking holding company, CoPeace is building a portfolio of carefully selected for-profit companies with measurable social and environmental impact. To learn more about impact investing, check out CoPeace’s Intro to Impact Investing.
Mindful Packaging
It is the season of shopping and gift giving. With the holiday shopping season, comes attractive packaging, which quickly ends up as trash. Packaging of a product is meant to keep the product safe and easy to transport. Packaging is considered as an effective advertising tool. Today packaging has become part of products’ design.
The packaging of a product has become its own industry, with teams dedicated to the “unboxing” experience and the emotional connection that comes with opening a consumer package. But packaging is also waste. For instance, when we purchase a new phone there are multiple layers of plastic, cardboard, and paper before we get to the actual product. This is the art of psychology.
When looking at alternative options, the industry is exploring biodegradable, compostable, and reusable packaging options.
What we can do to make sure our packaging is creating a positive impact?
- Compostable packaging is a growing trend for conscious consumers. There are companies producing compostable packaging and even compostable satchels, too.
- By going the biodegradable and minimalist packaging route, products become cheaper, as more product can be fit in each shipment and less material is required for production.
Nowadays, consumer technology companies add up to 20% or more to the sale price of products due to the many layers of packaging materials involved in the process.
There is a common misconception that e-commerce is a more sustainable alternative, but additional waste is generated when shipping the products, through added packaging and the carbon footprint of shipping. Choosing a supplier that has headquarters throughout the world allows packaging to be delivered in a shorter period of time and reduces the transportation costs and the CO2 emissions that come with it!
It is common knowledge that single-use plastics are not sustainable for packaging, and even when recycled, there are still tons of new plastics being manufactured for packaging. What if packaging suppliers partnered with charities or nonprofits to have trees planted equal to the average number of trees used for the packaging materials generated?
When doing your holiday shopping, be on the lookout for a Forest Stewardship Council certification. This FSC certification guarantees the package sourcing is environmentally-friendly, socially responsible and economically viable. FSC is an organization that works to promote the practice of sustainable forestry worldwide.
There are many possibilities. If done thoughtfully, we can have a positive impact with consumer packaging on our precious planet. So let’s consciously decide together to work towards the change.
Aarti Karnik is the Director of Web Development with CoPeace. As a forward-thinking holding company, CoPeace is building a portfolio of carefully selected for-profit companies with measurable social and environmental impact. To learn more about impact investing, check out CoPeace’s Intro to Impact Investing.
Thankful For Change
I am feeling deeply appreciative and thankful, privileged and responsible. That is a lot of feelings mixing together (exercise and lunesta help).
- Without parents who sought out the education that expanded their horizons past, and including, their rural and small town Wisconsin roots…
- Without supportive friends and family who often came from communities of some privilege…
- Without crazy diverse experiences interacting with global communities of many kinds…
- Without a committed team of people willing to believe in where we are going…
We would have no chance to have the opportunity to change the world in our little way here at CoPeace.
My parents grew up in loving, supportive homes. Though they would not have been considered wealthy by most American measures, they did not worry about their next meal or having a warm bed. Their life allowed them to grow and explore with confidence – to live in places like Chicago and India so that they could experience new cultures. I appreciate the start they afforded me.
Without family and friends like Seanna, Jeff, Meg, Brad, Dez, Robert, and Sarah (and 20+ others), we would not have had the resources to get our venture going. They have provided significant cash and connections to launch us in a way most people would not be able to afford. And, it turns out you need resources to create a new, impact-driven holding company in a model that is unusual for regulators. I am very thankful.
I recognize the privilege that comes with my particular access. We take this responsibility very seriously. With friends and family committed to trusting where we are going, failure is not an option.
We were recently interviewed by a woman from New York who is writing a story on new models in impact investing. She was impressed with our progress, saying others have not been able to pull off what we are doing. We told her we knew why! If we did not have the trust of our friends and family network, we would not have the resources for the required legal, audit, regulatory, technological and other costs to get to the finish line!
Most people in our global village do not start with these advantages. Not even close. We are working hard to create a new tool that is designed to provide an innovative approach to allow everyone to generate equity and wealth-building through our upcoming Direct Public Offering. What we are doing is difficult and the interrelated systems of privilege are quite deep – many of these systems are designed to exclude new approaches. We are thankful to have the opportunity to create this different type of access. We look forward to big news in 2020, and beyond!
I am content to be what I am not content to say.
– Poet Alex Stevens, at age 80
Craig Jonas is the CEO and founder of CoPeace. As a forward-thinking holding company, CoPeace is building a portfolio of carefully selected for-profit companies with measurable social and environmental impact. To learn more about impact investing, check out CoPeace’s Intro to Impact Investing.
Regulating the Future
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Regulating the Future
By Jim Crawford
With 50 days remaining in the current decade, I wanted to reflect on the massive shift humanity has undergone in just 10 years. We’ve witnessed the proliferation of technology. Handheld and pocket-sized electronics are now the norm, communication has digitized, and mass-automation is on the horizon.
The third decade of this century presents an opportunity for our society to take a step towards the protection and continued wellbeing of the everyday citizen. Regulation needs to catch up. Corporations are proven to have the financing and structures to create mass automation, communication, and navigation. All moving society and industries forward with neck-breaking momentum.
So as capitalism continues to flourish, government entities of the world must become more nimble and technologically savvy. The responsibility of the sovereign nation is to its citizens first-and-foremost, without whom a sovereign nation would cease to exist. In this whirlwind of technology, our governments need to address the regulation of the industry with the intention of protecting privacy, human rights, and promoting equality.
Up until this point, I would argue that government regulation has been weak regarding technology, data, and consumer privacy. We are beginning to see positive steps, with the development of GDPR in Europe. However, these mega-corporations are still fined pennies on the dollar for negligence surrounding customer data.
It’s time we harness technology for the greater good and betterment of society. Instead of using technology to generate only quarterly profits, what if technology was also harnessed to properly address environmental and social problems of the world today?
Jim Crawford formerly worked with CoPeace in business communications. As a forward-thinking holding company, CoPeace is building a portfolio of carefully selected for-profit companies with measurable social and environmental impact. To learn more about impact investing, check out CoPeace’s Intro to Impact Investing.
The Newest Stakeholder in College Sport: The Student-Athlete
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The Newest Stakeholder in College Sport: The Student-Athlete
By Julian Gill
When California Governor Newsom signed California SB-206 – The Fair Pay to Play Act – last month, it sent a signal to the nation that student-athletes, the foundation of intercollegiate athletics, are not being treated fairly as stakeholders in the robust business. Governor Newsom said, the bill will change college sports for the better, putting the interests of student-athletes on par with the interests of the institutions. While the debate often centers around whether student-athletes should receive a portion of profits from the NCAA and schools, California’s bill addresses external financial opportunities. The Fair Pay to Play Act, set to become active on Jan. 1, 2023, will allow student-athletes the right to earn compensation from their own name and likeness (e.g. sponsorships opportunities).
While there are valid debates about how and whom will be impacted through the new earning opportunities, it’s clear from numerous past lawsuits and similar legislative proposals in other states, student-athletes have been feeling unsatisfied with the balance of power in their relationship with the NCAA. The NCAA responded to the bill’s passing with a call for national discussion and legislation, believing an organization-wide solution offers better clarity than varying state regulations. One could argue this was done in an effort to continue the conversation and provide evidence against student-athletes’ claims of undercompensation in the annual multimillion-dollar industry.
NCAA President Mark Emmert has acknowledged the growing negative perception of the organization and its institutions. However, the NCAA’s response to California’s SB-206 seems unlikely to compel student-athletes to see the governing body as an ally.
At CoPeace, we understand successful organizations of the future need to treat all stakeholders equally. We know building relationships and respecting everyone in our organization will strengthen our community and positive impact.
What is Real Impact?
As we’ve positioned ourselves in the impact investing space here at CoPeace, a common concern emerges in our conversations – How can CoPeace achieve real impact with its investments?
This is not a light question. Complex, systemic issues require attentive, holistic solutions. CoPeace attempts to address these issues through its growing portfolio of complementary subsidiaries, but how can we be sure we are producing real impact?
We definitely know what “real” impact is not. If a fund claims to be socially-responsible fund, but includes a company like Exxon in its portfolio, then that fund is not an impact fund. We can also distinguish solving an issue from reducing the negative effects of an issue. A clothing company that uses 25% less nonrenewable materials in its products might be relatively more sustainable, but this does not address the core of the issue with the fast fashion industry. “Real” impact is not just doing less of the bad stuff!
CoPeace stringently screens potential holdings through our HEAD + HEART + MATH approach. We ensure each of our subsidiaries generates mission-driven, measurable impact. As a Public Benefit Corporation and Certified B Corporation, CoPeace actively works to align its operations along themes of impact and radical transparency. CoPeace enables you to use your money to produce real impact without sacrificing financial return – you can grow your money for good.
Jacob Miller is a financial analyst at CoPeace. As a forward-thinking holding company, CoPeace is building a portfolio of carefully selected for-profit companies with measurable social and environmental impact. To learn more about impact investing, check out CoPeace’s Intro to Impact Investing.
Changing the World Isn’t Easy...
Something’s gotta change. We live in a world plagued by mass shootings, natural disasters, stock market instability, and rampant social injustice. The current status is not an acceptable trajectory, and we must do better for future generations. We founded CoPeace last year with the intent to change the world (no joke) by shifting the paradigm of capitalism. No one ever said this would be an easy road, but I had no idea how hard it would be.
At CoPeace, we are doing something in a unique and creative way that hasn’t been done before. CoPeace is a first-of-its-kind as trailblazers with no path to follow. Anyone who has birthed a company knows all too well the challenges and setbacks that come with a startup. Now insert the concept of doing something that has never been done before in the finance industry, which has historically been resistant to change or simply unwilling to try something innovative. Even legal and financial experts have occasionally been perplexed by this road-never-traveled. We are causing major disruption, with no established roadmap to lead the way.
At CoPeace, we are tackling difficult issues. Having conversations about money, investing, and generational wealth can make people uncomfortable. Add in more layers of complexity with the plethora of impact sectors – from fair trade to ocean plastic to energy – and we are facing the daunting reality of today’s world. Blending the complexities of the investment world with the complexities of the impact space can make your head spin, become disheartened, or both.
But….at CoPeace, we are a determined, tenacious, and resilient bunch. We are creative, innovative, think-outside-the-box kind of people, who haven’t forgotten that sometimes a good sense of humor is the strongest weapon against adversity. We strive everyday to execute our mission of successfully merging profits with purpose. We understand the critical nature of our work, and we believe we have no other option than to change the world. But let’s be real…it isn’t easy.
Find out more about how you can “Grow Your Money for Good” at copeace.com.
Meg Masten is the Chief Relationship Officer at CoPeace. As a forward-thinking holding company, CoPeace is building a portfolio of carefully selected for-profit companies with measurable social and environmental impact. To learn more about impact investing, check out CoPeace’s Intro to Impact Investing.