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Information Session<br />B Corporations<br />Prepared for MaRS Clients, MaRS Advisors and GTA Area Social and Environmenta...
Summary<br /><ul><li>WHAT IS A B CORPORATION?
RATINGS SYSTEM
SERVICE OFFERINGS
PUBLIC POLICY
ACCESS TO CAPITAL
OUR WORK
OPPORTUNITY
DISCUSSION & QUESTIONS</li></ul>Pg 2<br />
Pg 3<br />What is a B Corporation?<br />Certified B Corporations are a new type of corporation which uses the power of bus...
What is a B Corporation?<br />Comprehensive Company Focus<br /><ul><li>Social and Environmental criteria considering: Prod...
Transparency requirement
Legal requirement to ensure long-term sustainability
On-site audits</li></ul>377 B Corporations  I  $1.82B Revenues  I  54 Industries  I  $1M Annual Savings<br />vs. Thematic ...
What is a B Corporation?<br />Pg 5<br />Different from mainstream business:<br /><ul><li>entrenched social mission;
meet comprehensive and transparent standards of social and environmental performance, transparency and accountability;
institutionalize stakeholder interests; and
build collective voice through the power of a unifying brand.</li></ul>No single sector or industry focus:<br /><ul><li>Se...
Industries: Building, Business Products and Services, Consumer Products and Services, Education and Training Services, Fin...
Pg 6<br />What is a B Corporation?<br />407 B Corporations<br />$1.91B Revenues<br />54 Industries<br />+$1M Annual Saving...
What is a B Corporation?<br />Pg 7<br />Diverse and growing group of business leaders…<br />Consumer Products<br />Financi...
Pg 8<br />What is a B Corporation?<br />To become a B Corporation, you have to do three things:<br />Take and pass the B I...
Benefits</li></ul>-  	protection for Directors to consider non-financial interests<br />- 	accountability to shareholders ...
no additional liability from non-shareholders
Standardized: In 2009, MaRS worked with Blakes to draft a memo on making amendments to articles of incorporation in Ontari...
Submit proof of amended articles within 90 days
Submit to an on-site review if randomly selected
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B Corporation Backgrounder

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This presentation is a backgrounder on B Corps, as delivered at an information session at MaRS on May 13th, 2011. It includes background on: what is a B Corporation, their ratings system, service offerings, public policy, and implications for access to capital.

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B Corporation Backgrounder

  1. 1. Information Session<br />B Corporations<br />Prepared for MaRS Clients, MaRS Advisors and GTA Area Social and Environmental Purpose Businesses<br />Friday, May 13th, 2011<br />MaRS is where science, technology and social entrepreneurs get the help they need. Where all kinds of people meet to spark new ideas. And where a global reputation for innovation is being earned, <br />one success story at a time.<br />
  2. 2. Summary<br /><ul><li>WHAT IS A B CORPORATION?
  3. 3. RATINGS SYSTEM
  4. 4. SERVICE OFFERINGS
  5. 5. PUBLIC POLICY
  6. 6. ACCESS TO CAPITAL
  7. 7. OUR WORK
  8. 8. OPPORTUNITY
  9. 9. DISCUSSION & QUESTIONS</li></ul>Pg 2<br />
  10. 10. Pg 3<br />What is a B Corporation?<br />Certified B Corporations are a new type of corporation which uses the power of business to solve social and environmental problems.<br />B Corporation concept launched in the US in 2006.<br />
  11. 11. What is a B Corporation?<br />Comprehensive Company Focus<br /><ul><li>Social and Environmental criteria considering: Product/Service impact, community, workers, governance,suppliers and customers.
  12. 12. Transparency requirement
  13. 13. Legal requirement to ensure long-term sustainability
  14. 14. On-site audits</li></ul>377 B Corporations I $1.82B Revenues I 54 Industries I $1M Annual Savings<br />vs. Thematic Focus (Industry, Product, or Limited Focus)<br />Social and<br />environmental <br />practices for<br />rainforest <br />protection<br />Facility, product,<br />or service energy efficiency<br />Social and environmental practices<br />in the forestry industry<br />Facility energy efficiency and<br /> use of green materials<br />Recycled content<br />Of product<br />Agricultural practice <br />Of food product<br />Level of disclosure on<br />Social & env. Issues.<br />Fair labor practices<br />To make product<br />Systems established to measure & <br />reduce environmental impacts<br />Sustainability embedded <br />in full life-cycle of product <br />Pg 4<br />
  15. 15. What is a B Corporation?<br />Pg 5<br />Different from mainstream business:<br /><ul><li>entrenched social mission;
  16. 16. meet comprehensive and transparent standards of social and environmental performance, transparency and accountability;
  17. 17. institutionalize stakeholder interests; and
  18. 18. build collective voice through the power of a unifying brand.</li></ul>No single sector or industry focus:<br /><ul><li>Sectors: Manufacturing, Wholesale, Service/Retail
  19. 19. Industries: Building, Business Products and Services, Consumer Products and Services, Education and Training Services, Financial Services, Health, Legal, Media, Restaurant/Hospitality/Travel, Retail and Other</li></ul>Accredited by the U.S. non-profit organization B Lab, based in Philadelphia, Pennsylvania. They focus on standards,mobilizing capital and public policy. <br />
  20. 20. Pg 6<br />What is a B Corporation?<br />407 B Corporations<br />$1.91B Revenues<br />54 Industries<br />+$1M Annual Savings<br />
  21. 21. What is a B Corporation?<br />Pg 7<br />Diverse and growing group of business leaders…<br />Consumer Products<br />Financial Services<br />Bus. Services<br />Canada (26)<br />Other Examples<br />
  22. 22. Pg 8<br />What is a B Corporation?<br />To become a B Corporation, you have to do three things:<br />Take and pass the B Impact Ratings System   <br />Adopt the B Corporation Legal Framework to embed social mission<br />Sign a Term Sheet that makes your certification official.<br />B Corp Legal Framework<br /><ul><li>Amend Articles of Incorporation requiring companies to embed social mission and consider of the impact of decisions not only on shareholders,but also stakeholders
  23. 23. Benefits</li></ul>- protection for Directors to consider non-financial interests<br />- accountability to shareholders to uphold new standard of conduct<br /><ul><li>survives new management, capital and ownership
  24. 24. no additional liability from non-shareholders
  25. 25. Standardized: In 2009, MaRS worked with Blakes to draft a memo on making amendments to articles of incorporation in Ontario/Canada</li></li></ul><li>Pg 9<br />What is a B Corporation?<br />The Term Sheet commits B Corporations to:<br /><ul><li>Submit all supportive documentation for their B Impact Assessment.
  26. 26. Submit proof of amended articles within 90 days
  27. 27. Submit to an on-site review if randomly selected
  28. 28. Pay B Lab annual certification fees based on the full-priced tiered structure below</li></li></ul><li>B Impact Ratings System<br />Comprehensive Assessment Tool<br /><ul><li>Built upon GRI and National Capital Institute (Wiser Business), the standards are:
  29. 29. transparent (not black box);
  30. 30. independently governed by a Standards Advisory Council to avoid conflict of interest; and
  31. 31. dynamic to drive continuous improvement.
  32. 32. measures impact in five key areas related to accountability, employees, consumers, community and environment
  33. 33. assessment tools tailored to: Sectors and Industries
  34. 34. transparent and freely available on the web: thousands have utilized B Impact Assessment
  35. 35. certification requires a composite score of 80 out of 200 points available</li></li></ul><li>B Impact Ratings System<br />Tools and Best Practices<br />Not just an assessment tool: <br /><ul><li>Guidelines: survey has guidelines to improve social and environmental performance
  36. 36. Management tool: benchmark and implement continuous improvement</li></ul>Governance and Evolution<br /><ul><li>Standards Advisory Council (SAC): independent body thatoversees the certification ratings and auditing requirements for B Corporations and GIIRS rated companies in both developed and emerging markets
  37. 37. Beta Version 3.0: Just launched in May 2011
  38. 38. Version 2.0: new version released every two years; SiG@MaRS contributed to this version
  39. 39. Version 1.0: reviewed by 600+ entrepreneurs, investors, thought leaders and academics</li></li></ul><li>B Impact Ratings System<br />B Corporation Standards Advisory Council<br /><ul><li>Cathy Clark, Adjunct Asst. Professor, Duke University, CASE
  40. 40. Debra Dunn, Director, Skoll Foundation
  41. 41. HewsonBaltzell, Head of Sustainability Solutions, Risk Metrics
  42. 42. Don Shaffer, President & CEO, RSF Social Finance
  43. 43. Bonny Moellenbrock, Executive Director, SJF Advisory Services
  44. 44. Beth Sirull, Executive Director, Pacific Community Ventures
  45. 45. Rhonda Evans, Science Advisor, GoodGuide
  46. 46. Doug Claffey, Founding Partner & CEO, Workplace Dynamics
  47. 47. Bart Houlahan, co-founder B Lab</li></li></ul><li>B Impact Ratings System<br />Pg 13<br />What makes it different?<br /><ul><li>Comparable by geography, industry, and company size;
  48. 48. Improvement tool which allows others to use it to get better;
  49. 49. Sets a single bar for entry without making distinctions (ie. no gold, silver, bronze).</li></ul>Validation Process<br /><ul><li>Survey Review
  50. 50. Documentation Submission
  51. 51. Audit/On-Site Review</li></li></ul><li>B Impact Ratings System<br />B Report<br /><ul><li>comparable across industries to drive consumer and investor capital
  52. 52. offers rating and narrative highlights of assessment</li></li></ul><li>Service Offerings<br /><ul><li>Service Partners: Major Cost Savings on packages from major companies including SalesForce(CRM), Intuit, Netsuite, and Inspire Commerce (credit card processing) and dozens of other smaller partners
  53. 53. B to B Discounts amongst B Corps
  54. 54. Key functions: B Corp recruitment and support, service partner development, assessment and auditing, and public policy development.
  55. 55. Learning opportunities: monthly webinars and other development opportunities
  56. 56. Resources: Downloadable guides on governance, employees, suppliers, environment, and community (ie. How to write and employee handbook)
  57. 57. Meet-ups and Events: at a local and international level (in US).</li></ul>Pg 15<br />
  58. 58. Pg 16<br />Access to Capital<br />Social and environmental ventures have difficulties accessing capital<br />
  59. 59. Access to Capital<br /><ul><li>B Lab created a separate venture known as the Global Impact Investing Ratings System (GIIRS)
  60. 60. GIIRS is a ratings agency that provides comparable and transparent social and environmental performance data on enterprises seeking investment capital using ratings methodology analogous to Morningstar or S&P
  61. 61. independent third-party impact ratings product that is comparable, transparent, and easy to use (Note: not financial measurement or a CSR rating) based on the B Impact Assessment
  62. 62. provides ratings for impact funds and companies with focus on mission focused investment opportunities targeting investors</li></ul>Pg 17<br />
  63. 63. Access to Capital<br />What will GIIRS do?<br /><ul><li>used by institutional investors and investment intermediaries like the SVX to evaluate, screen, manage and communicate impact of debt and equity investments
  64. 64. allows for comparable measurement of impact across businesses and investment products in different industries, sizes and focus areas
  65. 65. reduce due diligence costs for impact investors and communications burden for companies by creating a universal standard</li></ul>Pg 18<br />The SVX will be a local, impact first market connecting social ventures, impact funds, and impact investors in order to catalyze new debt and equity investment capital for local ventures that have demonstrable social and/or environmental impact, including nonprofits, co-operatives, and for-profit corporations. (Launching summer 2011)<br />Invest for impact.<br />
  66. 66. Pg 19<br />
  67. 67. Public Policy<br />Pg 20<br />B Lab is advancing a new corporate form through state legislation to create benefit corporations. Ontario has the opportunity to take the lead in Canada.<br />
  68. 68. Public Policy<br />We won’t have a new economy without a new type of corporation. <br />Pg 21<br />20th Century:<br />Shareholder Capitalism<br />21st Century:<br />Stakeholder Capitalism<br />Maximize<br />shareholder value<br />almost exclusively<br />Create social <br />andshareholder value<br />simultaneously<br />
  69. 69. Public Policy<br /><ul><li>4 US states have already adopted benefit corporation legislation (MD, VT, NJ, and VA)
  70. 70. 7 other states moving forward in 2011, including NY, PA, MI, HI, CA, CO, & NC
  71. 71. 11 benefit corporations registered on the first day in MD</li></ul>Pg 22<br />
  72. 72. Public Policy<br />Pg 23<br />Major Provisions of Benefit Corporation Legislation<br />Purpose<br /><ul><li> shall create general public benefit
  73. 73. shall have right to name specific public benefit purposes </li></ul>(e.g. 50% profits to charity, carbon neutral, 100% local sourcing,<br />poverty reduction)<br />Accountability<br /><ul><li> directors and officers shall consider effect of decisions on stakeholders
  74. 74. shall have an independent Benefit Director
  75. 75. shareholders and directors have right of action (no third parties)</li></ul>Transparency<br /><ul><li> shall publish annual Benefit Report in accordance with recognized standards for defining, reporting, and assessing social and environmental performance</li></li></ul><li>Public Policy<br />Strategy<br /><ul><li>Benefit Corporation Legislation Working Group: a small group of researchers, lawyers, and local businesses
  76. 76. Legislative Framework Paper will be developed over the summer to scope parameters of legislation in Ontario</li></ul>Legislative strategy advances through a number of stages over many years:<br /><ul><li>Recognition: official recognition through legislation of the new corporate form;
  77. 77. Procurement Advantage: Different levels of government offer preferred procurement status to benefit corporations;
  78. 78. Tax advantage: tax advantage could eventually be offered by different levels of government, likely starting with municipalities, then moving to investment incentives, then corporate tax incentives.</li></ul>Pg 24<br />
  79. 79. Our Work<br /><ul><li>Activate this aligned agenda in a new partnership with MaRS playing a leadership role for Ontario and Canada
  80. 80. Partners roles
  81. 81. MaRS:Community organizing, local business development for service partners,feedback on assessment process, and public policy development
  82. 82. B Lab: Brand, training, assessment system, auditing and other supports.
  83. 83. MaRS will be the B Lab hub for Canada, with first focus on Ontario during two-year pilot period;
  84. 84. Baseline objective: 60 B Corps registered within the two years;
  85. 85. Increasing access to capital through the SVX platform and affiliated GIIRS/B Corp ratings process</li></ul>Pg 25<br />
  86. 86. Opportunity<br />Building a new sector of the economy that:<br /><ul><li>Creates economic opportunity
  87. 87. Strengthens communities
  88. 88. Restores environment
  89. 89. Alleviates poverty</li></ul>Pg 26<br />Contractors<br />Food<br />Clean Tech<br />Hospitality<br />Legal<br />Private Equity<br />Wealth Mgmt<br />Home<br />Apparel<br />Education<br />Building Industry<br />Retail<br />Architecture<br />Arts<br />Restaurant<br />Consulting<br />Telecom<br />Developing World<br />Media<br />Comm<br />PR<br />Banks<br />Marketing<br />IT<br />Real Estate<br />Footwear<br />Renewable Energy<br />Personal Care<br />B2B<br />B2C<br />Biotechnology<br />Pharmaceuticals<br />
  90. 90. Discussion & Questions<br />

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