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The B Corporation A New Kind of Company For a New Sector of the Economy. A Conversation with ACG Philadelphia February 18, 2010. Quick Background. 3 Co-Founders with successful 15 year private sector careers as Entrepreneurs, Operators, Investors. MSD Capital, L.P. $13B Private Equity.

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The B Corporation A New Kind of Company

For a New Sector of the Economy

A Conversation with

ACG Philadelphia

February 18, 2010

Quick Background

  • 3 Co-Founders with successful 15 year private sector careers as Entrepreneurs, Operators, Investors

MSD Capital, L.P.

$13B Private Equity

$250 MM Brand

B Lab - Overview

501(c)3 non-profit which certifies and supports B Corporations

Objective 1: Expand corporate accountability

through new legal framework

Objective 2: Drive social and environmental impact through standards

What is a B Corporation?

  • The B Corporation is a new kind of company which uses the power of business to solve social and environmental problems

  • Meets higher standards* of social and environmental

  • performance, accountability, and transparency

  • Amplifies voice for a diverse marketplace

  • through the power of the unifying B Corporation brand

  • - B stands for Benefit

* B Lab is the nonprofit which certifies and supports B Corporations.

B Corporation – Performance Standards

B Impact Rating System

  • Free web-based tool

  • for impact assessment

  • and improvement

  • Comprehensive

  • Transparent

  • Dynamic

  • Independent

  • 5,000+ users

  • 80 out of 200 points

  • for certification

B Corporation – Legal Standards

B Corp Legal Framework

  • Amend Articles of Incorporation requiring companies to

  • consider of the impact of decisions not only on shareholders,

  • but also stakeholders

  • Benefits

    • - protection for Directors to consider non-financial interests

    • - accountability to shareholders to uphold new standard of conduct

    • survives new management, capital and ownership

    • no additional liability from non-shareholders

Significant Momentum - Companies


Diverse and growing community of leaders

Financial Services

Consumer Products

Business Services


Significant Momentum – Media


Receiving fair share of press

Objective 1 – New Legal Framework

Policy Makers

Infrastructure and incentives for a New Economy

  • Benefit Corporation legislation

    • new corporate form with higher standards of corporate purpose, accountability, transparency

  • 2010 : VT, MD, NY and PA possible

  • 2011: CO, NC, OR

  • Incentives for certified sustainable businesses

  • 2009: Philadelphia B Corp tax break passed ($500k/25 companies/5 years)

  • 2010: Respond to inquiries from cities and Champions

Objective 1 – New Legal Framework

Benefit Corp Legislation – Major Provisions

  • Purpose

  • shall create general public benefit

  • shall have right to name specific public benefit purposes

    • (e.g. 50% profits to charity, carbon neutral, 100% local sourcing, serve the poor)

  • Accountability

  • directors and officers shall consider effect of decisions on stakeholders

  • shall have an independent Benefit Director

  • shareholders and directors have right of action (no third parties)

  • Transparency

  • shall publish annual Benefit Report in accordance with recognized standards for defining, reporting, and assessing social and environmental performance

Objective 2 – Drive Impact through Standards

What is Impact Investing (SRI 2.0)

  • Generate both financial return and social and/or environmental value

    • Includes community development finance (CDFI’s), microfinance, Cleantech, and other triple bottom line businesses in industrialized and developing world

    • New investment grew by average of 35% over past 5 years

    • Sector has grown to over $50B in total assets

    • Projected to grow to 1% of total managed assets in 10 years, or $500B of capital flows to social and environmental impact

Objective 2 – Drive Impact through Standards

Capital Markets

Driving capital beyond SRI to Impact

  • GIIRS (Global Impact Investing Rating System )

  • Indpnt ratings agency based on B Ratings System (S&P analog)

  • Fund Ratings and Company Ratings

  • Including companies in developing world

Objective 2 – Drive Impact through Standards

Global Impact Investing Ratings System

  • Assess the social and environmental impact of private companies and funds using a ratings approach

    • analogous to Morningstar investment ratings or S&P credit risk rating

  • Allow for comparable measurement of positive impact across

    • investment products

    • developing and advanced economies,

    • industries, company size, and impact focus

  • Used by both institutional investors and investment intermediaries to

    • evaluate, screen, manage, and communicate the social impact of their sustainable private equity and debt investments

Historic Opportunity

  • To create social impact through business and transform corporate accountability

  • Chorus of prominent voices

    • Gates, Creative Capitalism

    • Yunus, Social Business

    • Blood&Gore, Friedman, Sustainable Economy

  • Financial crisis

  • Seizing the Opportunity

    Building a new sector of the economy

    • Creates economic opportunity

    • Strengthens communities

    • Restores environment

    • Alleviates poverty



    Clean Tech



    Private Equity

    Wealth Managemt




    Building Industry










    Developing World




    Real Estate


    Renewable Energy


    Personal Care




    Thank you

    • For your time

    • For your leadership and support