How B Corp can demonstrate and inspire a more sustainable future

With businesses increasingly seeking ways of showcasing their ESG credentials, Alex Bexon, LDC’s ESG Director, explains the role of B Corp and how our partnership with Seismic will support our portfolio companies pursuing the certification.

As I’ve written about before, one challenge with ESG is the myriad of frameworks that exist for measuring and demonstrating positive credentials without agreement necessarily existing on which one is the ‘gold standard’.

Yet, increasingly, B Corp certification is becoming a way for companies to demonstrate that businesses can be a force for good, broadly based around the pillars of governance, employees, community, the environment and customers.

B Corp status is bestowed by an independent Standards Advisory Council set up by B Lab, the non-profit organisation behind B Corp. Any company seeking certification must submit detailed documentation setting out its progress, commitments and strategy.

Globally, there are now more than 7,600 B Corps, including over 1,500 in the UK. Businesses benefiting from the certification have reported that it helps with attracting and retaining employees, driving revenue growth and securing investment.

This brings me to LDC. We recognise that ever-more medium-sized businesses are seeking independent verification of their positive ESG credentials. The motivation for this can differ, from the vision of the management team to a need to demonstrate to stakeholders, such as investors, customers and employees, that the company is positively contributing to society.

But whatever the driver, our view is very much that B Corp helps companies become more responsible businesses and can be a material value-creation lever. Already in our portfolio, creative and technology group MSQ, which LDC first backed in 2019, has secured accreditation, in addition to our recently exited portfolio company Forest Holidays. A number of other LDC-backed businesses are actively pursuing B Corp too.

This ethos is behind our partnership with Seismic, a UK-based consultancy that helps companies to measure, manage and communicate their social and environmental performance using the B Corp framework, and to develop ESG strategies that achieve business objectives and support B Corp certification.

The partnership means LDC portfolio companies – along with the support they already receive from our Value Creation Partners team and wider network – can now get bespoke advice on working towards B Corp. Seismic’s experts will help our businesses map out and evolve into more impactful and sustainable companies, both during and well beyond our investment period.

I’m really excited about linking up with Seismic. In my role, over the past 18 months I’ve liaised with all the management teams from our portfolio of over 90 businesses, helping them to evaluate and strengthen their ESG credentials. We now have an even more compelling offer for our companies and a differentiator in our role as one of the UK’s most active investors. 

Rigorous process

 It is, though, important to note that B Corp status is not a marketing play. Achieving certification is difficult and time-consuming as it is awarded only to those businesses that demonstrate the highest standards of social and environmental, performance, transparency and accountability. That lies at the heart of why it is such a respected global certification. Yet even those businesses that don’t ultimately certify as B Corp can benefit from reviewing and evolving their strategies in line with learnings from the assessment process.

In reality, the accreditation isn’t for all businesses. One of the great things about B Corp is that the B Impact Assessment (BIA) – the free tool that is part of the certification process – can also be used as an ESG management framework without pursuing certification. Used by over 240,000 businesses globally, it’s a robust starting point for less mature companies, helping them to develop a clear and authentic approach to ESG.

Meanwhile, LDC and Seismic have launched a dedicated portal for our portfolio companies that provides more information on B Corp and how our partnership works. The site also features inspiring interviews with senior leaders from LDC portfolio companies James and James Fulfilment and Headland Consultancy, both of which are actively on their B Corp journeys.

You can watch these videos below: