Back in the 90s, three individuals set up a basketball apparel brand out of Philadelphia.
They started by selling t-shirts from their cars. A few years later it was a business with revenues in the hundreds of millions of dollars. But that’s not the interesting part of the story.
The business had become profitable in a socially responsible way. It offered great parental leave benefits, gave a percentage of profits to charity, worked with suppliers to ensure fair pay and safety, and so much more.
Then the founders took an opportunity to the sell the business. In this moment everything changed. One by one, the company’s commitments to people and the planet fell away. The trust the business had carefully built up over several years disappeared almost overnight.
Dismayed, those same three individuals set about to create a permanent structure to help businesses make better social and environmental decisions over the long term. A structure that would encourage trustworthiness and transparency.
The result was the benefit corporation or B Corp.
Why B Corps matter in financial services
The B Corp movement should feel especially relevant for financial services, where trust and transparency are integral. Whether you’re a financial adviser guiding a client through an economic downturn, an institutional investor committing capital to a fund, or an investor investing through a platform, the whole industry relies on trust. Yet trust and transparency have not always been associated with our industry. In fact, I often see financial services ranked among the least trusted industries by consumers globally.
This is something we should strive to change.
And it was the driving force behind why Octopus was founded in the first place. We set out to be a financial services company with a difference. We wanted to build an investment company worthy of trust, which put its customers first and helped to make the world a better place.
Financial services is an industry that influences society, both in terms of customers and in deciding where money is directed and how effectively it is used. The industry has an enormous impact on people’s lives and the planet, and consequently we have a duty to people and planet.
This is why we should be encouraging frameworks like B Corp to drive better, more transparent business.
B Corp is an ideal framework to develop trust
I’ve been at Octopus for 12 years. I can say with confidence that becoming a B Corp in 2021 was one of the best decisions we’ve made in our 23-year history.
We’ve always known that people want to buy from and work for companies that out-behave and do the right thing, even when no one is watching. Becoming a B Corp was another important step for us in building a trustworthy business that makes decisions by considering all its stakeholders.
The process took us almost two years to certify, and it has been worth every day of that process.
B Corp certification has fundamentally changed the way we operate. In every decision we look at how we can serve our shareholders, employees, customers, the environment, and the broader community.
It’s a powerful framework that’s legally cemented into our business (we changed our Articles of Association to ensure we must consider the interests of all our stakeholders when making decisions).
And we use that framework to help us continue to do the right thing when we set objectives, run the day-to-day business, and report on progress.
Across all our stakeholders it has helped guide decisions that will increase the trust you place in us. Here are some examples:
- Shareholders – we produced a comprehensive, publicly available annual report despite there being no obligation to do so as a privately owned company.
- Employees– we’ve set diversity and inclusion targets to build an inclusive workforce, and placed renewed focus on training and education.
- Customers – we continue to pride ourselves on best-in-class service, with financial advisers voting us five stars for service nine years in a row at the Financial Adviser Service Awards.
- Environment – we have a Net Zero target and track our emissions every year.
- Community – we actively encourage volunteering and our employees volunteered more than 12,500 hours last year. The lion’s share of those hours were spent 2014 to help charities make the world a better place. As well as donating money (we’ve donated £1.5 million since we set up the foundation) with partner charities via our foundation, Octopus Giving.
Future Generations Report 2023
We’re on a mission to invest in the people, ideas, and industries that will change world.
As part of our commitments as a certified B Corp, we produce a report every year which shows how we’re having a positive impact on all our stakeholders.
Inside you’ll read about how we’re helping to build a sustainable planet, empower people, and revitalise healthcare.
Building an industry people can trust
Of course, being a B Corp doesn’t mean you have all the answers and the job is done. All businesses that become B Corps have areas where they need to improve.
What you can be certain of is that the certification increases transparency and allows stakeholders to understand whether a company is being responsible or not. In other words, you’re dealing with an organisation that’s built a strong foundation for trust.
We’re embarking on a journey to build a network of like-minded businesses to increase trust in financial services. We’re looking forward to growing the ground swell of support for better business.
If you’re thinking of becoming a B Corp or would like to learn more about our experience, please get in touch with us at [email protected]. We’ll be happy to help.