’As an industry, we have the power to change the track on building sustainable and environmentally friendly businesses,’ says chief financial officer

Increasing numbers of insurance entities are looking to achieve Business Corporation – or B Corp – status as a commitment to operate ethically becomes an increasing concern for potential employees and clients.

March 2023 was B Corp month, a period when not for profit organisation B Lab UK sought to raise awareness of its aims and the benefits of its accreditation.

Certified B Corporations are companies verified by B Lab UK to meet high standards of social and environmental performance, transparency and accountability.

On March 28, for example, industry consultancy Oxbow Partners announced that it had achieved B Corp status, becoming the latest of almost 40 insurance related organisations worldwide to have achieved verification.

Other insurance-focused B Corps in the UK sector include Simply Business and MGA Arma Karma.

First set up in 2006, B Corp status has since grown in renown to become a recogniseable marker of ESG achievement. 

B Lab UK explained: “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.”

To achieve verification, firms must complete an impact assessment to examine their footprint in a range of areas and also meet the B Corp legal requirement, which necessitates amending their articles of association to embed a commitment to consider the impact of decisions on all stakeholders.

B Lab said the accreditation scheme had been designed to reflect its view that the current economic system, driven by business, was failing to meet its potential to create positive impact.

In fact, B Corp said the current business paradigm creates significant negative impacts for people, communities and the planet.

People before profit? 

Chris Sandilands, one of the founding partners at recently accredited B Corp Oxbow Partners, said: “We are proud to be recognised as a business that puts our people and the wider community before profit – and even more proud that we did not have to change anything material about the way we run the business to achieve B Corp status.

”From the day we founded the business, we wanted each and every colleague to feel respected, valued and empowered. We are proud to be a new kind of consulting business – a multi-disciplinary, high performance team where our people are more than assets.”

Arma Karma’s co-founder and chief financial officer Chris Frogner said the company believes the verification was a key step in the MGA’s development.

“B Corp is a certification that’s like fairtrade for business,” he explained.

“It’s centred around the reality that businesses impact and serve more than just shareholders. You’re held to account on a number of things, whether that’s governance or workers, to community, environment and customers.

“And being a B Corp means that you’re ahead of the curve on several things. For us specifically, some of the FCA rule changes that are coming in around treating customers fairly and Consumer Duty link into the standards set by B Corp.

“[Environmental, social and governance (ESG) concerns] in general have been a big focus for us and the fact that we’ve embedded that into the business from the get-go really makes sure we keep that focus on sustainability and the environment.

“As an industry, we have the power to change the track on building sustainable and environmentally friendly businesses.”

A point to prove

B Lab UK told Insurance Times that there were increasing benefits for businesses that achieved verification.

It pointed to its own research from February this year, which found that 80% of the UK public would favour shopping from companies that are doing good for people and the planet.

Despite the majority of the 2,148 surveyed UK adults reporting that they favoured shopping from these businesses, only 22% of them found it easy to identify whether a company was carrying its commitments through to action when considering buying from them.

And, B Lab added that the ability to evidence ESG performance for an organisation was becoming an ever more important part of hiring, with prospective employees increasingly making decsions as to whether to join companies based on factors such as this. 

This would only be more relevant for attracting the new generation of talented, technologically-sophisticated young people, it explained.

B Lab said its analysis found there that was is a growing demand for purposeful employment.

In a poll of 1,019 workers conducted in February 2023, its results found that 66% of British employees considered a company’s impact on people and planet when looking for a job.

However, only 20% of surveyed employees believed all the claims their employers made concerning social and environmental causes.

“Businesses that become B Corps have seen great results – committed and motivated employees, increased customer loyalty, higher levels of innovation and market leadership,” it added.

Chris Turner, executive director of B Lab UK, commented: “The economic challenges we’re facing are urgent and it’s clear the UK public expect more from the brands they shop from and the organisations they work for.

”B Corp certification provides an opportunity for companies to measure and improve impact for all stakeholders, across all areas of their business.

“But for systems change to be adopted at the rate that’s needed, we need leaders across the wider UK economy to reinvent how business is done.”