Tiny Southern California Agency Earns B Corp Status

Merely bringing your A-game may not be enough to entice certain companies to give you their business, especially those who are looking for environmentally or socially conscious partners.

Following the challenging recession period the “green” movement seemed to take a backseat to mere survival, but as of late there seems to be once again growing interest in doing business with companies interested in topics like sustainability, corporate giving and social consciousness.

However, a business can go to great efforts to make its operations more sustainable, earn awards from various organizations for treating employees well, donate to social causes, and make efforts to be transparent, yet to some those things may just be considered lip service without proof the company is actually carrying out such stated initiatives.

A few years ago a nonprofit figured out a way to provide proof that some firms are operating beyond just benefiting the bottom line, and the list of companies becoming certified as benefit corporations, or a B Corp, is growing.

Recently one small Southern California insurance brokerage joined that growing list. Insurance brokerage Griswold & Griswold announced in late May that it was the first B Corp in the city of Torrance, and one of only a handful of firms in the insurance industry, to become a certified B Corp.

Sort of like Fair Trade Coffee, or LEED certification, being a B Corp stamps a label on an entire company that says that company has met certain social and environmental standards.

Currently there are 759 B Corps in 27 countries and across 60 industries, according to B Lab, the nonprofit organization that certifies companies as B Corps.

Among those are several big names that most probably already associate with some sort of social or environmental progressiveness, such as Ben & Jerry’s, Patagonia and eyewear designer Warby Parker.

While the majority of B Corps are from the service industry, there are a growing number of companies in manufacturing, organic foods, banking and lawyers, according to B Lab spokeswoman Katie Kerr.

“It’s all over the map and it’s really starting to expand,” Kerr said.

In 2008, one year after the inception of B Corps, there were 125 companies that had earned the certification. Since then there has been steady growth: 212 B Corps by 2009, 370 by 2010, more than 500 by 2011. As of the end of 2012 there were 670 B Corps.

B Corp laws have been enacted in 16 states and B Corp laws are moving forward in nearly 20 others, according to B Lab. The laws recognize new legal structures that give company directors legal cover to consider social and environmental goals instead of just financial returns.

“It creates a new corporate form called the benefit corporation and gives businesses the freedom and legal protection to pursue the triple bottom line,” Kerr said. “Under current corporate law, the only legitimate purpose for a business is to maximize profits.”

Large states where legislation has passed include California and New York. Delaware, the home of corporate law, is set to sign benefit corporation legislation into law in July. Gov. Jack Markell recently joined members of the General Assembly to introduce draft B Corp legislation.

So far there are few in the insurance industry certified as B Corps. Beside Griswold, agencies to become B Corp certified include: BayPoint Benefits in San Francisco, G2 Insurance Services in San Francisco, NRG Insurance in Seattle and Clark-Theders Insurance Agency in West Chester, Ohio.

B Lab evaluates and certifies applicants based on company governance, worker and other stakeholder interest, community engagement and impact, environmental resource and energy consumption, and other benchmarks like accountability, transparency and diversity.

B Lab allows companies to self-report activities they believe will qualify them as a B Corp, then the organization verifies a certain percentage of that information through requested documentation, such as asking for written human resources policies, or written proof of socially conscious policies, like providing employees paid time off to volunteer in the community or donations made to community organizations.

Firms are required to meet a minimum of 80 points out of 200 on a B Corp impact assessment. They are required to change their bylaws to ensure their mission of being socially and environmentally friendly survives past the existing leadership, they must sign a term sheet, and then pay an annual fee of between $500 to $25,000 based on sales.

Griswold scored an 86. One of its top performance areas was in worker practices, according to B Lab. Griswold pays 100 percent of its fulltime workforce’s health premiums, although that may not be a stretch for a firm with only four fulltime employees.

Giving is another area that boosted Griswold to B Corp status. According to Griswold, on top of the standard 10 vacation days and five sick days each year, employees get two paid “volunteer days” in which to participate in some type of community service. The company also donates nearly 5 percent of its sales back to the community or social causes, according to Griswold.

Having a strong environmental stance is another area that B Lab looks closely at, and Griswold excelled in this area with its recycling program and energy conservation policies.

“We hardly use any printing or paper,” said Melissa Griswold, the firm’s marketing director, adding that efaxing is preferred, and documents to be signed are sent to signatories via PDF. “We don’t like to waste paper.”

The paper the firm does purchase is only recycled paper, which they buy from Staples, and the office has a reusable paper bin where scratch paper and other partially used or unused paper can be placed for reuse, according to Griswold.

Griswold was asked why she goes to all the trouble?

“Because it’s the right thing to do,” she answered.

Making the company more environmentally and socially active was a natural step for firm Griswold, because she and her partner, husband Steve Griswold, were already actively involved in the community.

Griswold was started in 1948 by Steve’s father Bill, a diaper delivery salesman who augmented his income by selling life insurance policies to clients on his diaper route. The firm’s ownership was for a time in the hands of his wife Keiko, who took over when Bill died in 2006.

The agency deals a lot with medical practices, and has lately been doing a lot of cyber liability business, working with carriers like Philadelphia, Lloyd’s of London, Chubb and Chartis, according to Griswold.

Beyond having the “doing the right thing” mentality, there is marketing value in being a certified B Corp, Kerr of B Lab said.

“It’s so difficult for a normal consumer or just someone looking for a business investment to tell what’s marketing and what’s true,” Kerr said.

And that marketing value in the eyes of Griswold is particularly important in insurance, a relationship-building business in which she believes customers are increasingly placing greater importance on what sort of firm they are dealing with.

“I think it’s letting people know that you are doing what you say you’re doing,” Griswold said, adding that she believes the B Corp certification will help solidify the firm’s relations with existing customers who place importance on social or environmental standards, as well as to add new clients for whom those issues may hold importance.

Griswold, who considers herself a “conscious consumer,” likes the example being set by Warby Parker, which donates a pair of glasses for each one sold. The company reports having donated more than 250,000 pairs.

“They have that whole one-for-one mentality, which I think is brilliant,” Griswold said, adding that such a status imparts to a firm like hers and to Warby Parker the kind of standing in the community not enjoyed my most for profit firms. “We’re a business, but we got this nonprofit-esque kind of seal.”

Topics California Legislation Pollution