Becoming a B Corp

Back in March, we shared about our application to become a Certified B Corp. As of last week, we were excited to be confirmed as a Certified B Corporation, joining several thousand businesses around the world in placing the needs of our team, clients, and our community over pure profit as a legal foundation for MY Wealth Planners®. When we first submitted our application for certification, we were initially scored at 118.1 points, and by the time we were completely certified, we were pleased to finalize our score at 114.8, which is over two times the score of the median business that applies for certification (50.9 points.)

In celebration of the occasion, we thought we would share the factors that contributed to our certification, what areas we struggled in, and our thoughts about the mission and impact of MY Wealth Planners® going forward.

Earning B Corp Certification

As a refresher, scoring for the B Corp Impact Assessment is broken into five major categories: Governance, workers, community, environment, and customers. Respectively, we scored as follows:

In the area of Governance, the primary drivers of the scoring are transparency and ownership opportunities within the organization. This means that the assessment focuses heavily on not only who runs the show, but how the show is run. Questions poke and prod at the subject of management structure, how much is shared with employees and team members versus “kept close to the chest,” and there is an emphasis on pathways to employee or team ownership of the company, rather than it being privately held or taken public.

Our highest-scoring area was Workers, and I’m extremely proud of this area. The Workers assessment heavily focuses on compensation and benefits for team members, both in objective terms (e.g., do you pay a living wage, offer a high match on the retirement plan, etc.) and in subjective terms, such as how much I, as the owner, am paid as a multiple of the lowest-paid employee’s wages. In this regard, our compensation is considered extremely generous, and consequently, we scored well.

Community impact was another area in which we had many strengths to show. Particularly, the emphasis in this area was on the employment of, and utilization of, under-represented groups. As a veteran myself, and as a firm that’s 33% female today, we score well in a number of these dimensions. However, we also score well in that many of our major software applications and vendors are also representative of underrepresented populations, and so with both our heavy engagement in volunteerism and donating of money to non-profits, we also see a strong showing in this dimension by supporting those minority-owned businesses and organizations.

Environmental is an area of the B Corp Impact Assessment that is tough for us to score on in general. Because the B Corp Impact Assessment tries to treat companies as uniformly as can be, there are many questions in the Environmental that we cannot answer and receive points for. That said, I would say we scored a “perfect score” in the elements we can be assessed on. For example, Longmont, CO, uses a large amount of renewable energy as part of its utilities grid under the Platt River Power Authority, and has a goal to reach 90%+ renewable energy by 2030 (and is on track to meet it!) We also run a borderline paperless office, preferring digital communication and documents at all times when possible, which reduces our environmental impact substantially.

Finally Customers. Deep sigh. This area doesn’t look like we scored well, but I think it’s an area worth deeper discussion, so it’ll get it’s own section after we review the “could be improved” dimensions of other assessment areas.

Areas for B Corp Impact Improvement

Our primary “falling short” in the governance category fundamentally revolves around Dan, funnily enough. Essentially, the B Corp Impact philosophy focuses on the good of the world as a whole, and consequently, takes a skeptical view toward single individual or private ownership of companies, rather than opening it up for the employees of the company to own the establishment. This area is not something I anticipate changing in the short term about MY Wealth Planners®, but it is a long term goal to eventually allow team members to become equity owners of the firm. Today, this is somewhat moderated by the presence of a gainshare program, in which employees do share directly in the profits of the company assuming it’s profitable, though that does not entitle them to ownership or actual equity. One area that can be more immediately improved is the level of transparency and reporting provided to the team. While we do practice open bookkeeping and share KPIs for the firm openly with the team, there are metrics such as financial ratios and the like that, while calculable, are not already shared that could be added to the information shared within the firm.

Ironically, there is very little to improve in the Workers category. Even though we did not score a perfect score in this area, one of the issues I’ve found with the B Corp Impact Assessment is that it does not award points if you do not engage in a behavior as a company. So, for example, we did not receive any points regarding how well we pay part time workers or contractors because we do not have part time workers or contractors. This is because of my own preference that whomever we employ at the company, they can receive compensation and benefits sufficient to support themselves and their family if needed; while there are many good part time jobs and reasons to work part time, these reasons simply don’t apply to MY Wealth Planners® today, and consequently, we missed out on those points.

In the area of community impact, there is a stark contrast with the Workers dimension. While in Workers, we did very well via high compensation, strong benefits packages, and the like for our team members, we do fall short in a few areas. Specifically, we presently are an all-white firm, which is not something that we can easily fix, but something to be very mindful as we continue to recruit and hire in the future. While it’s not to say that we simply “must” hire the next minority to apply to the firm, we should be extra considerate of the representation of groups other than that of the majority in our firm, and ensure that we are careful to scale representation with the firm as we grow from the few to the many.

There isn’t too much we can say on the environmental dimension. A previously mentioned, if you do not engage in a corporate behavior (e.g. manufacturing) then you cannot be scored on the dimensions related to that dimension. Fundamentally, this means we ended up missing out on some points for things our firm doesn’t do, but there were still some highlights. Predominantly, because we score well on our environmental impact in the office, the next dimension for us to consider is the impact of commuting and work-from-home practices, and how those do still generate a degree of environmental impact that we should be cognizant of.

The Biggest Area For B Corp Improvement

The area we scored worst in was Customers, and I won’t lie, it hurts a little bit. However, this is an area that a bit of explanation can do a lot of lifting in. Customers is a dimension of the B Corp Impact Assessment that does customize heavily to your line of business, rather than being more universal. In the case of MY Wealth Planners®, the primary line of business we’re classified as is as an Investment Management firm, rather than a financial planning firm (a category that doesn’t exist, yet!) Consequently, the assessment heavily drilled down into our investment processes and procedures, along with our client education and advocacy work. Herein was the problem.

The B Corp Certification does, to its credit, have a lot to say about corporate governance and environmental impact, particularly in the dimensions of what we would call “ESG” in the investing parlance, or Environmental Sustainability Governance investing. However, the B Corp Impact Assessment does not discriminate between a company as big as Blackrock or as small as MY Wealth Planners®, and consequently, there were many dimensions in this area we struggled to score well in. For example, how many public company owners are we educating or mentoring on ESG factors in how they run their publicly traded company? Well, as much as I’d like to say I have Tim Cook or Warren Buffett’s ear, the answer is a big fat zero.

Another area we got beat up on was not just whether we screened and assessed ESG factors as part of our portfolios for clients, but what actual proportion of our client’s portfolios were invested in “ESG Approved” companies or investment products. Once again, we had an issue here: we do not force our clients to invest in ESG-style investments. I would even go so far as to say that forcing it would be a breach of our fiduciary duty to our clients. ESG factors do matter in investment management and portfolio construction, but ESG is a reflection of the values and beliefs of the client and what factors they do or do not think are relevant in how their money is invested. Were we a firm that only worked with people interested in ESG investments, that might be a different story, but the fact of the matter is that we’re the only fee-only financial planning firm in Longmont, CO, and consequently, we have a clientele that’s just as diverse in identity and beliefs as the city itself.

Ultimately, this is an area where we can improve education and help elicit a conversation with clients for those interested in ESG investing. However, I think it would also be just as helpful for me to advocate for a “financial planning firm” category with the B Corp Impact Assessment so we can get factors more relevant to financial planning and what we do for our clients every day!

Having a B Corp’s Impact

I am proud that MY Wealth Planners® is a Certified B Corp. We have spent a lot of time and energy trying to build a firm that serves the team that works in it day to day as much as the community around it. Our advocacy and efforts as a company are heavily focused not on generating profit, but on serving our clients and community in the best way that we can.

For those looking to see the deep dive full version of scoring and points, you can download a copy of our B Corp Impact Assessment here.