Building an Impact Fund One B Corporation at a Time

Best For The World Builders Fund Invests in Best For The World Companies

Written by Tripp Baird

Impact investing is no small game — more than $500 billion annually according to the Global Impact Investing Network (GIIN). But not all impact investors follow the same guiding principles. While many investors seek to do less harm, fewer are committed to fully “net-positive” impact through their investments. Think: actively investing in the sustainable, renewable energy industries versus screening out fossil fuel industry investments in a public portfolio.

As a Certified B CorporationThe Builders Fund model has quantifiably achieving and improving positive impact built into its foundation. B Corp certification and a GIIRS Fund rating from B Lab include a third-party audit of the portfolio companies we partner with as well as our own operations — and now we are proud to be a Best For The World honoree for the fourth year in a row, largely because of the scalable, positive solutions the companies we invest in are successfully pursuing.

Our vision is to make meaningful investments of capital into responsibly run businesses that improve the world and, via our success, help to shift the financial services sector toward one that is more sustainable, systems-aware, and responsible to the full spectrum of related stakeholders, not just shareholder profit.

Five years into our journey, that vision continues to guide us.

We remain as convinced as ever by our original theses: that purpose-driven brands are winning in the marketplace due to shifting demographics and increased transparency; that the alignment of values, culture, and an activist brand can be harnessed to create competitive advantages in the marketplace; that operationally oriented private equity funds outperform their peers; and that “systems responsibility” will increasingly be a source of competitive advantage for companies in the context of rising awareness of climate change and finite global resources. We see evidence of that in the data, the market, our deal pipeline, and in our portfolio.

Two forward-looking businesses in our portfolio are B Corps that also earned 2019 Best For The World honors: MPOWERD, a company committed to creating simple, innovative clean energy products that help to provide easily accessible light to the nearly 3 billion people around the world still living with intermittent or no access to the electricity grid, and Traditional Medicinals, a pioneer of the wellness tea category that has a long-standing commitment to positive social and environmental impact through sustainable production practices and engagement with the often impoverished and indigenous herb-sourcing communities around the world.

We reached out to these companies directly to hear how a net-positive impact investing model has created a ripple effect in their own operations and the world at large.

Why do Best For The World companies matter?

MPOWERD: Striving for net-positive impact, shown by our Best For The World honor, is fundamental to what we do every single day. Similar to the U.N. Sustainable Development Goals, the opportunity to increase your input and compete to do good and to be recognized for that is always helpful in staying focused. Doing good, gaining interest in doing good, and thus creating a societal awareness around doing good is what a true sustainable movement looks like. B Lab is fostering this impact-oriented activity through honoring its Best For The World B Corps.

Traditional Medicinals: First, we’re all companies and, by definition, companies are competitive — so what’s the harm in competing with others to do the most social good? That’s a healthy competition! More importantly, each B Corp isn’t trying to get the best score as much as trying to improve its score (regardless of how the competitors are doing) year over year. There is a popular saying in business, “You can’t manage what you can’t measure.” The B Impact Assessment that B Corps pass in order to certify enables us to measure our impact year over year, so we can better manage it and, thus, continue to improve our impact (and score) each year.

What are some of the practices you have in place that you believe helped you earn this honor that other companies could learn from/perhaps implement to spread the movement?

Traditional Medicinals: We operate in the natural/specialty-food business where many companies purchase ingredients from third-party brokers or distributors and use third-party co-packers to manufacture their products. At Traditional Medicinals, we are buying 120 different herbs from 250-plus farms in 40 countries on six continents. We bring each of those herbs to our own manufacturing facility in Sebastopol, California, where we make every bag of tea. We control our product from the field right up to our consumer’s shopping cart.

With that breadth of control, we can positively influence the social and environmental practices of every step it takes to make a cup of our tea. We are in these growing regions all the time, and we are in our plant in California every day. This makes a huge difference for us in terms of impact along our supply chain compared with other companies in our industry.

MPOWERD: Our impact is literally built into our business model. The more product we are able to sell into developed-world retail at healthy margins, the more we are able to reduce pricing and sell to those who require lower price points in emerging markets and emergency-response situations. In other words, our impact is not a separate function, but is an end result of our success.

We are a consumer product goods company addressing global challenges, and we build community and participation through consumers, vendors, retailers, corporations, and other brands. We consider ourselves private servants filling the void left by our public servants of today. To date, we have impacted 3.3 million people without access to clean, reliable energy, and 680,000 U.S. tons of CO2 have been averted in our deployments to more than 680 NGOs and nonprofits.

What value lies in the fact that a firm that invests in your company also earned a spot on the Best For The World lists?

MPOWERD: To achieve the scale of change that MPOWERD is attempting is nearly impossible to do alone. There is power in backers of your mission, both strategically and literally. We have had many invest in our company, and a lion’s share of them did so because they felt they were contributing to a vehicle for change and positive impact. The alignment of The Builders Fund and MPOWERD, both as B Corps and both recognized by B Lab as Best For The World, indicates that the business ecosystem is changing and sectors are coalescing for the greater good.

Traditional Medicinals: The single biggest reason there is friction between investors and companies is because they are not aligned. With both Traditional Medicinals and The Builders Fund being B Corps, there is inherent alignment. With proper alignment, everything else can be worked out. Because of our B Corp alignment, we each know our heart is in the right place, enabling us to always assume positive intent. With that alignment, all things are possible — and without it, very little is possible.

 

Share
Go Back to Stories