An age old motto is: practice what you preach – but how many financial services firms are environmentally-friendly, alongside offering ‘green’ funds and investment products?
Environmental, Social, and Corporate Governance along with sustainability have become buzzwords in the financial services industry in recent years.
However, it is difficult to separate firms with genuine commitment and those merely greenwashing.
Advice firm Progeny claims to be in the former camp and it is in the process of being certified as a B Corp – a tag which proves eco-credentials in five different areas.
The pandemic has delayed Progeny’s hopes of becoming a B Corp
After the pandemic and increasing talk of sustainability within the wealth management industry, chief executive Neil Moles has some ideas on how the industry will approach sustainability and whether B Corp could be the driving force behind that.
He tells This is Money: ‘If we want to talk to our clients about ESG and sustainability, if we’re not living and breathing it ourselves how can we recommend it?’
Here, as part of our new B Corp Beat series – focusing the spotlight on ‘green’ British companies – we find out more…
Few wealth managers are B Corp
While there are a growing number of companies looking to become a B Corp, there are very few wealth managers who have achieved certification.
The vast majority of companies in our B Corp Beat series so far have offered physical products – whether it be eco nappies or sustainable clothing – suggesting the process is perhaps not best placed to measure the impact of service providers.
Leeds-based Progeny is hoping to join the list of ‘eco-friendly’ listed companies. It has been on somewhat of an acquisition spree during the pandemic.
In February the advice firm snapped up Watsons Law before buying financial advice firm Affinity two months later.
Progeny chief executive Neil Moles
It’s now turning its attention to bolstering its sustainability credentials. Its website already boasts its commitment to charity and the community and it is a signatory of the Treasury’s Women in Finance charter.
So is B Corp just another one to add to that ever growing list? Does the certification risk becoming too diluted?
‘We don’t need to be judged by the kitemarks and accreditations that we’ve got. We’ve done it for the right reasons,’ says Neil definitively.
‘If you’re applying, running a business and the standards to that level because you want to do that then B Corp is a good natural thing to do.’
‘I think a lot of the questions do lend themselves more to people who manufacture or produce goods, because the potential impact on the environment is more wide ranging. I think it could be tweaked,’ says Neil.
‘We’re looking at an understanding of our impact on the planet and our communities is probably the starting point but it is different… We don’t create waste that goes somewhere, we’re not buying lots of different products, all we’re doing is bringing people from one place to another.
‘And it’s the impact of that on the environment and on society that needs to be measured from what we do.’
Industry is paying lip service to sustainability
Could this be why there are so few wealth managers who have achieved B Corp status?
Neil is unconvinced and thinks it is a reflection on the industry rather than the B Corp process.
‘You have to have a look at the wealth management industry and see how many genuinely want to run the businesses properly up to a B Corp standard,’ says Neil.
If we want to talk to our clients about ESG and sustainability, if we’re not living and breathing it ourselves how can we recommend it?
‘Maybe the tale of that is people will start following because it becomes the accepted norm.
‘I don’t it has yet in this profession at all but watch this space.
‘It will happen and as more and more of us do it, the rest will have to follow. It’s quite sad… it should be something you want to do not forced to do.’
The words ESG and sustainability are all over the industry right now.
Sustainable funds are all the rage but critics, including Neil, have labelled it as lip service.
‘For the most part not enough people are doing it properly… If we want to talk to our clients about ESG and sustainability, if we’re not living and breathing it ourselves how can we recommend it?
‘I think clients will start to push back and say well actually you’ve got none of these accreditations, show me your credentials in the ESG space.’
What is a B Corp?
In our new B Corp Beat series, we are interviewing British businesses which meet these strict standards.
They are described as businesses that are said to meet the ‘highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.’
One the website, it says: ‘B Corp Certification doesn’t just evaluate a product or service; it assesses the overall positive impact of the company that stands behind it. And increasingly that’s what people care most about.’
B Corp was started in 2006 and gives scores to companies in order for them to be verified.
These five areas are: governance, workers, community, environment and customers.
‘Ultimately I think it will be the clients and the consumer that push back on the industry.’
Neil reflects on Progeny’s own decision to become a B Corp, emphasising the firm’s dedication to the project.
‘We’re passionate about sustainability, we’re passionate about creating an environment where we’re trying to do our best… for the planet but also for our people,’ says Neil.
It sounds similar to other wealth managers’ mission statements on sustainability that have been doing the rounds in recent years and who Neil has criticised.
He is adamant that Progeny’s commitment to sustainability is not a PR exercise.
Running alongside its carbon neutral project, Progeny made its commitment to becoming a B Corp in November 2019.
One pandemic later and it is yet to receive official certification but the process has offered some valuable lessons.
‘You can’t control what you can’t. It was challenging for us to start looking at our suppliers, even the cleaning products our cleaning company uses,’ says Neil.
‘We had to look at different parts of the business in different ways and those bits that we potentially didn’t control properly… how we can take back control of those and look at our supply chain.’
He said his eureka moment came when he thought about how Progeny’s supply chains had an impact on the planet.
The biggest change for the firm however came in its collection of data of how the business operates.
‘That is what B Corp is all about: you go through a list of questions, throw out a list of additional questions and it’s about challenging whether you have the information or not and the knowledge about what these questions mean and how it impacts your business.’
‘I think you’re born out of what you’re doing, you build lots more better procedures around running the business, but it’s all built around that initial gathering of data and making sure that you do know exactly what’s going on in your business at all times.’
As a result his main piece of advice for companies, particularly service providers, considering becoming a B Corp is to find a project manager.
‘If you don’t, you’ll commit a lot of time and effort to it and not go anywhere. It’s not something you can just do on a Sunday afternoon, tick a few boxes and think I’ve done that, here we go…
‘It takes hours and hours and hours of meetings and gathering data, updating it, reviewing it and going again. So don’t underestimate it.’
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