Why B Corp? Certified B Corp Aligns with NEIF's Mission
Author: Peter Krajsa
The National Energy Improvement Fund (NEIF) was founded with two primary missions: to help increase the affordability of essential energy efficiency improvements for homes and businesses by providing trusted and transparent financing options and to support the growth of reliable, ethically-sound contractors who install these improvements.
I come from a family of immigrants and dedicated entrepreneurs. My parents believed that a successful business provides a product or service that contributes positively to society, gives back to the community, fosters a supportive and collegial work environment and makes a fair profit – in that order. Matthew Brown, Laura Nelson, and I share that vision and that’s why we organized NEIF as a for-profit benefit organization – a company with a mission, a soul and a purpose. Our principles are built into our operating agreement and constantly inform our decision-making process. To amplify our commitment, NEIF went through the additional rigorous evaluation process to obtain Certified B Corp™ status. This means that the nonprofit B-Lab, the international certification body, has verified that NEIF meets or exceeds its standards for overall social and environmental performance, public transparency, and legal accountability.
The Allure of B Corp Status
Recently there has been increased interest in B Corps™. There are over 4,500 Certified B Corps around the world and B-Lab Global reports that they’ve received 6,000 applications since 2020 — a 38% increase compared to 2018-2019. Joining this group declares a corporation’s stand for a host of positive beliefs and actions including, but not limited to, diversity, inclusion, equity, and environmental justice. In other words, becoming a B Corp™ organization demonstrates the company’s intent to be a “force for good.” NEIF chose this path altruistically, as we also realize and appreciate that it gives us a difference in the marketplace. Currently, NEIF is the only dedicated energy efficiency lender in the US which holds Certified B Corp™ status.
Consumers are increasingly making buying decisions based on their alignment with a company’s philosophy and business practices, choosing companies and products that they view as trustworthy. Many investors, while still intent on maximizing their returns, are also looking at the societal impact of the companies they invest in. NEIF has found its Certified B Corp™ status beneficial when dealing with government entities, foundations, contractors, and utilities. We are able to document, in real numbers, contractor growth, impact on energy efficiency, job development, and more.
B Corps™ are often lumped into the current ESG (environmental, social, and governance) investment trend. While the intent may be similar, there is one major difference. B Corps™ are held to a universal standard for measuring performance and generally ESG funds are not. This lack of uniform standards results in different ratings among ESG agencies, often for the same companies. Typically, ESG criteria is used to screen out sub-par performers while B-Labs selects Certified B Corps on their contributions to a sustainable and ‘equitable’ future.
The Certification Process
While a company may organize as a “benefit” organization in over 30 states, any legally organized business is eligible for Certified B Corp™ status. Companies are not required to offer a product or service in any specific sustainable category. The idea is more about how your business is conducted, how your employees are treated, and if energy and the environment are considered in the course of business.
In the bigger picture, the fee for Certified B Corp™ status is not prohibitive for even a smaller business, but if your company is not prepared with the necessary policies and documentation, the costs could escalate. The pathway to certification varies and depends on many factors. A company has to have been in business for a minimum 12 months prior to applying for certification. A B-Impact Assessment – an appraisal of the company’s impact on its employees, customers, community, and environment – must be completed.
As a regulated lender, NEIF already complied with much of the disclosure and financial reporting requirements for Certified B Corps™. And as part of its organization NEIF had worked with legal counsel to develop compliant policies and procedures covering such items as sexual harassment, workplace protocol, substance abuse, etc. Every company needs to have an up-to-date employee manual. We then took the further step to engage a web-based platform for additional compliance content, training, and tracking. In our preparation for B Corp™ certification we were pleased with our general organization but discovered some areas that had not been addressed fully and made the required adjustments. The entire certification process took several months and re-certification is required every three years. NEIF is currently in the midst of the re-certification process.
NEIF aligns with the B Corp™ model because a certified B Corp™ company acts in the interest of both profit and principles. While some companies act solely in the best interest of their shareholders to maximize return on investments, a B Corp™ transfers the focus to the needs of employees, suppliers, contractors, the community-at-large and making a profit.
Peter Krajsa is the Co-Chair and Founder of NEIF. A recognized innovator in energy efficiency finance for over 20 years, he spearheaded the creation of a number of major national energy finance programs as CEO of AFC First Financial Corporation, a company founded by his parents in 1947, a specialty residential energy efficiency lender, operating programs nationally with a network of over 6,000 participating contractors. Most recently, he headed national channel business development for the innovative energy lender, Renew Financial, which acquired AFC First in 2015, as part of its national expansion plans. Mr. Krajsa can be reached at email@example.com.