Tag Archive for: green loans

Being a B Corp attracts investors

Becoming a B Corp reaps a host of benefits, one of these is greater access to investment capital, loans and growth funds. We call it the double whammy ROI of B Corp.

According to B Lab UK, 70% of B Corps that seek equity finance end up raising the amount they want, compared with 56% of all companies.

Why? In a nutshell, more financiers, bankers and investors won’t work with companies lacking a sustainable strategy. These investors are under pressure from a range of stakeholders, including consumers, who are demanding better ESG performance from businesses. B Corp certification can therefore enhance a firm’s credibility with investors seeking sustainable returns.

According to Morgan Stanley, the growth of sustainable finance in the next decade will be driven by three main trends:

  • Expect a greater diversity of sustainable investing strategies across assets and themes, partly driven by growth trends among Millennial investors.
  • The net-zero transition will change approaches to land use, in order to satisfy demand for renewable power, metals and minerals and nature-based solutions.
  • A proliferation of regulations and voluntary standards across the world will reshape corporate strategies, disclosures and availability of data.

It’s about more than just avoiding the big polluters of the world; investors are actively seeking to invest in businesses with solutions to our biggest challenges. This includes renewable energy, energy efficiency, water technology, social housing, and more.

In recent years, we have seen a tectonic shift of capital. At the beginning of 2020, the value of sustainable investment in major financial markets globally stood at $35.3tn, according to the Global Sustainable Investment Alliance (GSIA), and accounts for 36 per cent of all professionally managed assets across the US, Canada, Japan, Australasia and Europe. The previous two years alone saw growth of 15 per cent, the GSIA said. Actions and ambitions towards decarbonization have also increased. This is just the beginning – the tectonic shift towards sustainable investing is still accelerating.

Here are some examples of how sustainability is shifting the economic landscape…

  • In 2023, the Dow Jones Sustainability World Index (.W1SGIGTD)had a total return of 21.7%, compared to returns of 17% for the global broad market (.SBBMGLU).
  • Kiwi B Corp Kathmandu secured a $100 million loan from ANZ under the condition that they maintained their B Corp Certification
  • UK B Corp Coutts Private Banking and Wealth Management firm says ‘responsible investing’ is one of three key factors consider when deciding where to invest clients’ money – along with managing risk and managing costs.
  • Most banks now offer green loans. For example, the ANZ Business Green Loan lends amounts of up to $3 million to help businesses invest in their sustainable goals.

Around the world, institutional investors, bankers, private equity and angel investors, are demanding higher sustainability credentials from the companies they support financially.

That’s where B Corp Certification comes in. As an independently verified certification, it’s the gold standard and gives credibility to ethical claims.

It offers investors an easy way to spot a truly sustainable business from a greenwashing fake one that’s just saying the right things but not doing anything.

In summary, having the B Corp logo is a clear sign to prospective investors that your firm is committed to ethical practices. It gives your business an edge over non-certified competitors when you’re looking for loans, seed funding, growth funding, or other capital investment.

Is your organisation ready to B Corp?

Certified B Corps are a new form of business that seeks to value people and planet while making as much profit as possible.
If you think B Corp might be for you, check out our free e-book “2B Or Not 2B: The What, Why & How Of B Corp Certification” here.