A different type of business in the heart of the financial system
Best For The World 2019 honouree, Tribe Impact Capital, repurpose 20% of profits to tackle the world’s most pressing problems
By Amy Clarke, Co-founder & Chief Impact Officer at Tribe Impact Capital
Best For The World honourees are recognised for achieving a verified score in the top 10 percent of all Certified B Corporations on the B Impact Assessment. To find out more about the list categories for Best For The World, click here.
When we first spoke about establishing Tribe, we knew we wanted our business model to be different. We wanted to showcase the opportunity for a different type of business in the heart of the financial system. A business that not only focused on creating long term change through its core product, but one that also governed itself to deliver that change.
This meant we knew we would be a B Corp from the very beginning. We also decided to write a clause into our governing principles that would lock at least 20% of our profits into impact investments every year. As a Best For The World honouree in Overall, Customers and Community, we know this profit lock is now a highly visible and valued part of our business’ identity.
A profit lock enables us to do something very important: create circularity in our business. By committing to share profits, we create a feedback loop in our business that compliments the investments we make on behalf of our clients. What does this mean? It means we will be able to offer blended capital into the impact ventures that we deem to be tackling some of the world’s most pressing social, environmental and economic challenges. We do this by repurposing the profits we generate from creating change back into creating more change.
The guiding ethos for us at Tribe is to seek out the projects that will drive the change we need and create the biggest possible impact. We will always look for the projects where capital is most needed (for example, a tiny fraction of all philanthropic funding in the UK goes to environmental causes) and for the interventions that will create the most tangible, scalable and/or replicable change.
As a B Corp, we want to support the wider community in as many ways as we can so creating this type of profit lock was, for us, an easy decision. Easy — though not without debate. ‘Where do you draw the line?’ was probably the most discussed topic. ‘10%? 50%? Should the line be static?’ We opted for a minimum line in the sand below which we wouldn’t dip. This is, at partner discretion, movable on a year by year basis taking into account market opportunities and the level of profit.
The implementation process itself was quite easy. As a partnership, we’re owned by a handful of executive partners and values-aligned investors, all of whom have signed up to this — it’s part of our DNA and, therefore, theirs. Given we were writing the B Corp clause into our Members Agreement at the same time, adapting the agreement to reflect this commitment was a fairly straightforward task.
I should add that I speak with the benefit of having deployed this governance structure from the word go. Retrofitting a business is a very different beast. I’ve spent a large part of my career retrofitting businesses through the lens of sustainability and it’s not easy. Having said that, the rewards when change happens are incredibly profound.
At Tribe, we didn’t have to deal with existing governance frameworks, incumbent management anxieties, and the huge task of shifting corporate culture and core business lines. But change in these businesses is possible, so for anyone reading this sitting within a large business, don’t panic. If Danone and recently certified B Corp Lombard Odier (one of the world’s largest privately owned asset managers) can signal a change in corporate culture and business strategy, it is possible for everyone.
My advice for anyone thinking of creating a profit lock is to think of the bigger picture. In isolation a profit lock can look like a glorified Corporate Social Responsibility (CSR) scheme and may expose your business to accusations of superficiality. Whereas, a profit lock as part of a strategic shift in direction, or as part of a governance model built from scratch will help you achieve your mission and create real impact. It amplifies your values and communicates your purpose. It also creates interest in your business across the board and, most importantly, with your clients and your employees. It attracts the people you want in and around your business - those who care as much about your success as you do.
Best For The World Customers honourees are the businesses setting the standard for serving their customers. Best For The World Community honourees are businesses that believe success should be shared, through charitable giving, investment in diversity, and educational opportunities. As the top 10% of Certified B Corps across all impact areas, our Best For The World Overall honourees are leading the way in the B Corp movement, showing others not only what’s possible but how to make it happen.
A first step for businesses interested in measuring their social and environmental impact is by using the free B Impact Assessment tool. Any company wishing to certify as a B Corp has its performance assessed by B Lab across all dimensions of its business. These companies are on a journey of continuous improvement to ensure business leverages its power to be a positive force in the world.
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