19 Sep Clarendon Fund Managers Achieves B-Corp Accreditation
Clarendon Fund Managers is now the first Investment Manager on the island of Ireland to be B Corp UK accredited! This accreditation process means that our business acts and looks very differently to what it did before. We trust that this ‘new way’ will have a positive and sustainable impact on our relationships with our staff, investee companies, funders and other stakeholders.
Brian Cummings gives a really good overview of the ESG landscape and our rationale for achieving this accreditation below.
Tue 18 Apr 2023 at 06:00
The intense scrutiny and strong reaction to the UK Government’s updated net zero strategy when it was released last week, was indicative of just how important climate change issues are now being taken, not just by environmental groups, but in all aspects of society.
That includes business, where sustainability credentials are becoming increasingly critical for organisations who want to remain relevant and competitive.
That’s because companies are now being scrutinised at all levels when it comes to sustainability and asked to share exactly how they are implementing sustainable practices.
From the suppliers they use, to their banks and investors, businesses must now be able to clearly show their commitment to sustainability, not just produce a mission statement.
The climate crisis is in the public consciousness and consumers increasingly want to do all they can to play their part in helping the environment. The Deloitte Sustainability and Consumer Behaviour survey 2022 found that more consumers than ever (40%) are choosing brands that have ethical or environmentally sustainable practices and values.
Not only is the pressure coming from consumers for businesses to prove their sustainability claims, the latest EY Global Corporate Reporting Survey shows that 78% of investors want companies to focus on environmental, social and governance (ESG) activity, even if it hits short-term profits.
The survey revealed that almost all investors (99%) who took part, said that ESG reporting is a crucial part of their investment decision-making, but three quarters felt that organisations are highly selective about the information they provide.
What’s become clear is that it’s no longer enough for a business to say they take sustainability seriously, this needs to be backed up with evidence.
At Clarendon Fund Managers, we recently achieved the B-Corp certification to showcase our commitment.
Certified B-Corps are businesses that meet the highest standards of verified social and environmental performance, public transparency and accountability to balance profit and purpose.
B-Corp’s mission is to transform the global economy so “all stakeholders, not just shareholders, are valued and prioritised” and our experience of the B-Corp process was that no stone is left unturned.
Their rigorous review of our business operations over the course of a year scored our environmental, social and governance operations and processes against set criteria.
The result has been changes to our operations and processes and a change to our articles of association — our DNA — to not only focus on the success of the company, but also to state that our business should have a material positive impact on society and the environment.
Our team were already doing a lot of good things, including volunteering, but we were inspired to achieve the certification by our portfolio company The Boatyard Distillery, who were asked by a number of their customers and suppliers whether their supporters and partners were B-Corp certified after winning the accreditation themselves.
Boatyard’s experience showed us that it is not just at multinational level that those questions are now being asked — customers and business partners at all levels want assurances about sustainability credentials.
Clarendon Fund Managers is the first Investment Manager across the island of Ireland to have the B-Corp certification and we believe that it is critical to our business going forward in order to remain attractive to our own investors and the companies we fund.
There are six other ‘B-Corps’, which are headquartered in Northern Ireland with sixteen head quartered B-Corps in the Republic of Ireland and over 1,200 in the UK.
According to research by the Association of Investment Companies (AIC), investors are becoming increasingly sceptical of the sustainability investment claims made by fund management firms. The B-Corp certification will help to address any such scepticism.
As we continue to manage VC funds in Northern Ireland and put sustainability at the centre of what we do, B-Corp will also inform our investment strategy and we will be looking further into supporting companies who have a positive impact on the planet.
My advice to any business out there looking to raise funding in the coming years, even if that business is at a relatively early stage, is that they will need to be able to demonstrate that they are actively thinking about ESG, build sustainability into their reporting processes and have a roadmap to gaining the right credentials clearly stated.
The focus on ESG is going to be driven from the top down through government legislation, investors, banks and other corporates, but it is already a key requirement at all levels of the business food chain.
Brian Cummings is investment director at Clarendon Fund Managers