Arma Karma is now a B-Corp business! What does it mean and how did we get here? We ask Arma Karma’s co-founder and CFO, Chris Frogner – who led the process.
We’re shouting about B-corp from the rooftops. Why is it such a big deal?
B-Corp is a certification that’s like fairtrade for business. It’s centred around the reality that businesses impact and serve more than just shareholders. You’re held to account on a number of things whether that’s governance or workers, to community, environment and customers.
And being a B-Corp means that you’re ahead of the curve on several things. For us specifically, some of the FCA rule changes that are coming in around treating customers fairly and consumer duty link into the standards set by B-Corp.
It sounds like there’s a lot to cover off there and it’s a pretty intense process?
It’s taken us close to two years; it is a rigorous process, and it can be a long process. This is partially because B-Corp has really taken off in the UK now. They have limited staff and there’s a lot for them to get through, especially with the rise in the number of businesses that want to go for the B-Corp certification.
But also, there’s a distinction between whether you’re trading or not. We weren’t actually trading when we started going through the process to become a B-Corp, so we went for something called “pending B-Corp status”. We were a pending B-Corp for a full year, so that obviously added a year onto our timelines.
In terms of the actual process, you go through a pretty big assessment of your business. They give you a score, you then have a verification interview, and you have various documents you need to upload to prove your processes, that kind of thing.
So, yes, it’s a rigorous process, but one of the benefits of doing it from the start when you’re a start-up means you can embed some of those standards from the word go. We actually wrote into our articles of associations that we exist for all our stakeholders, not just our shareholders, and that’s always been really important to us.
ESG (environmental, social and corporate governance) in general has been a big focus for us, and the fact that we’ve embedded that into the business from the get-go really makes sure we keep that focus on sustainability and the environment. As an industry, we have the power to change the track on building sustainable and environmentally friendly businesses.
So now all that’s done, you can just relax, right?
No, not quite. Standards take a lot of maintenance as they touch all areas of the business and operations. But by keeping on top of all these constantly, we’ll hopefully be well prepared for our re-certification which happens every couple of years. I’m hoping it’ll be slightly easier next time around as we’ve already laid the groundwork, but we’ll see.
What would be your advice to other businesses who are thinking of going for a B-Corp certification?
Don’t be put off by the process, just go for it. B-Corp is about perpetuating standards that are going to benefit real people, whether that’s staff, consumers or those in the wider environment like the natural world and the consumer landscape. Who doesn’t want that?
We get Arma Karma’s Board Adviser, Shân Millie’s thoughts on ethics in financial services in the future Society at large is increasingly unwilling to allow businesses to define what is a positive or negative impact, or what “good business” looks like. There can be a big difference between a publicised Corporate Purpose and how a firm actually runs its operations day to day.
I believe it should be a requirement for all tech and data-enabled firms, especially in the financial services, to define what ethical business looks like for them. And they should be ready for that definition to be challenged by a range of stakeholders.
A B-Corp Certification is a powerful incentive to do so. By committing to the process as part of a coherent strategy, Arma Karma find themselves pioneers right now. Ethics are at the heart of their ambitious growth plans, and my bet is that not very far from now, they will be seen as frontrunners in the movement towards the great reset of “business-as-usual.”
See Arma Karma’s B-Corp profile which details our impact score and take a look at other UK-based B-Corp businesses in the organization’s directory.
