Bantam Earns B Corporation Certification
Ask any millennial how they think about food, energy, transportation, and climate change, and you'll get a sense of the change that's coming.
This month, Bantam has joined some of the world's most respected and successful companies, including:
- Ben & Jerry's;
- Eileen Fisher;
- Stonyfield Organic;
- Warby Parker;
- method, and;
- seventh generation.
Like these world-class firms, Bantam is now a Certified B Corporation®.
Chart 1: B Corporation Brands You Know and Love
B Corporations meet the highest standards of overall social and environmental performance, transparency, and legal accountability, and aspire to use the power of business to solve social and environmental problems.
The B Corporation certification process is very rigorous and it has taken over two and a half years for Bantam to become certified. This process involves scoring across four impact areas:
- Environment, and;
- Customers(where we score highest).
Please review Bantam's B Impact Report.
Being a B Corporation is not some far-out, hippie idea of communal corporations. B Corporations are for-profit, and the statistics show, 65 percent more likely to survive a recession. Furthermore, being a B Corporation is a tremendous advantage when courting prospective clients and for winning the war for talent.
Shockingly, it turns out that people prefer to do business with, and work for, firms that are not just looking to maximize profits.
Chart 2: Wells Fargo v. JP Morgan Stock Price Appreciation Since August 2016
As can be seen in Chart 1, above, since news of Wells Fargo’s client-abusive behavior broke in September 2016, the stock is down over seven percent (the white line). Over the same time period, industry peer JP Morgan’s stock is up about 101 percent (the green line).
Taking care of clients is good for business, as should be self-evident to everyone. Thinking any other way is false economy.
Bantam is a Dual-Level Fiduciary
As a Certified B Corporation, Bantam has deeper legal obligations to its clients than other investment firms.
We are a fiduciary twice over, first as a B Corporation, which must consider the interests of our clients pari passu with those of our owners, and second as a registered investment advisory firm, which is fiduciary bound in its investment recommendations.
This dual-level fiduciary status is unique in the investment world and gives us a tremendous competitive advantage.
Brokers have no fiduciary duty to their clients (but do have one to their firm's owners),registered investment advisors have a fiduciary duty to their clients, but also have one to their firm's owners, which is a conflict of interest.
It is only when you combine the fiduciary duties of a B Corporation with that of an RIA that the fiduciary waters run clear.
I wrote about the idea of purposeful capitalism in one of my first Bantam blog posts in February of 2018. The idea has gained momentum since then.
Last August, the Business Roundtable issued a "Statement on the Purpose of a Corporation", writing:
... we share a fundamental commitment to all of our stakeholders... Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, or communities, and our country. (Emphasis in the original)
I encourage the200+ CEOs who signed this statement to join Bantam in becoming a Certified B Corporation. Only then will their bromides be legally binding, and believable.
In the future, pure bottom line (or bare minimum compliance with laws and regulations) thinking will be as rare as it is prevalent today. It simply won’t be viable because consumers won’t stand for it.
No Way, Boomer
Ask any millennial how they think about food, energy, transportation, and climate change. They think very differently than the Baby Boomers and somewhat differently than GenerationX. At the core, they understand climate change, how it is woven into every facet of modern life, and how every consumption decision has impact.
Millennials are now age 23 to 38, they all vote. What most people don’t realize is that millennials are the largest living generational cohort, comprising 26 percent of U.S. population. To put this in perspective, there are 19 million more millennials than Baby Boomers.
Of course, Generation Z is coming up behind the millennials with similar views and their vanguard is age 22 and starting to vote.
Chart 3: Defining the Generations
Just like organic food labeling, consumers will want some level of assurance that the firms they do business with actually live up to the values they espouse.
Being a Certified B Corporation® does just that.
 Source: B Labs.
 Kate Rockwood; “The Unlikely Decision That Can Save a Struggling Business”; Inc.; November 2, 2017. Available at: https://www.inc.com/magazine/201711/kate-rockwood/b-corps.html; Accessed February 19, 2020.
 Source: Bloomberg.
 Business Roundtable; “Statement on the Purpose of a Corporation”; August 2019. Available at: https://opportunity.businessroundtable.org/wp-content/uploads/2019/08/BRT-Statement-on-the-Purpose-of-a-Corporation-with-Signatures.pdf; Accessed February 19, 2020.
 Boomers, Gen X, Gen Y, and Gen Z Explained; Kanasa; July 29, 2019. Available at: https://www.kasasa.com/articles/generations/gen-x-gen-y-gen-z; Accessed February 21, 2020.
 Michael Dimock; Defining generations: Where Millennials end and Generation Z begins; Pew Research Center; January 17, 2019. Available at: https://www.pewresearch.org/fact-tank/2019/01/17/where-millennials-end-and-generation-z-begins/; Accessed February 20, 2020.