CDI goes B

As the climate crisis escalates and social inequality widens, businesses are increasingly held accountable not just for their profits, but also for their impact on both people and the planet. The B Corporation certification, or B Corp, is a prestigious label that denotes a company's commitment to balancing purpose and profit. It can be a stringent and taxing process, but it was something absolutely critical to our mission here at City Different Investments.

Stakeholder Value

One of the more problematic trends in the last 10-20 years is over-indexing toward shareholder value. Shareholders are of course vital to the health of a company and the markets at large. They own public companies and those companies have a fiduciary responsibility to work in shareholders’ financial interests. But as we mentioned earlier, too many companies (and investment professionals) feel forced into a short-term mindset that necessarily values immediate profits over things like research & development, reinvestment into the business, or our North Star — stakeholder value.

The idea behind stakeholder value is that a company should serve all its stakeholders, not just shareholders. Shareholders are a stakeholder, but so too are the employees of that company, the communities in which that company operates, and the planet at large. A stakeholder mindset permeates everything we do at CDI, which is why it was so important to seek out and attain the B Corp designation.

“We believe in having a social impact in our community, being transparent with our employees and clients, and setting high standards for ourselves as partners and human beings,” Joel Grimstad, our Chief Operating Officer, said. “We set out to establish new standards for how our industry operates and incentivizes employees – taking a long-term approach to everything we do.”

What is a B Corp

B Lab, the nonprofit organization behind B Corp certification, requires a rigorous evaluation process that measures a company's overall social and environmental performance, encompassing factors like worker treatment, community engagement, and environmental responsibility.

Every part of your company is put under the microscope. You have to submit to radical transparency by allowing information about your company’s performance, measured against B Lab’s standards, to be publicly available on your B Corp profile on B Lab’s website.

It's not just about using post-consumer recycled paper or throwing a few ESG ETFs into portfolio strategies — it's about demonstrating an intrinsic, company-wide commitment to serving stakeholders.

The challenge lies not just in scoring highly, but in the systemic changes that this score implies. Companies must adapt their legal structure to ensure accountability to stakeholders, often involving amending their articles of incorporation or similar foundational documents.

Furthermore, the certification isn't a one-and-done deal. B Corps must recertify every three years, continually proving their commitment to balancing profit with purpose. The ongoing scrutiny can be arduous, but it also ensures that B Corp status remains a true symbol of sustainable and ethical business.

For us at CDI, we have an independent board, a rigorous and transparent code of ethics, and a strong internal control structure. Our unwavering focus on our employees also shines through — we enjoy incredibly low turnover rates, foster and embrace a culture of freedom and responsibility, and empower our employees with maximum flexibility and equity. That means unlimited time off, a fully paid health care option, and employee ownership — 100% of our employees share in the firm’s profits.

To better serve our environmental stakeholders, “we partnered with Change Finance to give our clients access to a customized ESG-focused strategy,” Grimstad continued. “The ‘carbon-neutral strategy’ utilizes a unique approach to carbon offsets, purchasing carbon credits offered through regenerative farming practices, offsetting the carbon emissions generated by the firms held in the investment portfolios.”

So why did we spend two years going through all that just to get a certification?

…because we believe the B-Corp certification is more than just a badge — it is a powerful signal to clients, investors, and employees that we are genuinely committed to positive social and environmental change, and are taking actions to prove it, continuously.

Moreover, we believe B Corp status can provide a competitive advantage. Consumers and investors are becoming more socially conscious every year; as such, they are increasingly drawn to companies that can prove their ethical credentials.

But most importantly, we just felt it was the right thing to do. Stakeholder value is part of our ethos at City Different Investments. The “Different” means something to us, and earning our B Corp badge is yet another public symbol of how different we mean to be.

IMPORTANT DISCLOSURES
No discussion or information contained herein should be considered investment advice. B Corporations are for-profit companies certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency and aspire to use the power of markets to solve social and environmental problems. References to certification do not represent a statement of any City Different Investments client and does not describe any experience with or endorsement of City Different Investments as an investment adviser by any such client.

Visitors to the City Different Investments web and social media sites are asked to read these terms.