Why B Corp commitment builds business resilience
In a volatile economic and geopolitical environment, tech businesses can be tempted to focus solely on their bottom line.
When key markets like the US are looking to minimise the importance of ESG, it can feel easier to turn a blind eye to environmental and social commitments and instead focus on immediate profitability.
But, as investor scrutiny on governance and data practices intensifies, those UK tech companies that are taking it seriously will unlock a competitive advantage. ESG commitments and certifications, like B Corp, are not only evidence of good business, but they can be a precursor for stability amidst volatility.
According to a report from B Lab, UK B Corps were 63% more likely to survive the 2008 crash than their peers. So it follows that those taking their ESG commitments seriously now will reap the rewards long-term, even in a landscape of uncertainty.
Value creation through ESG
As the UK’s most active equity investor, value creation sits at the heart of what we do. It’s not just about traditional business growth metrics like revenue growth, headcount, physical footprint or market share. Instead, it’s about profitability, efficiency and innovation. We believe these go hand-in-hand with ESG.
ESG is a core component of value creation. It’s about developing strong internal controls, risk mitigation strategies, sustainability initiatives and other environmental, social and governance best practices that a business can refer to as it grows.
BGF supports portfolio companies at different stages of ESG maturity, from those starting out to those pursuing more advanced certifications such as B Corp. This support begins with establishing an ESG baseline during due diligence and continues through to an annual ESG assessment. Throughout the year, we provide practical support through workshops, webinars and our in-person ESG Forum.
For us, ESG strategy isn’t a nice-to-have – it’s a clear indicator of good business. That’s why in 2023, we became B Corp certified ourselves.
B Corp is an incredibly rigorous process that addresses every area of the business, including Governance, Workers, Community, Environment and Customers. While a challenging process, we believe it is a marker of value creation – and so do plenty of our portfolio companies.
Purple’s B Corp journey
Headquartered in Manchester, BGF-backed Purple has built a platform that makes WiFi secure, seamless, and available everywhere. Its identity-based networking powers guest WiFi, staff connectivity, and multi-tenant environments across hospitality, retail, transport, healthcare, higher education, and enterprise: serving more than 1,000 customers worldwide. Looking ahead, the Purple app extends that reach further, connecting users seamlessly across 80,000+ venues and millions of WiFi hotspots globally.
In October 2023, Purple received a £10.5m investment from BGF to support its continuing global growth trajectory and product development. By July 2024, Purple was certified as a B Corp.
Gavin Wheeldon, CEO at Purple, explains: “To my mind, B Corp is the best in class standard around ESG. It’s a rigorous process, and one that allows us to measure ourselves against the best companies in the world.
“We’d started having conversations with BGF shortly after investment, and it turned out that they were on the journey too, which was a moment of serendipity.
“BGF’s ESG team were hugely supportive as we went through the process, providing practical advice around how to identify and progress our key ESG priorities, through webinars, education sessions and focused workshops, as well as using due diligence findings to identify priority gaps and areas for action.
”They introduced us to contacts across their portfolio who could support our ambitions across DE&I and reducing our environmental impact, whether with specific software or sharing experience and insight. This also allowed us to benchmark ourselves against similar companies in the BGF portfolio, opening up learnings and recognition where they were stronger.”
The B Corp journey is not just a one-off exercise for Purple. Since certification, it has publicly reported progress through its Positive Impact Report, using B Impact Assessment findings to identify gaps and priorities, and by tracking data in areas such as diversity and environmental impact. This has led to several transparency-led actions, which include:
• Sharing commercial and financial reporting with employees, with openness and transparency part of Purple’s culture• Setting out clear priorities for improvement in the year ahead• Publishing and tracking impact-related commitments.
Wheeldon continued: “Every year, we also participate in BGF’s ESG assessment, which was incredibly useful to benchmark our strengths and areas for improvement compared to companies in similar sectors.
“BGF was also open about their own processes and ways of working, especially around employee questionnaires and working groups, which we were able to learn from and adapt based on our needs.
“Having a partner that’s gone through the process, and was willing to share their experience, insight and connections made all the difference on our B Corp journey.”
Better business and real rigour
Almost all small to medium-sized businesses have the ambition to do the right thing when it comes to ESG.
What most don’t have are the correct frameworks, skillsets and timelines that allow them not only to do good business, but also to measure and report on it.
For tech businesses, in particular, this is critical. As companies grow from startup to scaleup, operational and ethical frameworks often lag product development. B Corp certification forces tech companies – and any company – to create robust frameworks and stick to them.
Because B Corp requires deep transparency and governance, it creates internal rigour. Decisions can be made more quickly, and risks can be managed more accurately, because businesses have a much clearer idea of their commitments when it comes to Governance, Workers, Community, Environment and Customers. From an investor perspective, these can only be good things.
From good intentions to certification, together
The B Corp process can be daunting, particularly when it comes to data reporting.
But, like with many things, there’s strength in numbers. We bring together businesses within our network that want to do better business, but don’t know where to start.
For most of our portfolio companies, they’re already on the right track. Our role is in demystifying ESG. We host workshops of like-minded companies and help them identify what matters to them and their stakeholders, define their governance structure and set clear KPIs to measure progress. More specifically, we provide:
• Gap analysis informed by due diligence findings• Support with double materiality analysis• Broader learning through webinars and the ESG Forum on topics such as employee engagement, cybersecurity and community impact
We’re also able to provide portfolio companies with benchmarking through our annual ESG survey. It gives them a chance to measure their own progress, but also to see where they rank amongst similar companies.
Maintaining B Corp status is just as important as taking the first step. Momentum is key, as too is preparing thoroughly for recertification. This is an ongoing journey that doesn’t just end at initial certification. As we work through newer and more demanding B Corp standards, as part of our own recertification process, this experience further strengthens the support we provide to portfolio companies, helping businesses like Purple to understand the new requirements and prioritise the actions needed ahead of recertification.
More than a badge
B Corp is more than just a badge, it’s evidence of best practice and operational rigour – a framework for visibility, accountability and continuous improvement.
In uncertain times, it can be tempting for tech companies – indeed, all companies – to focus on their bottom line, at the expense of good business practices. That is short-term thinking and represents a fundamental misunderstanding of what drives resilience and long-term value creation.
ESG strategy, whether evidenced by B Corp accreditation or otherwise, provides the rigour needed to protect a company, no matter the volatile environment it finds itself in. And from where we stand, it is already becoming the key driver in value creation for the long term.
Businesses that ignore it do so at their peril.
