The B Corporation A New Kind of Company For a New Sector of the Economy

1. The B Corporation A New Kind of Company For a New Sector of the Economy A Conversation with ACG Philadelphia February 18, 2010

2. Quick Background • 3 Co-Founders with successful 15 year private sector careers as Entrepreneurs, Operators, Investors MSD Capital, L.P. $13B Private Equity $250 MM Brand

3. B Lab - Overview 501(c)3 non-profit which certifies and supports B Corporations Objective 1: Expand corporate accountability through new legal framework Objective 2: Drive social and environmental impact through standards

4. What is a B Corporation? • The B Corporation is a new kind of company which uses the power of business to solve social and environmental problems • Meets higher standards* of social and environmental • performance, accountability, and transparency • Amplifies voice for a diverse marketplace • through the power of the unifying B Corporation brand • - B stands for Benefit * B Lab is the nonprofit which certifies and supports B Corporations.

5. B Corporation – Performance Standards B Impact Rating System • Free web-based tool • for impact assessment • and improvement • Comprehensive • Transparent • Dynamic • Independent • 5,000+ users • 80 out of 200 points • for certification

6. B Corporation – Legal Standards B Corp Legal Framework • Amend Articles of Incorporation requiring companies to • consider of the impact of decisions not only on shareholders, • but also stakeholders • Benefits • - protection for Directors to consider non-financial interests • - accountability to shareholders to uphold new standard of conduct • survives new management, capital and ownership • no additional liability from non-shareholders

7. Significant Momentum - Companies Companies Diverse and growing community of leaders Financial Services Consumer Products Business Services Energy/Tech.

8. Significant Momentum – Media Media Receiving fair share of press

9. Objective 1 – New Legal Framework Policy Makers Infrastructure and incentives for a New Economy • Benefit Corporation legislation • new corporate form with higher standards of corporate purpose, accountability, transparency • 2010 : VT, MD, NY and PA possible • 2011: CO, NC, OR • Incentives for certified sustainable businesses • 2009: Philadelphia B Corp tax break passed ($500k/25 companies/5 years) • 2010: Respond to inquiries from cities and Champions

10. Objective 1 – New Legal Framework Benefit Corp Legislation – Major Provisions • Purpose • shall create general public benefit • shall have right to name specific public benefit purposes • (e.g. 50% profits to charity, carbon neutral, 100% local sourcing, serve the poor) • Accountability • directors and officers shall consider effect of decisions on stakeholders • shall have an independent Benefit Director • shareholders and directors have right of action (no third parties) • Transparency • shall publish annual Benefit Report in accordance with recognized standards for defining, reporting, and assessing social and environmental performance

11. Objective 2 – Drive Impact through Standards What is Impact Investing (SRI 2.0) • Generate both financial return and social and/or environmental value • Includes community development finance (CDFI’s), microfinance, Cleantech, and other triple bottom line businesses in industrialized and developing world • New investment grew by average of 35% over past 5 years • Sector has grown to over $50B in total assets • Projected to grow to 1% of total managed assets in 10 years, or $500B of capital flows to social and environmental impact

12. Objective 2 – Drive Impact through Standards Capital Markets Driving capital beyond SRI to Impact • GIIRS (Global Impact Investing Rating System ) • Indpnt ratings agency based on B Ratings System (S&P analog) • Fund Ratings and Company Ratings • Including companies in developing world

13. Objective 2 – Drive Impact through Standards Global Impact Investing Ratings System • Assess the social and environmental impact of private companies and funds using a ratings approach • analogous to Morningstar investment ratings or S&P credit risk rating • Allow for comparable measurement of positive impact across • investment products • developing and advanced economies, • industries, company size, and impact focus • Used by both institutional investors and investment intermediaries to • evaluate, screen, manage, and communicate the social impact of their sustainable private equity and debt investments

14. Objective 2 – Drive Impact through Standards Investors

15. Historic Opportunity • To create social impact through business and transform corporate accountability • Chorus of prominent voices • Gates, Creative Capitalism • Yunus, Social Business • Blood&Gore, Friedman, Sustainable Economy • Financial crisis

16. Seizing the Opportunity Building a new sector of the economy • Creates economic opportunity • Strengthens communities • Restores environment • Alleviates poverty Contractors Legal Clean Tech Food Hospitality Private Equity Wealth Managemt Home Apparel Education Building Industry Retail Architecture Restaurant Arts Telecom Media PR Comm Consulting Developing World Banks Marketing IT Real Estate Footwear Renewable Energy Biotechnology Personal Care Pharmaceuticals B2B B2C

17. Thank you • For your time • For your leadership and support