What Financial Services Can Learn From Cristiano Ronaldo
That’s what Ronaldo had to say, holding a water bottle in the air during a press conference during the Euros earlier this year.
In a stance against the world-famous beverage brand, the decorated footballer – and advocate for a healthy lifestyle – withdrew two bottles of Coca-Cola from sight. He did so knowing full well that his actions were against “the rules” and would be seen by millions of people around the world.
Coca-Cola, which sponsored the tournament, didn’t do anything wrong here, it’s just that the brand no longer shared Ronaldo’s values. You might remember that he was once a Coca-Cola Ambassador.
This kind of behavior is more and more common. After all, people want to do business with companies they love; the companies they think will do the right thing.
So what can financial services gain from this?
As the CEO of a fund management company, I spend a lot of time thinking about how to build an even more reliable brand.
The industry is not exactly in great shape. In fact, financial services rank as the least trusted industry by consumers globally. He’s done it in each of the past 10 years.
One area that is a major exception is the relationship between financial advisers and their clients. Advisors listen to their clients and know what matters to them.
I see no reason why investment managers shouldn’t aspire to achieve the same levels of confidence. This would lead to a better experience for investors and allow advisors to recommend vendors with confidence.
But how can suppliers recreate this incredible relationship of trust?
I think a big part of the answer is for companies to understand their impact on the world and share the same values ââas their customers.
This is one of the reasons Octopus was awarded the B Corporation certification earlier this year.
What is a B company?
B Corp certification is a way for companies to measure their social and environmental performance. It helps a business understand its place in the world and align with what matters to its stakeholders.
AB Corp should regularly assess the impact of its activities on its stakeholders, with equal emphasis on employees, community, environment, customers and shareholders.
You may have come across certified companies in other industries that are passionate about responsible business practices, such as Patagonia or Innocent Drinks. It’s not just about âtrendyâ mainstream brands, as we’ve seen companies like Coutts Bank become B Corps as well recently.
Each certified company is assigned a score for each of the five stakeholders, all of which are publicly available. Eighty is the minimum total score required, compared to a median score of 50 for the average uncertified business. The certification process is repeated every three years, which means you can’t rest on your laurels.
Octopus certified with a score of 85 out of 200 possible, which means we have a lot of work to do. We had good results in the âemployeeâ category, for example. This reflects the importance we place on mental health, well-being and career development, among others.
Whereas, we still have room for improvement in the environmental category. Although we are the largest solar investor in Europe, we could do a lot more to reduce the environmental footprint of Octopus itself.
This is one of the reasons I think becoming a B Corp is so powerful, because it means your business is being reviewed and presented as a mirror by a third party, with a clear frame of where you still have work to do. To do. This level of responsibility naturally influences how you view running a business in a very significant way.
More importantly, having a company certified should give investors and advisors the confidence that they are dealing with a company that will act in their best interests.
How you might explain it to a client
Not all customers will be familiar with the concept of B Corporation. We have found that some advisers like to compare it to a Fairtrade mark that you might find on a product, only a B Corp certification assesses a company as a whole and its behavior.
The comparison helps someone quickly understand much of what is important in being certified as a B Corp: an independent assessment of a business, a requirement to balance profits with sustainability issues, and desire. to “do what is right” and to be a force for good.
Why Should Financial Advisors Care?
With a growing number of people looking to invest in sustainable businesses who understand their impact on the world, it is only a matter of time before investors are more interested in the companies they choose to manage their investments as well. .
This is why knowing that a financial services company is a B Corp should help you, because it gives you real reassurance that a company is worthy of the trust of investors.
This, in turn, should mean that financial advisers can recommend an investment provider with confidence, knowing that their values ââmatch those of their clients. It is also a good indication that a company is forward looking and well configured to serve investors over the long term.
I believe this is a one-sided trend. I expect more financial services firms to follow in Octopus’ footsteps and also become B Corps – both advisory firms and investment providers. The industry will be all the better for it.
Ruth Handcock is Managing Director of Octopus Investments.