What Prompted AE Works to B the Change & Become a B Corp? Posted on May 27, 2016 by wpengine Share this post Pittsburgh is home to four B Corps, businesses that have taken social and environmental factors into their business plans. With a traditional business, shareholders can challenge management decisions to maximize profits. When a business becomes a B Corp, shareholders no longer have that legal authority. This is a fascinating way to structure a corporation and often attracts shareholders despite the diminished power they wield. The GTECH Social Capital Council is a cadre of energetic and socially-conscious professionals who actively support and promote GTECH. It is a way for those who don’t necessarily work in the social sector to connect with community development activities, green economy issues and other sustainability projects. One of our council members AE Works, an architectural and engineering firm has taken an unconventional leap to incorporate social and environmental factors into their for profit business model. We wanted to better understand why a corporation would decide to become a B Corp and the affect on shareholders and employees. We sat down with Social Capital Council Member JoAnn Rizzo, Eco Chair of AE Works to learn more. What do you see as the difference between Corporate Social Responsibility and being a B Corp? JoAnn: Corporate Social Responsibility (CSR) and B Corp are very different. CSR is a mechanism for extending the concern of the company into the community via efforts by the company from charitable donations to volunteering. CSR is mainly an external reach with little to no change internally. B Corp is a direct change to your corporate structure, which then has an impact to the internal operations that then extend to the externalities. B Corp is a commitment to change that is deep into the company’s philosophy and impacts its value proposition. CSR is great, but limited in impact as compared to being a B Corp. What most prompted you to apply to become a B Corp? JoAnn: In October 2013, AE Works officially adopted a triple bottom line (TBL) business model, focusing on developing social and environmental capital concurrently with technical capital. To strengthen the firm’s TBL and reason for existing, AE Works became a certified a B Corporation. B Corp provides a metric-based framework to help in the continued evolution of AE Works and our aspiration to create the world that we envision. Becoming a B Corp and maintaining that status challenges us to be the company we want to be. AE Works’ full B Impact Report is available here. The initial B Lab assessment helped us better identify areas where we where we can improve and helped us establish metric-based goals. I was also a bit surprised that Pittsburgh is only home to four (4) certified B Corporations and that most people have never heard about the certification. There’s a huge opportunity to not only build awareness about what it means to be a B Corp, but also create a local community in Pittsburgh to work together to make an impact. – JoAnn Rizzo, AE Works Do you think and/or find that it’s easier to retain talented, dedicated employees because they care about the company’s mission? JoAnn: Yes, since our B Corp certification, we have had new hires seek us out. In addition, we have strong employee retention with nearly 40% of our team including tenured five and six-year staff members. As a small business celebrating nine years in business (May 14th), this is something that we are especially proud of. AE Works exists to create a world where everyone is relevant. Aspiring to that reason for existing, AE Works offers a chance to grow, challenge oneself and experience meaningfulness in work. The company’s benefits and focus on opportunity positions each staff member to experience personal satisfaction and growth. Our TBL business model offers everyone the freedom to work on projects that they can find meaning in. Staff can enhance their technical architectural and engineering skills while working on projects to pay it forward, reduce firm footprint and learn something new to contribute to team development. Margaret Blair, a former senior fellow in the Economic Studies Program at the Brookings Institution, now at Vanderbilt Law, points out, “Many of the firms that have sprung up in [the technology and Internet industries] are led by entrepreneurs who say, and ‘I have no intention of maximizing shareholder value. I’m investing for the long-term, and I’ve demonstrated that I have better ideas than you [the outside shareholders] do.’” Do you see this kind of attitude in your business, your industry or yourself? JoAnn: Our President and CEO, Michael Cherock, PE is always asking, “do you have the endurance for long-term thinking?” Working toward our vision to create a world where everyone is relevant is something that requires both a focus on the day-to-day and also a long-term focus to understand the impact that those daily decisions and actions will have on our work toward our vision in the future. In the past year, PNC Financial has decided to stop funding coal-mining companies that participate in mountaintop removal, and Bank of America is reducing its “financial exposure” to the coal sector. Do you find that today’s shareholders are indeed concerned about the social and environmental impacts of the activities of the companies in which they invest? JoAnn: Yes, definitely. This concern manifests itself in tangible requirements like LEED certification. And the attention on social and environmental impacts is also central to our business development. Clarity of our ideal partners and clients, those organizations whose values align with ours has been a critical focus to not only assess risk, but also create opportunities for growth. Born out of shared values, these relationships potentially present us with future work opportunities where we can find meaning in our work while helping others through architecture and engineering. Do you retain more of your earnings to reinvest in your additional priorities than you would if you were not a B Corp? JoAnn: Our TBL business model and the B Corp focus on metrics provides framework for our decision making. In addition to profit, our strategy and decision making processes focus on understanding how we can build social capital and conserve resources to build environmental capital. As one example to demonstrate our triple bottom line approach to decision making, we recently added a company van and dedicated driver to support our team in project-related travels. This safer ride has increased productivity and overall well-being on the road while reducing our carbon footprint associated with meeting travel. Additionally, we continue to make investments in technology to provide tools to enhance collaboration remotely without travel. We also have flex hours, work from home and bike racks to support a flexible work culture that also reduces mileage associated with commuting and work travel. What are some surprises you’ve encountered along the way? JoAnn: We have had the opportunity to meet great people and do some great things. We’ve participated in several B Corp / social impact business panels with partners such as GBA, helped a fellow architecture firm in Portland, OR make the case for becoming a B Corp (they just received their certification!), and received recognition, including the 2016 Annual Sustainable Small Business Award from Duquesne University’s Center for Green Industries and Sustainable Business – and that’s just a snapshot! One especially meaningful project that we participated in last June was the global B Corp “B the Change Campaign.” For the B Corp community, the challenge was 1,100 volunteers and 4,000 hours. At AE Works, our challenge was 100% team participation. We exceeded our goal with over 190 hours! During this challenge, our team sorted medical supplies to be delivered to communities in need, cleaned up the street near our office (29 bags of trash/debris), sorted clothing for a Veteran suit drive and assembled care packages for troops serving overseas (over 236 pounds donated and shipped). These projects energized staff members with renewed focus on their work, inspiring others to use the power of business for good. About AE Works: AE Works exists to create a world where everyone is relevant. An architectural and engineering firm, our product is buildings, spaces, and systems – all designed by people for people to enable others to do what they do better while working to improve our collective world.