Using B Corp to benchmark progress
Being a B Corp means balancing profits with purpose and considering the impacts of our business decisions on all our stakeholders, not just our shareholders. We have several engagement approaches across our stakeholder universe to ensure we stay apprised of our place in, and our impacts on, the broader ecosystem. Ultimately our goal is to operate a business where our people can thrive, where we limit our negative impacts on the planet, and where our clients and communities can benefit. As investors, we know this makes us better positioned to serve our clients for the long term.
The B Impact Assessment
As a B Corp, we can’t just say we have sustainable business practices. Every three years, we must recertify with the nonprofit organization B Lab. The certification process is a rigorous 200+ question assessment (specific to sector, geography, and size) covering the topics of community, environment, workers, governance, and customers. Once the assessment is complete, an intensive audit process verifies that questions have been answered honestly and accurately. If after the audit we score above 80, we can maintain B Corp certification.
The median score for ordinary businesses that complete the assessment is currently 50.9.2 Our most recent assessment was completed in late 2020 and verified in June of 2021. We scored 129.2, increasing our previous assessment’s score by 13.1 points. This verification shows that we meet the highest standards of third party-verified social and environmental performance.3 The B Corp assessment serves as a useful benchmarking tool to set goals and improve ESG performance over time.
B Corp certification requires the adoption of a legal framework to help protect mission through capital raises and leadership changes. For most companies, the requirement is either incorporating as a Benefit Corporation or amending a company’s operating agreement to include mission-aligned language. Breckinridge has been incorporated as a Benefit Corporation in Massachusetts since 2013. This designation requires us to incorporate accountability and transparency into our organization and supports our broader consideration of impact on our clients, society, and the environment to create long-term sustainable value.
BEST FOR THE WORLD
Each year, B Lab releases lists honoring the top performing B Corps in each impact category (according to size) in its “Best For The World” lists. Breckinridge has received several such honors over the years. In 2021, we qualified for Best For The World: Governance, meaning we managed to score in the top 5% of all B Corps across the globe in this category on our B Impact Assessment. According to B Lab, the governance section “evaluates a company's overall mission, engagement around its social/environmental impact, ethics, and transparency. This section also evaluates the ability of a company to protect their mission and formally consider stakeholders in decision making through their corporate structure (e.g. Benefit Corporation designation) or corporate governing documents.”4
B CORP COMMUNITY
Being a B Corp also means we are part of an impressive community of organizations dedicated to using their businesses to solve some of the world’s most pressing challenges and collaborating with each other in the process. We stay up to date with the initiatives of our fellow B Corps through the B Lab communication channels, and we engage with our local community through the B Local Boston chapter and the New England B Corp Leadership Development Conference. We enjoy sharing our knowledge with the community and learning from others to collectively use our businesses as forces for good.
 “Breckinridge Capital Advisors Overall B Impact Score,” B Corporation, June 2021
 The highest overall impact score a company can receive is 200. Per B Lab, scores above 80 are considered meeting the highest standards for third party-verified performance. In addition to the assessment, certified B Corps must pay annual fees to retain their certification status. First time submissions incur a submission fee. Additional information on the certification process can be found here: https://usca.bcorporation.net/process-requirements-fees/.
 As of 12/31/21 there were over 4,500 B Corps across the globe.
As Benefit Director of Breckinridge, I am pleased to report that the company continues to build out its deep commitment to sustainability at all levels—corporate, investment process, and stakeholder engagement. As the accompanying report sets out in detail, this ongoing commitment requires patient implementation and persistent elaboration to overcome the challenges of incorporating material issues of sustainability into the operations and investment processes of the firm. The adoption of meaningful and deep practices of sustainability that enhance the firm and its capacity to serve its clients at its accustomed level of excellence require a learning environment that provides an opportunity to reflect, refine, and improve as new sustainability data and practices become available. Breckinridge’s long-term commitment to incorporating sustainability concerns allowed the firm to persist in refining its practices throughout 2021 in spite of the difficulties of the work.
Over the course of 2021, Breckinridge continued to deepen its work on DEI within Breckinridge itself, and to sharpen an ongoing commitment to assessing climate risk across all areas of the firm and its investments. As detailed in the following pages, Breckinridge adopted a robust and comprehensive strategy to achieve a high standard of DEI within the firm and to consider DEI issues within the investment process. The hard work of implementation then ensued and continues into 2022. A firm-wide Climate Policy and Framework for Climate Action was adopted in 2021 as well.
Further, after a year of close study of the merits and implications of a commitment, Breckinridge determined to commit to the Net Zero pledge that will have profound implications for the firm and its investment process in the coming years. This pledge underscores the firm’s integrity in practicing sustainability internally and in providing leadership externally in the transition from a fossil fuel-reliant to a carbon neutral economy.
Finally, it must be noted that in the extraordinary times that COVID continued to present throughout 2021, Breckinridge’s careful attention to institutional sustainability served the firm well. Uninterrupted service to clients at Breckinridge’s customary level of excellence has continued throughout the pandemic, thanks to solid risk management, disaster recovery, and business continuity planning that enabled the firm to continue to work remotely for much of 2021. As we look forward to returning to more normal work conditions in 2022, we retain the confidence that as needed, we have the capacity to pivot to remote work quickly and effectively should the need arise.
In summary, I am pleased to report that, in the opinion of the Board, the company has acted well in accordance with its general benefit purpose in all material respects during 2021, and that the directors and officers have complied with the duties of their respective positions in considering the impact of Board and management decisions on the array of Breckinridge’s stakeholders.5
 Reference is made specifically to Massachusetts General Laws Chap. 156E, subsection 10(a) and 12(a).