investing etc. 0004

HNY, the stockmarket is not all there is, Keystone Law, Focusrite, annual reports, presents with purpose, B Corps are changing capitalism

Happy New Year. Today there are 167 of us striding into the future together including one reader who emailed from Vancouver!

Despite a smidgen of time off and a larger gap than usual between this and the third edition of investing etc., I’ve been busy. 

My investigation into law firms continued with the discovery that the stockmarket is not all there is. It concluded when I scored the most successful listed UK law firm: Keystone Law.

The only other share to be scored since you last heard from me is high-flyer Focusrite, which makes audio equipment for musicians, venues, and podcasters.

Instead of researching companies, I spent the run up to Christmas documenting improvements to my research process during 2023. 

Shares for the future: what I think about when I think about investing is an updated guide to the Decision Engine and Share Sleuth. It explains how I score, rank, and invest in shares likely to perform well over the long-term.

My SharePad system explains how I find these shares in the first place.

Central to this research process is each firm’s annual report. They should tell us all we need to know. Some do. Some don’t. 

Presents with purpose

Christmas is over. But before we say goodbye, I’d like to share a coincidence. In an unchoreographed exchange Rachael, my wife, gave me a backpack and I gave her a pair of pyjamas for Christmas.

New Year’s Eve: The first outing for my new backpack

Not much of a coincidence, I hear you say. 

The backpack was from Cotopaxi and the pyjamas were from Stripe & Stare.

No obvious coincidence there, either.

But there is one. Both companies are certified B Corps.

To achieve this status, organisations must score at least 80 out of 200 in a B Impact assessment conducted by B Labs, which is a charity in the UK. The assessment covers the firms’ governance and their impact on workers, community, the environment, and customers.

You can look up a B Corp’s status: Cotopaxi scores 125.6 and Stripe & Stare scores 97.

We were attracted to Cotopaxi and Stripe & Stare because of their environmental credentials as well as the quality of the products. The backpack is made from off-cuts and the pyjamas are made from trees (Stripe and Stare also makes compostable knickers). 

But we had no idea the companies were striving to be sustainable in so many other ways. 

It seems our consumer tastes are aligning with our investment tastes, which have always emphasised the long-term (aka sustainability). That would probably be music to the people at B Labs’ ears, because they are on a mission to change capitalism. 

We can change capitalism if we are thoughtful about what we buy, and the companies we invest in. Companies will change their behaviour if consumers and investors demand it.

The mission is well underway. B Lab UK’s annual report says that the number of UK certified B Corps has risen from 178 at the end of 2018 to 1,158 by the end of 2022. The number of organisations using its B Impact Assessment Tool (considering becoming a B Corp) was 28,855 in 2022. There are more than 6,000 B Corps worldwide.

As I wrote in investing etc. 0002, UK listed soap maker PZ Cussons is preparing to become a B Corp. One of its subsidiaries, Childs Farm, already is a B Corp (but only just, it scores 80.7). 

I thought PZ Cussons might become the first listed B Corp, but I was wrong about that. Kin & Carta qualified as a B Corp in 2021 with a score of 86.5. 

Kin & Carta’s  journey as a listed B Corp is destined to be short though, as buyers are bidding to take it private.

Another coincidence. Kin & Carta used to be St Ives, a printer, before it transformed into a “digital transformation consultancy”. 

It printed annual reports.