Shelby R. King, writing in Shelterforce, asks whether an investment firm that owns residential property and regularly evicts its tenants should be eligible for the coveted B Corp1 designation.
The B Corp designation is coveted because it signals ethical business behaviour. The B Corp designation is useful for investors who want to avoid putting money into businesses that spew greenhouse gases, increase our carbon footprint or exploit their employees. A rating process like this can be beneficial because it takes a lot of work to track who owns what and what they do.
To get the B Corp designation, a company is rated on a series of criteria that are used to evaluate its environmental impact, social impact and its governance practices.
But as King relates, in some buildings that are owned by companies with a B Corp designation, the tenants are witnessing high rates of eviction and unresponsive landlords who are letting building conditions deteriorate. She asks whether the B Corp assessment should take account of treatment of tenants. For example, keeping a building in good condition releases less carbon into the environment than tearing it down and replacing it. As well, people have better health outcomes when they live in buildings in good condition and without the threat of eviction.
How does B Corp build its criteria? Is B Corp open to changing its criteria? Are there alternative rating systems that include landlord tenant relationships in their rating systems? For author King’s perspective on these questions, read more in Shelterforce: ESG … and T? Tenant Protections Fly Under the Impact Investing Radar
Footnotes
- B Corp is a non-profit organization which operates internationally.
