One of the highest standards for social and environmental responsibility in business, B Corp certification, was awarded to Fetzer Vineyards and praised by the U.S. Department of Labor last week. The certification developed by the non-profit B Lab now signifies over 1,400 responsibly run companies from 130 industries and 42 countries. The performance standards are comprehensive and transparent, and measure a company’s impact on all of its stakeholders, including workers, suppliers, community, and the environment.
One of the highest standards for social and environmental responsibility in business, B Corp certification, was awarded to Fetzer Vineyards and praised by the U.S. Department of Labor last week. The certification developed by the non-profit B Lab now signifies over 1,400 responsibly run companies from 130 industries and 42 countries. The performance standards are comprehensive and transparent, and measure a company’s impact on all of its stakeholders, including workers, suppliers, community, and the environment.
Fetzer Vineyards announced last week that it is the largest wine company in the world to receive B Corp certification, and has set a goal to become Net Positive by 2030. The winemaker described these initiatives as the natural next steps in its sustainability journey. The company received Zero Waste certification in 2014 and is on track to meet a carbon-neutral goal for 2016. Fetzer is the second winery certified as a B Corp in California, joining olive oil and estate wine producer McEvoy Ranch.
Net Positive status requires the assessment of all aspects of the organization and the development of a plan to eliminate negative impacts while increasing positive impacts, resulting in a positive corporate footprint. Fetzer’s pursuit of Net Positive includes the following goals:
- Reduce energy use (kWh/case produced) by 20 percent by 2020;
- Reduce water use (gallons/gallon wine produced) at the Mendocino County winery by 15 percent by 2020;
- Achieve a 99.9 percent solid waste diversion rate by 2020; and
- Attain 100 points on the B Impact Score by 2020.
"We have a long history steeped in sustainability and strive to be a model for how a commitment to sustainability can restore the natural environment, enhance the well-being of employees and community members, and contribute to sustainable business growth,” said Fetzer CEO Giancarlo Bianchetti. “The B Corp Community inspires us to be the best in the world, and also to be the best for the world."
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The California wine industry is no stranger to environmental commitments. At a state level, California has certifications for sustainable winegrowing, and at the county level, Sonoma Wine County Winegrowers has committed to 100 percent sustainable wine production by 2019. Sonoma-based Jackson Family Wines partnered with the University of California Davis to create a Net Zero research winery, and installed Tesla Energy’s new energy-storage technology to reduce its electricity bills by 40 percent. In such a competitive segment, its new B Corp certification could help Fetzer Vineyards get ahead of its peers in the eyes of eco-conscious consumers.
Meanwhile, the U.S. Department of Labor gave institutional investors explicit permission to invest in businesses such as B Corps that have adopted environmental, social, and governance (ESG) best practices such as expanded fiduciary duties. The Employee Retirement Income Security Act (ERISA) guidance has been updated to reduce hesitation around investment in funds that take non-financial factors into consideration.
ERISA is a federal law that sets standards for private pension and health plans. The recent revision allows for “economically targeted investments” (ETIs), which are broadly defined as “any investment that is selected, in part, for its collateral benefits, apart from the investment return to the employee benefit plan investor.” The Department clarified that ETIs can be selected provided that the expected rate of return and risk characteristics are comparable to alternative investments – in other words, “all things being equal,” ETIs are appropriate investments for plan assets.
The interpretive bulletin goes on to encourage the selection of ETIs in some cases, saying, “…in some cases ESG factors may have a direct relationship to the economic and financial value of the plan’s investment. In such instances, the ESG issues are not merely collateral considerations or tie-breakers, but rather are proper components of the fiduciary’s primary analysis of the economic merits of competing investment choices.”
Members of the B Corp community participated in developing the recommendations for ERISA reform, met with U.S. Secretary of Labor Thomas E. Perez, and worked with various unions and organizations to arrive at new guidance that could be approved by Congress. B Lab’s work has led to benefit corporation laws being passed in 31 U.S. jurisdictions.
"Investing in the best interests of a retirement plan and in the growth of a community can go hand in hand," said Perez. "We have heard from stakeholders that a 2008 department interpretation has unduly discouraged plan fiduciaries from considering economically targeted investments. Changes in the financial markets since that time, particularly improved metrics and tools allowing for better analyses of investments, make this the right time to clarify our position."
Published Oct 26, 2015 6pm EDT / 3pm PDT / 10pm GMT / 11pm CET