Social Equity

3 Ways to Make Investment Decisions Without Compromising Values

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By Aaron Fairchild

I recently spent a couple of days at SOCAP18. After the conference, I had the opportunity to screen a soon-to-be-released Australian documentary called, 2040. 2040 is a beautiful “future-fit”, utopian depiction of a potential future made possible by incorporating carbon drawdown methods and technologies. 
 
The week before the screening a new environmental philosopher friend shared a concept she has written about extensively — the Precautionary PrincipleShe explained this by saying, “One can’t use uncertainty as a justification for inaction. One must use precaution to mitigate harmful outcomes even in the face of uncertainty.
 
Appling this to positive impact investors could translate to: “Investors and their financial fiduciaries can’t use financial uncertainty as a justification for inaction. Given the urgency of our social and environmental challenges, investors must use precaution to mitigate harmful financial outcomes — And still identify ways to invest in positive social and environmental opportunities even in the face of financial uncertainty.”
 
Unfortunately, in the face of our pressing social and environmental problems, the Precautionary Principle is often used as a reason not to invest in opportunities that generate positive impact outcomes. Even given our good intentions, the traditional structures of finance don’t legally allow moral social and environmental convictions to negatively influence financial outcomes. If the financial outcome is uncertain, but the social and environmental outcomes are clear and measurable — the existing legal frameworks and institutional structures justify inaction in the face of uncertainty.
 
As my mental turntable plays the paradoxical precautionary blues, I see images of the amazing people in the theater moving to a rhythm of positive change, but are we a little off the beat? 
 
How many times have you heard, “In order to attract more capital, the social and environmental enterprise must prove its ability to create market-rate returns. We need proven strategies.”? This thinking may lead to a slip-and-slide of marginalized outcomes in the pursuit of “market-rate” returns. Furthermore, the Precautionary Principle can create a disincentive to invest in positive social and environmental outcomes in uncertain market cycles or in investments labeled “concessionary.” In uncertain markets or uncertain categories, investors may justify putting the pursuit of positive outcomes on the shelf in favor of “proven” and more certain downside protection investment strategies.
 
According to Paul Hawken in the film 2040, 80% of the world’s agriculture is grown by small farm holders. However, in 2018 small farm holder investments are flat to down. Unfortunately, this is not an anomaly. Small to medium enterprise investments are flat to down, and renewable energy investments globally are flat to down as well. I recently learned of these alarming statistics on the Impact Alpha podcast, Getting to Yes. The decline observed in this podcast may be a result of investor’s growing uncertainty in the financial markets. Are we employing the Precautionary Principle? This may forecast a potential disturbing trend for urgently-needed investments in social and environmental solutions as the US economy advances into a market cycle already long in the tooth.
 
Understanding how we may be employing the Precautionary Principle helps clarify that even as we face urgent need to invest in social and environmental solutions, our desire for positive social and environmental outcomes often are left waiting on the side in the face of financial uncertainty. It is a difficult paradoxical dance to pull off. If true, I have three recommendations:

  1. Engage and collaborate with the impact entrepreneurs.When the social and environmental outcomes are clear, measurable and convincing, but the financial outcomes are uncertain — engage! Offer to work directly with the social entrepreneur or fund manager to help craft precautionary strategies within the investment opportunity that mitigate potentially harmful financial outcomes. Assess the investment opportunity thoroughly, do your due diligence and collaborate to mitigate harmful financial performance while maintaining the positive social and environmental outcomes. 

  2. Change the legal framework of professional financial organizations to align to the Benefit Corporation structure. Benefit Corporations structurally embed expanded fiduciary obligations to include social and environmental considerations.

  3. Work with a separate advisory committee or due diligence team. As an individual investor that is not constrained by the fiduciary obligations of professional wealth management, consider working with a separate advisory committee or due diligence team or conduct personal due diligence on impact investments.

 
After the 2040 film screening, I left the theater in a crowd full of optimism and inspiration. Even with the Precautionary Principle burrowed deep within the financial structures and investment psyche of America, I am optimistic that by becoming more aware of how and why we make decisions— and the structures within which we make them— we will continue to learn how to better align capital to the future we envision. 

Patience and Urgency Combined | SOCAP17 and the BCorp Champions Retreat

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The last two weeks has been a whirlwind of intentional conversations with like-minded, social purpose organizations. The B-Corps Champions Retreat and the following week of SOCAP17 were both intense conferences of shared themes and desired outcomes. A couple things linger in my mind from these social impact conferences:


  • The short distance the social impact investment community has traveled to date and where it is on the arc of its lifecycle trajectory.

  • The emphasis on personal improvement.


So how far have we come? My first year at SOCAP was 2009. That was the same year when I first learned about B-Corps companies at the Sustainable Industries Journal forum from Stephanie Ryan of B-Lab. It was directly after SOCAP09, in November of 2009, that Green Canopy bought its first project and our work to build the company began full-tilt and relentless. The first years of Green Canopy were about survival and getting the organization right. Today we have the capacity to expand the scope of our community beyond the Pacific Northwest region. In 2013, we certified as a B-Corps, but my first B-Corps retreat was two weeks ago. This was followed up by SOCAP17, my first year back since 2009. In the eight-year span between first learning about B-Corps companies and SOCAP, and today, this community has grown significantly and become a legitimate investing force and philosophical approach.
 
When looking at the lifespan of contemporary impact investing in the SOCAP17 booklet, the movement is younger than many of us, just turning 40 years old. If we are investing for this generation but also for generations to come, then we are in the infancy of a multigenerational movement determined to continue to grow, learn and transform global society and economy. We are on the early side of the impact investment lifespan for sure. We have a long way to go and the urgency of the issues we are addressing with our labor and capital create impatience on behalf of just about everyone in this community. Throughout both conferences it felt like most people were understandably feeling the impatience of our youthful movement. Like we just want to be older and more mature than our short 40-years will allow.
 
And then when we couple our youthful impatience with the urgency our work demands, impatience compounds. Which, perhaps, is the reason so many conversations at both conferences discussed the importance of personal, emotional, and spiritual growth in the practice of social entrepreneurship and impact investing. If the antidote to anger is patience, then the lack of patience leads to anger. The importance of love in our work requires patience, yet patience decidedly lacks urgency. Perhaps in order to productively hold this dichotomy through the transition to a new paradigm, a focused determination that allows for grace and patience when organizing with a sense of urgency requires each of us to develop increased mindfulness within swirling storms.

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Celebrating our collective “wins” and taking stock of our successes happened throughout both conferences as well, and from my perspective there is a lot to celebrate in the progress we have collectively made in just the last eight years. When I first learned about B-Corps companies in 2009, there were 205 certified B-Corps, in 28 states and in 54 industries. Today there are 2,310 certified B-Corps, in 50 countries and in 130 industries. SOCAP has tripled in size and become an international affair. It is drawing investment firms representing more capital than most people seemed to think possible just a few years ago. Bringing values into our investment analysis continues to seem obvious once seen; like suddenly being able to see a number hidden within the page of little colored dots. The more people’s eyes identify that opportunities to make money work for positive change are hidden in plain sight, the more obvious it becomes that when we direct our resource toward changing the world for better, the world indeed gets incrementally better.

I am entirely grateful to be part of this community and movement, and I look forward to continuing with the dual edge of graceful patience and urgency, toward building and investing in the future we believe in.

"Transparency, accountability are no longer fringe ... We are seeing a surge of leaders who want to have a platform to influence the greater good." -Bart Houlahan, B Corporation | SOCAP17

Built Green Panel: Exclusionary to Inclusionary

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by Aaron Fairchild, CEO

At the September 14 Built Green Conference, I moderated the panel, Exclusionary to Inclusionary: How can we make our region inclusive, resilient, and vibrant, with Seattle mayoral candidates, Jenny Durkan and Cary Moon, as well as City Council candidate Teresa Mosqueda, and Sightline founder Alan Durning. It was an honor to moderate this discussion. It was made even more poignant by the passing of my father the night before after nearly a 10-year struggle with Alzheimer’s. He would have been proud to see me moderating a discussion with such a powerhouse group. I did my best during the discussion to channel the thoughtfulness he demonstrated throughout his life. I would like to thank the panelists for their time and contribution, and for helping to make an otherwise difficult day, one of inspiration! 

Here are a few thoughts I took away from the conversation. 
All the panelists agreed that up-zoning or at least allowing townhomes, duplexes and triplexes, and row-houses onto our exclusively zoned SFR lots within the city is something that should be pursued. I also learned there was broad agreement that the permitting process at the city should be streamlined and explored for greater efficiency in processing permits. The last thing that became quite apparent was that: 


we all agreed that our vibrant city will only remain so if we can maintain income diversity where it currently exists within our neighborhoods and bring it back to our city’s more desirable and “exclusive” neighborhoods. 
— Aaron Fairchild

I don’t typically endorse candidates, however, given the conversation, I would like to humbly offer my thoughts on these candidates and on Alan as a panelist. 


Alan Durning was a Vesuvius of knowledge; bright, red hot and over-flowing with intense clarity and of course, humor. 

Jenny Durkan exudes focused energy aligned with her past and progressive vision of Seattle’s future. Seattle would be well served with her as mayor. 

Teresa Mosqueda was a power provider, articulate, earnest and buoyant. I can whole heartedly endorse her candidacy and sincerely hope that Seattle will benefit from her leadership in the near future. 

Cary Moon is heart and meaning and brings unassuming positivity together with pragmatic approaches for progress. Seattle would be well served with her as mayor. 

When doing a quick read on Wikipedia about Bertha Knight Landes (October 19, 1868 – November 29, 1943), I discovered she “was the first female mayor of a major American city, serving as mayor of Seattle, Washington from 1926 to 1928. She is to date Seattle's only female mayor.” 

These three powerful women candidates honor Ms. Landes’ memory and life through their current and future efforts. I am looking forward to seeing the last line in the Wikipedia page updated to read, “She was Seattle’s only female mayor, until 2017.” 

You can watch the condensed footage of the discussion on the Built Green website

Green Canopy relies on Built Green to provide rigorous green building standards. Green Canopy utilizes their standards to certify our homes as Built Green Certified. On an annual basis the Built Green Conference provides builders, developers and real-estate agents cutting-edge information on green building and sustainability. Thank you Master Builders Association and Built Green! 

Photo Credit: Built Green and Alabastro Photography

POCKETBOOK POWER; IT'S IN OUR HANDS

A Response from Aaron Fairchild, CEO of Green Canopy, Inc.

For those of us that are deeply concerned with the current Presidential administration, I thought I would offer acknowledgement in solidarity and a potential response to consider throughout each day as you continue protesting in the streets across America.
 
Trump is a self-professed businessman and has proclaimed that he will create perpetual economic growth throughout his Presidency and beyond, even at the expense of equity and the environment. To which we can, and should respond with a resounding, “No!" Natural limits to growth exists as populations grow and resources diminish. Perpetual economic growth at the expense of equity and the environment simply cannot be sustained, nor should the idea be tolerated as acceptable.
 
For years the “buy local” movement has been a compelling response to the perpetual growth model and well articulated in Wendell Berry’s short book of essays, “In the Presence of Fear." Buying local, and all that it entails, helps to strengthen our local communities and economies as we work to address our environmental and social equity issues in a more sustainable and less consumptive manner.
 
Today we find ourselves confronted with a Presidential administration that is happy to operate as a bull in global and national “china-shops,” rolling back environmental regulations not to mention our constitutional liberties. Given this as the backdrop it is more important than ever to perhaps reconsider our consumption behaviors and retrench to our local establishments and communities. The consumer has the loudest voice in our democracy. If consumers change their behavior, companies take notice, and correspondingly so do politicians.
 
To this, I ask you to send a message to this administration along with me and thoughtfully limit your consumption of global brands, and perhaps in general. Will you join me in more deliberately and critically considering the purchases you intend to make? Can you think about holding off, or reflect on not going out to dinner or away for that vacation? Perhaps consider focusing on local purchases, “stay-cations”, dinners at home with family and friends and making your investments locally.
 
But you may say, “Aaron, buying local and limiting our national consumer trends by perhaps even 5% would certainly cause a recession!” Frankly, is there a better way to send a message to a President who has trumpeted his business and economic acumen? Perhaps there is, however corporate sponsors won’t continue clinging if their numbers go down. Protest with your pocketbook and send an economic message to a business baron and let go of fear of a potential self-induced recession
 
Recessions come and go, and if a recession were indeed to arrive as a result of buying local, perhaps it would be more easily corrected than otherwise. More importantly, a recession caused by conscious consumption puts economic control in the right hands; in your hands, the hands of the people and not corporations or politicians. Send a message and buy locally, invest locally, walk to a friend or neighbor’s house for dinner, take transit, and walks in the dark and beautiful woods instead of heading to the movies.
 
If you ever needed an excuse or a little nudge to buy local and perhaps even less, the excuse sits in the White House and the nudge is constantly viewed on your news push-notifications. Take action throughout your every day. Consider more critically and deliberately as you buy products and consume goods. Mindfully, in the moment, think about buying less, buying local, investing local. Let go of fear and embrace the power of your pocketbook to create change. 

Share an easy, yet meaningful idea as a comment below that may be helpful to others as we all align to living and buying more locally.

Women's List for the Mountains

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Excerpt from the Washington Women's Cookbook, 1909

1. Sleeping Bag, consisting of three bags - one inside the other.
(1) Waterproof shell, of khaki or rubber or parafined canvas or oiled silk
(2) Double wool blanket bag
(3) Comfort padded with wool bats, the comfort folded and sewed together as a bag.

2. Tramping suit:
(1) Bloomers or knickerbockers
(2) Short skit, knee length, discarded on the hard climbs
(3) Wool waist or jumper
(4) Sweater or heavy coat

3. Three pairs of cotton hose

4. Three pairs of boys' wool socks to wear as the second pair of hose to prevent chafing

5. Mountain boots to the knee with heavy soles, heavy enough for hob-nails and these must be placed in the soles before starting, using 3 1/2 eighths Hungarian nails in the instep as well as in the heels and soles 

Say Hello to Cora! 2902 NE 53rd

It's always fun to research names for our homes. It is one of the identifying features of a Green Canopy Home - and most of our homes are named after women who have made history and who have helped us get to where we are today. I couldn't help but highlight one of our newest acquisitions. The moniker for this home certainly is a story worth being told! Our latest project is Cora - after Dr. Cora Smith Eaton.

Cora was one of Seattle’s leaders in women’s equality during the turn of the century. Additionally – she was the first female secretary of the Mountaineers Club and also the first woman to summit Mt. Olympus (not to mention she summited all 6 of Washington’s major mountains). 

Cora was also a doctor of medicine and was the first woman doctor to practice in North Dakota before moving to Seattle. She was licensed in several states by the end of her career and ran a practice with her husband Dr. Robert A Eaton.

And my favorite anecdote – Cora also helped author the Washington Women’s Cook Book – a PR stunt for the Suffragettes to help get the message of women’s equality to the women who were still stuck in their kitchens – and to help sway men to support women’s right to vote by saying even the Suffragettes can still put a good meal on the table. Brilliant! 

Cora's contribution to the Cook Book consisted of the list above (they have a section on packing food for a hiking trip) and a recipe for (drum roll please...) Tea. Yes - her meaningful, amazing contribution was Tea. The recipe is below - but in her heart of hearts, you can see where Cora's priorities were. She was an adventurer... blazing trails for all of us.

But clearly, none of us can live in the PNW without tea. 

She is one bad ass mademoiselle. Welcome to Green Canopy. 

A Recipe for Tea
In two quarts of fresh water, boiling hard, put a loose cheesecloth bag containing four heaping teaspoons of tea. Cover and let stand by the fire for five minutes, but do not boil. Then remove the bag of tea, as leaving it in will make the tea bitter. Or, if the bag is not convenient, pour the tea off the leaves after it has steeped for five minutes. -Cora Eaton

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"Density" Empowers Bold Conversations in Seattle

Contributed by Krystal Meiners

Good conversations are typically born in the company of good people. 

That was the driving thought when we created the Empower Happy Hour at the beginning of 2014. We wanted to have good, meaningful conversations with people outside of our own organization (because frankly we were all preaching to the choir internally and were probably consuming too much booze just to keep things interesting). What we didn’t want, however, was to host a formal event, or a networking opportunity. We wanted to have real conversations with interesting people, so the Empower Happy Hour was born.

The format of these events have always been the same… low key, in a bar, no nametags, no soapboxes, no formally led discussions – just a topic to unite us, an amazing sponsor and an impactful non-profit. Each event has been unique – but the most recent one in Ballard was especially inspiring and a great indicator for successful future events. We are truly thankful for the opportunity to have hosted with Sustainable Ballard and we were especially grateful to our sponsor Redfin Builder Services.

While this event was a bit different from our other Happy Hours - there were a couple of key ingredients that helped mold it into something very special and eye-opening.

1. An AMAZING question. 
Our non-profit cohost has always provided a topic of discussion for our happy hours – and Sustainable Ballard really hit it home with their topic.

a. Does Density = Sustainability?
b. Does Sustainability = Density? 

This two-parter really has a huge impact in Seattle right now and is on the tips of everyone’s tongues. Despite the "breathing room only" crowd – the quality of conversation was fascinating. Not everyone chooses to talk about the topic during our happy hours but this really captured the attention of many including Councilman Mike O’Brien who was discussing Ballard’s new apodments – considered both a scourge and blue-sky solution to housing in Seattle.

The rest of the conversations spanned walkability (a fun topic in light of Redfin’s recent acquisition of Walkscore) – as well as Ballard’s most recent developments and the addition of quality locations to eat, shop and sip. The idea of a “carless lifestyle” as the new definition of luxury was a spirited thought when considering the changing mindset toward livability in times of climate change and a return to urban living.

Not all of the conversations were light-hearted. Serious attention to community wants and needs and the impact of more density on transportation was a common topic; as was the builder-bad-guy issue with neighbors. Not everyone loves the way development looks, feels and changes a neighborhood – so thoughts on working with community were abundant. In particular - discussions around Green Canopy's new Neighborhood Design Survey and community meeting approach were inspiring to neighbors that had visited the event.

2.  Another key ingredient to the success of this specific happy hour was the LOCATION. 
We went against our own rules and decided to host the event in a small event space – but to keep it lively, we started off with drinks at the nearby Skillet – and then moved indoors. While it may have been difficult to corral folks - no one was lost and the “bar-hopping” effect made the event feel less stiff. 

Aside from just the venue – the fact that the event was held in Ballard – a community common to our hosts, co-hosts, sponsors and mired in the topic at hand – made it easier to talk about density relative to where we were all feeling excitement and pain. The Greenfire Campus was a perfectly inspirational space with only enough room to kiss or kill whoever you were speaking to. Skillet made for the perfect pre-funk, and Parfait made for the perfect after-hour snack.

We were very excited to host this event with Sustainable Ballard and Redfin. The event lasted well past our 6:30 cutoff and folks lingered having friendly discussions. While there was no Bocce, like our previous event at Von Trapps, and there was no policy big-wigs like our event with Climate Solutions – it was intimate, refreshing and exactly what we could have hoped for.

We definitely look forward to hosting many more Empower Happy Hour’s, and aim to keep them simple, sexy, and substantial. We hope you will join us the next one to help ADVANCE THE DISCUSSION.

The Empower Happy Hour is a quarterly event hosted by Green Canopy Homes. If you are interested in sponsoring the event or if you belong to a non-profit that is interested in co-hosting, please contact krystal@greencanopy.com . If you are interested in joining the event – please sign up for our Newsletter to receive updates on event dates and venues.

Corporate Values & Corporate Culture: is it Legit, or is it lip Service?

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Contributed by Aaron Fairchild, CEO of Green Canopy Inc.

According to 2013 research published by Luigi Guiso, Paolo Sapienza and Luigi Zingales, The Value of Corporate Culture, 85% of S&P 500 companies have at least one section of their website dedicated to -- what they call -- “corporate culture” i.e. principals and values that should inform the behavior of the firm’s employees. Values are important to promote and advertise on corporate websites and reports, because it is imperative for companies to manage their image. External stakeholders expect companies to have thought about their values and publicly acknowledge them. The act of creating and promoting values can help assure external and internal stakeholders that the company has a higher degree of integrity and is guided to conduct their business in a way that is consistent with and based on their stated values. 

Start with Intention

I recently spoke with the CEO of a publicly traded bank who was extremely proud of his employees for going through the process to create and document their values. They were, “developed by a group of really passionate employees that love this organization and only want the best for the bank, our employees and our customers.” Their guiding philosophy relating to their values are stated as, “Our Core Values encourage us to act in a manner that “wows” others and provide us with the opportunity to guide our actions that allow us to become who we want to be. We take pride in our Core Values and strive to live them each day.” This is an example that provides insight into great intentions and proactive leadership. However, when I asked him, “What does the bank do to ‘strive to live them each day’?” he floundered. Wasn’t it enough to go through the process to create their values and then promote them both externally and internally?

Learn from Employee Perception

This is a great place to start. But organizations that want to leverage the power of corporate culture to increase productivity and returns need to do more. 

The Guiso, et al. study also uncovered some additional, interesting facts regarding advertised values. Notably, the value most commonly exploited by the S&P 500 companies was “Innovation” followed by “Integrity” and “Respect”. When the researchers attempted “…to correlate the frequency and prominence of these values to measures of short and long term performance,” they “...fail[ed] to find any significant correlation.” Basically they found that advertised values are not a great indicator of corporate and employee performance. Perhaps that is because it is easy to state your values, so everyone does. 

Another point to note in the research is the concept of perceived value. The study found that if the employees of the company perceive management to have a high level of integrity, there was a positive correlation, and good outcomes in terms of higher productivity, profitability, and the ability of the company to attract talent. In other words it isn’t enough to create and promote values, they had to be perceived and held within the employee base of the organization.

Living Values

So how do we know if a company’s stated values are not just something that they claim to be true, but are indeed perceived and held by the employees of the company? 

A few clues to consider in your evaluation process: 

  1. If the company has its values listed internally or in an orientation packet, but they do not advertise their stated values on their website, this would suggest a note of caution. Again, according to the research paper, 15% of all S&P 500 companies do not advertise values. If you don’t talk about your values or share them with outside stakeholders then it is hard to be held accountable to them. It may also indicate that their management wants to be authentic and doesn’t feel the need to advertise values, however it certainly begs inspection.

  2. Does the firm, large or small, value their Human Resources Department or efforts. In small, start-up firms many times HR is valued lower than marketing. The commitment of the leadership to focus on their number ONE asset, their human resources, is indicative of their values. In larger companies, is the head of HR part of the Executive Suite? In other words how high up are Human Resources valued? If the head of HR is nowhere near the top of the company, this would indicate a gap and that the leadership of the firm does not have a high attribution to corporate values. 

  3. Inquire how developed their internal recruiting processes are. If employees don’t want to recommend their friends to work at the company… something may be off.

  4. Can an employee who has been at the company around one year tell you the values of the company? If the company is living their values, it should be easy and even exciting to share with others the shared sets of values at the firm.

  5. Can managers and employees give examples of when others made decisions that aligned with the values of the firm? Clearly if no one can, I would question if their values are lip service.

  6. Lastly, ask the vendors and customers of the firm what makes the company different from others in same field. If examples of what makes the firm different line up with their stated values, you can assume that their values are not just lip service and that the employee on the front lines is living the firm’s values. 


I am sure you can think of many more “sniff tests”. The fact that anyone can truth-test stated values should give employees, investors, and customers alike a leg up in identifying if a company is truly anchored by its values (which correlates to performance and profitability) or if their stated values are just the lip service of corporate collateral created in the back halls of the Marketing Department. 

Cultivating Seeds of Corporate Culture

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"The more alive values are within a group the stronger the bond and the greater the resiliency of that group. It’s about so much more than happy hour beers."

Contributed by Aaron Fairchild, CEO of Green Canopy Inc.

Have you ever heard ANYONE say after coming back from Europe, “I had a great trip, but I just hope those Brits/Germans/French don’t lose their culture?” The very notion of a nation losing its culture seems silly. Sure cultures change, but they change over time. National cultural changes happen slowly and change is usually driven by a shock to the current way of life. 

For whatever reason, corporate culture doesn’t seem as “fixed” as national culture. Nations lose their leadership, have lots of turnover and people come and go all the time. And nations are influenced by other nations in ways that it is hard to imagine might happen in companies. So what makes company culture more susceptible to change? 

Fast Starts and System Shocks

I recently spoke with David Norris, CEO of MD Insider. We both agreed that companies tend to start-up rather quickly. People come together in the beginning more out of chemistry and shared excitement about the opportunity surrounding the product or idea. More often than not, they share a common national cultural framework so they already have a great basis to begin working together. They also have a shared language, and typically share the same historical perspective, political and economic frameworks (socialist, democratic, capitalist, parliamentarian), etc. Layer chemistry on top of a similar national cultural framework, and that can take the newly formed company down the road a fair bit.

The breakdown typically comes, just like with a nation, with a shock to the system. For a company this could mean jumping from four employees to twenty in less than one year, and then from twenty to forty in another six months.  When countries are merged together for one reason or another, we often watch as the individual cultures tear them back apart... Infighting can happen as larger and more powerful countries begin to dictate terms. Just bringing a similar currency to Europe has been challenging since adoption of the Euro. In the same way, with companies experiencing rapid growth, bigger personalities typically dictate cultural norms, and when those personalities move, for good or bad, so goes the cultural dictator.

Core Values As Cultural Seeds

To help ensure your corporate culture isn’t encapsulated and controlled in one or two, or even just a few key personalities, consider what is at its core. Culture can be defined as the shared values, language, beliefs, and customs of a group. At the heart of culture is how we interact and behave together. At the heart of culture is how we interact together and behave together… David referred to our shared set of core values as the seeds of culture. As the seeds of culture take root in your workplace, your teams will thrive and productivity will increase. 

If a group of people has a shared set of values, they can be pointed toward any mission or vision, and as long as they buy into the mission and vision, they will excel.  Core values incorporate our language, what we celebrate, how we develop, our rights of passage, and how we interact. For a country, these things may seem obvious. For companies, it seems less than obvious for many leaders.  In fact, I’ve heard more about the importance of the boss taking people out for beer as a means to “create culture”, than working on our values to create culture. Hmmm.

Whether a company’s values are implicit or explicit, they exist. The more explicit the shared sets of values, the more that group of people “live” their values. The more alive values are within a group the stronger the bond and the greater the resiliency of that group. It’s about so much more than happy hour beers.

Every Day Values

Companies often explicitly state their values on their websites and in promotional material, creating a veneer of credibility and sincerity. One of the most infamous examples of this is Enron’s four capital V Values: Respect, Integrity, Communication and Excellence. Clearly this broke down long before the company failed. So if our values are the seeds of culture then nurturing and cultivating these values throughout every day will help to keep them alive and healthy, rather than stale and static on a corporate website.

For a traveler, there’s a difference between that sense of “Love this place, but wouldn’t want to live here” and “I would love to live here!” It’s the same in companies. Living your corporate values and keeping them alive and healthy within the company means the right people will find they’d “love to work here”, and the “wrong” people will move along. A company whose employees work to keep their shared values alive within the organization will allow the company culture and the team to thrive through down times and times of change and growth.

B the Change, see the Change

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"If we don't pay attention, we risk running businesses at the expense of our communities, our planet and the future." 

Contributed by Krystal Meiners

It’s been nearly one year since Green Canopy became a certified B Corp. Our company, at that time, was a small and tight-knit group that was dedicated to living out our values and our mission. Our work was meaningful and the team was excited about growth.

It couldn’t have been a better decision to certify at that time. Our small and nimble team had created a rich corporate culture that everyone was excited about preserving. We were mindfully crafting systems for hiring, communication, and human resources that would ensure that our culture and values were protected as we grew. Certifying* was part of that process… but one year later we are finally seeing just how important it was.

Since then, Green Canopy has nearly doubled in size. We have started new business channels: from Fund development, to Custom Services, to RePurpose (a whole-house deconstruction program). We have gained talent, we have restructured; we have evolved. All the while, managing our culture, resources and social capital in a way that is intentional and meaningful. 

B Corp means a lot more to how we do business now. It enables us to do business the way we want to do business – the way we started out with our high-fiving, adventure-loving, sustainability-minded (Fbomb-dropping) nimble team not long ago. But now it allows us to do more. It holds us accountable, it guides us and gives us tools for growth. B Corp helps us do business better.

I asked some of our team, both new and old members, what B Corp means to them and how it allows them to do business better. Here is what they had to say:

  • Ami Nieto, Office Manager: B Corp certification has fueled our passion for sustainability and keeps it at the forefront of our minds in every business decision we make. It has changed the way we hire people and tuned our focus on attracting talent that is committed to our mission as a Certified B Corporation. B Corp inspired us to raise the minimum wage of our company to $15/hour. For being a company of less than 50 employees, this change is years ahead of other companies in our region and our industry.  We now offer stock options to all employees upon hire. We also contract with more local and sustainable suppliers. We have chosen to bank locally with an independent institution (Beneficial State Bank). Next year we hope to go completely paperless!

  • Bec Chapin, Director of Custom Construction: Being a B Corp takes the mission of Green Canopy out of the house and into the lives and operations of the company. It is about running business so that it is sustainable to the world, communities, and employees; and because of that, our clients. For too long we have run business for the benefit of the shareholders and forgotten that it is also a big part of the ecosystem of our lives. If we don't pay attention, we risk running businesses at the expense of our communities, our planet and the future. 

  • Caitlin Hoeberlein, (Spec Construction) Project EngineerI specifically sought out B Corporations when searching for job opportunities in Seattle. Previously, I worked for a small B Corp in New York, and I loved the attitude of people and the environment over profits. It was important to me that the company I worked for also supported those ideals that are so important to me.

  • Andy Woverton, Controller and Director of Fund Development: Being a B Corp is important to me because it is an important signal of how Green Canopy cares about our employees, responds to the communities in which we build, provides information to our shareholders and stewards our environment. The B Corp signal projects positively to current and potential future employees, neighbors and investors.

  • Nate Morr, RePurpose Site Supervisor: Being a B Corporation is important to the deconstruction work I am doing for the company because it allows me to be creative in the reuse/recycle of materials from the homes we deconstruct. Rather than solely being focused on the most efficient and economical method of material diversion, I can find unique ways of repurposing material that is beneficial to the environment, our community, and our company’s practices as well. For instance, having the Union Gospel Mission's 118 Design Program work with us to deconstruct and reuse reclaimed lumber is an excellent story for the diversion of our material that, once we streamline our processes, could be extremely efficient and economical while being 100% mission-aligned.

  • Sam Lai, CMO: I love that Green Canopy is a certified B Corp. Most home buyers today are still indifferent to energy efficiency in homes, but when someone buys a Green Canopy home, their super-low utility bill and amazing year-round comfort becomes an undeniable benefit to the homeowner. However, the societal benefits are less tangible. B Corp's rigorous environmental and social standards help to communicate how our homes are also better for communities and our environment. 

Each member of the team finds the B Corp certification meaningful for their own reasons, but putting some structure and accountability around those values strengthens our community and purpose. In the year since we certified, we have improved in all areas of our business and are currently working on a Corporate Social Responsibility Framework. This framework will help us develop a set of action-oriented goals for improvement, as well as help us improve our reporting and the measure of our impact. The steps we are taking, including even just revisiting team commitment to it through writing this post, help us collectively see the change and be all  the more intentional about B-ing the change.

* A B Corp is a for-profit company that is committed to gains in social and environmental capital rather than just monetary profits. It is a certification that is awarded by B Lab in Pennsylvania – an organization that scores companies based on a set of social and environmental metrics. Green Canopy’s score at certification was an 86.

Is Seattle Real Estate Reaching the Bottom...?

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by Aaron Fairchild:

You can’t go to a cocktail party these days without someone saying now would be a good time to invest in real estate. Of course, one question that always arises is, “When are we going to hit the bottom?” This is a question my father and I have been debating for the last several months. He owns and runs a local bank and my partners and I invest in real estate. He believes that the bottom is still out a fair bit, whereas I see clues that the bottom will be sooner than later. He is fond of telling me stories from the early to mid-seventies; these stories inform both of our opinions. To him, they indicate how bad it could get, and to me, they form a stunning contrast to today’s current market realities.

Let’s take a look at some of these historical clues that indicate the health of the Seattle market.  The first set of clues to examine appeared during the period from the mid 1970’s through the first quarter of 1988.  This period represented 13 difficult and depressed years in the region; the regional economic gorilla was Boeing, and they had just eliminated over 60% of their workforce, 64,000 people. According to my father, “during that time loan officers carried around quit claim deeds in their briefcases to take control of homes that laid-off Boeing engineers could no longer afford.” Furthermore, during that time he was typically lending to single-income households. There were fewer women in the workplace than today, and even if a woman wanted her income to count, FHA underwriting guidelines required a letter stating that she was using contraception.  Loan officers called it the “pill letter.”

Another story from my father relates to local consumer confidence.  At that time, he used to tell his loan officers that one of their jobs was to convince depressed real estate agents that they could actually find a client to help buy or sell a home.  People were leaving Seattle in droves, and driving past the famous billboard that read, “The last person to leave Seattle, turn out the lights.” It is hard to imagine how low consumer confidence really was, when today Seattle has far more employers than it did back then, and attracts a steady and diversified flow of employees capable of home purchases. The last time Seattle saw more people leaving than coming was in 1982.

Now let’s look at further clues that arose after the “Boeing Bust” that show what a sustainable real estate market looks like.  For the most part, my father and I agree that from 1988 until late 2000 was a period of stability in the market. Interest rates dropped into single-digit ranges, allowing homeowners cheaper and easier access to mortgages.  Inflation was low, and the economy in general was moving along steadily.  Most importantly, incomes were able to keep pace with increases in home values; as more households took on second incomes, there was more money in the household to buy or upgrade homes.  Fortunately, while there was easier access to capital than in the 1970’s, underwriting guidelines remained conservative.  To put less than 20% down on a property, you generally needed to purchase Mortgage Insurance and stringent debt-to-income underwriting ratios provided sustainability in an otherwise solid real estate market.   During this time, the correlation between incomes and housing prices remained generally constant.  This was a time of prosperity and sustainability where housing values increased at a rate of roughly 5% per year between 1990 and 2000.

The run up in property values between 2000 and 2007 provides a dramatic backdrop to where we find ourselves today. The incredible rise in property values came as a result of easy access to capital due to lax underwriting guidelines. These loans were unsustainably constructed by banks to sell into profit-thirsty debt markets.

The result in this chaos is, of course, the recent reckoning where mortgages defaulted, banks were forced to write off huge amounts of bad loans, and a glut of homes fell in foreclosure precipitating a concurrent drop in housing prices.  Now we see our final clues to indicate the market has or will soon reach bottom: we observe a return to rational lending practices, an end to wanton speculation, and unprecedented government intervention in stopping the flow of home foreclosures and increasing consumer confidence.  Finally, the real estate market is now showing signs of normalizing to more predictable, rational levels as they relate to income levels and affordability.  The Seattle housing market has not been more affordable anytime during the last thirty years.

Although it is too early to tell who will win our debate, my father and I agree that the factors which drove down housing prices are finally correcting.  Time will tell where the bottom of the market is, but the question still remains at the heart of our debate, “Could it get as bad as it was during the depressed time of the early-to-mid 70’s?” My father’s stories create the backdrop to my outlook on our local real estate market and provide valuable insight and lessons; however it is hard to imagine going back to a time where Seattle experienced negative population growth, 12% unemployment, with predominately single-income households, and only one major employer.

The clues of contrast examined through his stories and prior economic indicators provide us with lessons from our past and demonstrate just how far we have come over the last 35 years. We have certainly made mistakes and have been guilty of greed, and as a result we have paid the price in a substantial drop in property values and the vaporization of wealth borne from home equity. However, when contrasted with the clues from our past, returning to the market conditions that existed in the 1970’s seems unlikely. I believe we are likely near the bottom of a fundamentally sound Seattle real estate market.