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Controversy batters B Corp, ESG initiatives

The following is a guest post from Mark Lusky, president of Lusky Enterprises, Inc.

Such Corporate Social Responsibility (CSR) initiatives and certifications as ESG and B Corp are getting buffeted by corporate and political polarization around “doing good” versus “doing well.”

The former addresses a commitment to help corporate stakeholders—including customers, clients, employees, partners, communities, planet, and investors. The latter focuses on creating shareholder value at the expense of other stakeholders.

Also impacting CSR programs is the specter of “greenwashing,” untrue or exaggerated claims around environmental advocacy to rev up investment and revenues. Also prevalent is the more general term “goodwashing,” describing companies that are not authentic in their support of any number of stakeholders.

Recent bank failures and financial upheaval have intensified the debate. Some corporate executives and right-leaning politicians blame the bank crisis on insufficient regulatory oversight due to preoccupation with ESG and other CSR efforts. One prevailing position in this camp is that the bottom line is the only line that counts. CSR champions counter that companies “doing good” can lead to “doing well,” so all stakeholders, including investors, win.

Three fintech companies invested in B Corp and CSR initiatives are proving that financial success and stability can co-exist with authentically supporting multiple stakeholders.


CNote, B Corp certified since 2019, is a women-led fintech platform that uses technology to unlock diversified investments in community financial institutions serving under-resourced communities. Co-founder Catherine Berman reports that the company is growing and thriving with a business model that creates value for all stakeholders. Instead of following the traditional path of trying to grab a more significant piece of the pie for themselves, CNote works to increase the size of the pie for everyone. 

PayActiv, B Corp certified since 2015 and recognized by B-Labs as “Best for the world” two years in a row, is a successful employer-sponsored financial wellness platform and the leader in Timely Earned Wage Access (EWA). Payactiv gives employees access to their wages as they earn, so they can meet obligations and avoid penalties. Creating a Payactiv account is free for all users and comes with a comprehensive digital wallet and a Visa debit card. The app contains many free features, including bill pay, prescription discounts, financial counseling, and budgeting and savings tools.

Climate First Bank, the nation’s first climate-focused community bank, reports $318 million in assets and a ranking in the top five of new bank charters in its 21st month in operation, according to CEO, Chairman, and Founder Ken LaRoe. Awaiting final approval of its B Corp certification, Climate First Bank offers full-service personal and commercial banking services focusing on environmental sustainability. Residents and businesses may access various green loan products that address everything from rooftop solar to renewable energy for building retrofits.

hand putting a band aid on smoke stack. Greenwashing malpractice concept

How much credibility is all this generating?

CNote’s Catherine Berman points out that such initiatives as B Corp certification are “door openers. We transparently share our social, environmental, and governance performance when more transparency is needed. Many corporations continue to work on how they showcase ESG impact. There is greenwashing, and there are genuinely good intentions. Regardless, gauging the actual impact is essential to demonstrating substantial progress.”

Berman says overall, she sees “a forward movement of measurable work. I see our success as a signal. More and more corporations want to invest in communities with transparency. Increasingly, stakeholders are demanding both corporate responsibility and results. If the Wall Street Journal comes knocking, you need hard data to prove financial success and authenticity.” Companies that can’t or won’t respond to stakeholder concerns about environmental and social impact are seeing their reputations suffer and credibility decline.

Berman adds that as consumers learn more about designations like B Corp, they will use them to make buying decisions with committed and authentic companies they view as trusted.

Payactiv’s Safwan Shah points out that consumers, generally, don’t know much about such programs as B Corp yet.

“For us, B Corp has been a voluntary certification to codify our purpose. The notion of purpose has to transcend people across the organization. Every year, we test our principles. There is evolution toward more knowledge, understanding, and valuing of these efforts among the general population,” Shah says.

“We’ve been a B Corp for eight years. More than just ‘checking the box,’ it demonstrates an objective standard we meet. It’s not just a self-established standard. Increasingly, buyers and prospects value it. And businesses want this type of collaboration and contribution.”

Climate First Bank’s dedication to sustainability and conservation is documented through its B Corp certification-in-waiting. According to Ken LaRoe, it’s helping drive internal processes that validate B Corp requirements and serving as a recruitment and retention tool and capital-raising catalyst.

Notes LaRoe, “It’s a benefit in hiring talented individuals who want to be part of our world. It helped us generate a good bit of capital in our initial raise because of B Corp values. It was a topic of discussion among a number of them.”

LaRoe adds that efforts to aid multiple stakeholders are ongoing and expanding, especially in the financial inclusion space and racial equity.

“We are trying hard. Hold me accountable to make it happen. With B Corp certification comes a responsibility on our part to educate and influence. Part of that is addressed in our vision: ‘reimagine finance as a force for good and become the most impactful bank contributing to the drawdown of atmospheric CO2.’ As one of only two B Corp banks in the southeastern United States, we have our work cut out for us,” LaRoe notes.

Doing good AND doing well

Recapping that the bank’s overall CSR efforts, including B Corp, are helping recruit talent, land customers, and build credibility, LaRoe emphasizes that in addition to doing good, the bank is doing well financially: “We figure our overall ESG efforts are working. We’re doing phenomenally,” in terms of the bottom line.

Berman remarks, “Two things we are actively doing are helping corporations and others to make deposits and investments in institutions that are moving the needle on racial, gender, and climate justice; and helping our bank and credit union partners tell their stories so that they can attract more business and attention. Our technology is the key to corporations putting cash to work in under-resourced communities at scale—while diversifying their cash holdings and earning comparable returns.”

Emphasizes Berman, “All of this is much more than ‘check the box.’ There’s a danger in setting a low bar and meeting it. We are supporting companies and other investors that see the need to do more in climate, racial equity, and encouraging investment tied to value and positive movement.”

Payactiv’s Shah asks, “How do you toe the line in all these areas, thoughts, actions, and core values? We’re very proud of that. After five years, we had to register as a public benefit company with a higher threshold to meet. Essentially, we’re now a corporation created for public and social good with a stated purpose included in our articles of incorporation. We’re here to alleviate financial stress for our customers—giving them timely access to earned but unpaid wages to help with cash flow.”

While Payactiv has gone all in on their CSR commitments, Shah says he has “respect for anyone trending toward this. At least companies are doing something. Ultimately, your brand is how you turn up every single day. If a company doesn’t fulfill ‘making good’ brand promises, a marketplace demanding more will call them on it. As a conscious capitalism board member, I view businesses as empowering and supporting their communities and as the bedrock of the economy.”

LaRoe sees the day coming when banking prospects consistently look for B Corp certification as part of their buying decisions. While there’s room and need for continuous improvement, LaRoe points out, “It’s the best there is. We’re proud to be affiliated with B Corp and held to its standards. There’s always room to improve by requiring enough points across all categories to cover the entire stakeholder continuum.”

Current tug-of-war between opposing forces around ESG and its cousins (including B Corps)

Banks fail. Republicans blame ESG et al. Democrats blame the weakening of regulations under Trump. Corporate executives are lining up on both sides of the argument.

Berman keeps her focus on real-world data. “The community finance institutions we partner with—banks, credit unions, and lenders—have proven over decades that investing in community wealth and wellbeing pays off in financial and social terms,” emphasizes Berman. “When companies highlight the impact they are having, and their positive influence on attracting and retaining the best talent, it differentiates them from competitors. There’s also incredibly positive ROI regarding growing positive reputation, brand influence, and customer bases.”

Within fintech, notes Shah, there is currently a minimal emphasis on doing good and doing well.

“Fintech wants to monetize quickly and doesn’t see the long-term effects of CSR programs. Slowly, we can peel the onion in this industry to become a win-win business model where the financial services company and its stakeholders all win.

Currently, in fintech, the business model too often promotes profits even when the stakeholders—including customers and employees—lose. That’s unsustainable and bad business; it is a problem that needs to change so that both sides win.”

LaRoe is even more adamant, disparaging current efforts in Florida to hamper ESG efforts. “We’re in their crosshairs.

DeSantis and others are making a big push to push out any fund with an ESG interest. There’s a campaign against doing business with such ESG-prominent organizations as BlackRock. They also are trying to get people not to do business with ESG-affiliated companies, including Climate First Bank. If Florida’s politicians get their way, we won’t be able to take public funds.”

This tug-of-war will only intensify with social, political, and corporate polarization. It will be a long, bumpy ride as corporate America in general—and fintech specifically—evolves toward a world where all stakeholders, not just shareholders, are honored, respected, and acknowledged.

  • Mark Lusky

    Mark is the President of Lusky Enterprises, Inc., a 40-year established marketing communications company that champions customer service-driven marketing focusing on thought leadership articles, blog posts, social media, content libraries, whitepapers, and books.