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Are Investors Flocking to a Better Breed of Company?
By Betsy Moszeter

On April 12, 2013, Rally Software became the first publicly-traded Certified B Corporation. The Boulder, Colorado-based company priced its 6 million shares at $14, above the expected range of $11-$13, and raised $84 million against the company’s valuation of $315 million. In the first day of trading, shares jumped 28% to around $18/share. The stock closed the day on October 11, 2013 at $29.10/share-a share price increase of 108% in its first six months of trading.

The Rally Agile application lifecycle management (ALM) platform transforms the way organizations manage the software development lifecycle by closely aligning software development and strategic business objectives, facilitating collaboration, increasing transparency and automating manual processes. Companies use Rally to accelerate the pace of innovation, improve productivity, and more effectively adapt to rapidly changing customer needs and competitive dynamics.

Rally Software has been a Certified B Corporation since May of 2010. Rally states, “We became a B Corporation because we believe the software industry sits in a great spot to help enable a transition to a more sustainable economy based on Lean and closed-loop models for business that are more balanced with social equity and a more diverse ecology. Based on research reports concerning our increasing accumulation of greenhouse gases, it is mandatory that businesses get to zero carbon footprint by mid-century to enable a “soft landing” that reduces environmental catastrophes. As part of our efforts to battle climate change in our industry, our goal is to have a zero carbon footprint by 2020.”

Currently there are 830 Certified B Corps in 27 countries. The vision of B Lab, the creators of B Corp Certification, is simple, yet ambitious: people using business as a force for good. B Lab is growing a community of Certified B Corp businesses that consider their impact on all stakeholders, not simply shareholders.

B Corps are working to create a future where long-term impacts, including financial success, take precedence over short-term financial incentives. The premise is that by analyzing a company’s impact on all stakeholders over the long term, better business decisions will be made toward a more sustainable future. It follows, logically, that smarter long term business decisions should lead to increased business success. Perhaps this is why Rally Software has experienced such a strong increase in share price since its IPO…?

First Affirmative has been a Certified B Corp since September 2011.

Do you want to gain a better understanding of how your company impacts its stakeholders? Take the free B Impact Assessment to find out.

Mention of specific companies or securities should not be considered a recommendation to buy or sell that security. Past performance is no guarantee of future results.

Posted: September 25, 2013