romancatholic.biz

By CHRIS GAY

Mention “socially responsible investing” and most people think of a stock-picking strategy that involves abstinence—that is, avoiding industries or companies whose ethical, environmental or governance practices fall short of certain standards.

The mutual-fund industry began offering products based on this idea in the 1970s, and Morningstar Inc. recently identified 199 mutual funds and 23 exchange-traded funds as socially responsible. Among the industries these funds typically shun are those connected to tobacco, alcohol, pollution, weapons and authoritarian regimes.

But some involved in socially responsible investing, or SRI, say two recent developments—a long, acrimonious debate about health-care finance and the worst financial crisis in 80 years—may prompt some socially responsible investors to take a closer look at two other sectors: for-profit health insurers and too-big-to-fail banks.

Both groups “put the customer at odds with the corporation, and that is very problematic,” says Amy Domini, founder of Domini Social Investments LLC, which refuses to invest in certain banks and insurers for precisely that reason.

Both industries have drawn the wrath of the Occupy movement. To protest the power of Wall Street banks, many Occupy sympathizers have moved their deposits from large financial institutions to smaller banks and credit unions.

What if investors wanted to do something similar and move their money to funds that refuse to invest in big banks and for-profit health insurers?

Turns out it might not be so easy.

While there are a few exceptions, SRI managers generally haven’t painted big banks and for-profit insurers with the same broad brush as, say, tobacco and gambling. Indeed, some of the most prominent names in both industries can be found in some of the best-known SRI funds.

Hazardous to Health?

Unlike products and services widely considered to be harmful to the greater good, the health-insurance industry’s impact on society is a matter of debate.

Critics contend there is a fundamental conflict between the profit goals of insurers and the public-health goals of everyone else. This owes largely to the tendency of for-profit carriers to avoid the sickest individuals to the extent that they can, a problem the Patient Protection and Affordable Care Act of 2010 aims to address.

Insurers, of course, deny they add cost but no value to health care. “Health plans have pioneered the programs and services that are needed to help patients navigate the complicated delivery system to get the care they need,” says Robert Zirkelbach, spokesman for America’s Health Insurance Plans, a lobbying group that represents for-profit and nonprofit insurers. And as required by state law, 90% of policies already are sold on a “guaranteed issue” basis, meaning no applicant is turned away, he says.

The $20 million Eventide Gilead fund has avoided for-profit health insurers since its inception in July 2008, citing the industry’s basic business model. “It’s a huge financial game that these guys are playing to maximize their profits, by bringing in the most healthy people and trying to turn the screws on people who are sick,” says Finny Kuruvilla, a former practicing physician who manages the Boston-based fund. “I’ve never seen a single [for-profit insurer] that I’d feel proud about owning.”

His stance, however, appears to be the exception rather than the rule. Indeed, some of the health-insurance industry’s biggest names figure in many socially responsible funds, and they’re also in one of the oldest and best-known SRI reference indexes, the MSCI KLD 400 Social Index.

The index, formerly known as the Domini 400 Social Index, excludes companies with significant business in six industries: tobacco, alcohol, gambling, nuclear power, firearms and military weapons. Outside of those six excluded industries, companies are evaluated using metrics that attempt to gauge the company’s “social utility,” says Thomas Kuh, an executive director at index compiler MSCI.

At least three private health insurers—Cigna Corp., Humana Inc. and WellPoint Inc.—have made the cut: They represented 0.93% of the index as of Jan. 31.

Erin Gray, head of marketing for Green Century Capital Management, whose Green Century Equity portfolio tracks the MSCI KLD 400 index, says that while “it wouldn’t surprise me if individual investors want to stay away” from for-profit insurers, “I don’t see us currently taking that next step within the SRI sector—to screen out these types of companies.”

Indeed, Calvert Investments, one of the largest SRI firms in the U.S., says it holds insurers Cigna, WellCare Health Plans Inc. and Aflac Inc. in several of its SRI funds, and it holds WellPoint in a separate line of funds it calls SAGE (Sustainability Achieved through Greater Engagement).

While conceding that the U.S. way of health insurance is “imbalanced” and “imperfect,” Calvert Senior Vice President Bennett Freeman says Calvert is “just not going to fence off a whole industry.”

Too Big to Own?

When it comes to large banks, critics say excessive deregulation over several decades has produced an industry of oversized banks that get paid to gamble with other people’s money.

At least two funds—Eventide and the $211 million Appleseed fund—avoid too-big-to-fail banks altogether on ethical grounds.

“The whole concept of too big to fail is a recipe for corruption, cronyism and economic disaster,” says Adam Strauss, co-manager of Appleseed, which swore off big banks in mid-2010. “The largest banks today operate in an environment where they can take massive risks, and profit from those risks, knowing that the public will bail them out when those risks fail,” says Mr. Strauss, whose fund produced an annualized return of 6.2% in the five years through January, giving it a No. 1 ranking in its Morningstar category.

Still, the broader SRI community has no uniform approach to too-big-to-fail banks.

While Domini Social Investments shuns most large U.S. banks, J.P. Morgan Chase & Co. accounts for about 2.5% of Domini Social Equity, a $716 million fund that has beaten the S&P 500 by an annualized 2.7 percentage points over the past three years. Ms. Domini says she likes J.P. Morgan’s “impact investing”—assessing a loan on the basis of its likely social and environmental consequences, not just its financial return.

Likewise, Green Century Balanced sold Bank of America Corp. and Goldman Sachs Group Inc. but continues to hold Wells Fargo & Co., which represents 1.6% of assets, according to Ms. Gray. She says Wells Fargo “has plenty of room for improvement” on its environmental, social and governance record, but it has made laudable efforts to increase lending to poor and underserved communities.

A Wells Fargo spokesperson says the bank seeks to “provide products and services that meet the long-term financial needs of all customers in the communities we serve.”

The Rev. Seamus Finn, a board member for the Interfaith Center on Corporate Responsibility, a network of institutional investors representing faith-based organizations, says the question is whether these funds will take a harder line against big banks in the wake of postcrash changes such as the Dodd-Frank financial-overhaul law.

“Is the SRI community going to look at [those changes] and actually try to put some metrics on them and say, ‘You know, if you’re doing this, we’re not going to hold the stock?’ ” he says. “That’s where I think we are.”

Mr. Gay is a writer in New York. Email him at reports@wsj.com.

While most exchange-traded funds only venture as far as their underlying benchmarks allow, a small yet growing cadre is taking a more freewheeling approach. So-called actively managed ETFs, for which teams of managers and analysts construct portfolios, attracted slightly more than $5 billion in domestic assets in 2011. That marked a 72% increase from the prior year, but represents only a sliver of the $1.1 trillion U.S. ETF market, says data researcher IndexUniverse.

Active management dominates in traditional mutual funds. ETFs have been slow to embrace it, in part because active money managers have been reluctant to embrace ETFs, which must disclose their holdings daily. Most mutual funds are required to disclose their portfolios on a quarterly basis, which provides enough leeway, in the industry’s view, to avoid excessive speculation.

Now, however, Eaton Vance (ticker: EV) is developing an exchange-traded managed fund that is designed to be a hybrid between today’s ETFs and mutual funds. The manager of the Eaton Vance offering “would have the flexibility on a daily basis to report new holdings in a way that would avoid front-running of portfolios,” says Stephen Clarke, president of Navigate Fund Solutions, the Eaton Vance subsidiary handling exchange-traded managed funds, or ETMFs.

Clarke stresses, however, that the concept still is in development at Eaton Vance, and that regulators haven’t approved the company’s plan.

Both ETFs and mutual funds operate under the same legal guidelines stipulated by the Investment Company Act of 1940, Clarke notes. “ETFs are an innovation that [has] worked well for index funds, but they haven’t worked in a meaningful way for active investing strategies,” he says.

Will regulators go along with the hybrid approach? “Never say never, but the Securities and Exchange Commission has shown no inclination in recent years to approve more creative approaches to ETFs,” says Matt Hougan, head of ETF analytics at IndexUniverse.

ACCUVEST GLOBAL ADVISORS has launched its second actively managed ETF, the Accuvest Global Opportunities Fund (ACCU). Managers study 29 markets around the world and invest in ETFs focused on their five or six favorite parts of the globe. The renamed Accuvest Global Long Short ETF (AGLS) includes 20 different funds, and invests in ETFs in the managers’ 10 favorite markets while betting against ETFs in their 10 least-favorite countries. Accuvest recently took over management of the portfolio from Mars Hill Partners, moving away from sector plays to take a more country-specific approach. “We evaluate markets from a top-down, fundamental standpoint, a strategy we’ve been using with high net-worth investors and institutions for about six years,” says David Garff, one of the fund’s managers and president of Accuvest. The firm currently is most bullish on Thailand and the U.S., but has been betting against India and Australia.

THIS IS MY LAST ETF Focus at Barron’s. I’m moving to the Dow Jones Newswires (Barron’s, too, is owned by Dow Jones) to write an ETF column, while Brendan Conway will move from the Newswires to take up residence in this space and at barrons.com, where he will write the daily “Focus on Funds” blog. 

Comments:
murray.coleman@barrons.com

blogs.barrons.com/focusonfunds

http://twitter.com/ColemanETFs

By KELLY K. SPORS

Thinking about starting a business? Make sure you’re cut out for it first.

In this bleak economy, lots of people are contemplating striking out on their own — whether they’re frustrated job seekers or people who are already employed but getting antsy about their company’s prospects.

For some people, entrepreneurship is the best option around, a way to build wealth and do something you love without answering to somebody else. But it’s also a huge financial gamble — and some people, unfortunately, will discover too late that it’s not the right fit for them.

Building a successful business can take years filled with setbacks, long hours and little reward. Certain personalities thrive on the challenge and embrace the sacrifices. But it can be a hard switch for someone who has spent years sitting in a cubicle with a steady paycheck.

So, how can you figure out whether you’re suited for self-employment? We spoke with entrepreneurship researchers, academics and psychologists to come up with a list of questions you should ask yourself before making a big leap. Entrepreneurs, of course, come from all sorts of backgrounds, with all sorts of personalities. But our experts agreed that certain attributes improve the odds people will be successful and happy about their decision.

Keep in mind that any self-analysis is only as useful as the truthfulness of the answers — and most people aren’t exactly the best judges of their own character. So, you might enlist a friend’s help.

Here, then, are 10 questions to ask to see whether you’re up for the challenge of entrepreneurship.

1. Are you willing and able to bear great financial risk?

Roughly half of all start-ups close within five years, so you must be realistic about the financial risks that come with owning a business — and realize that you could very well lose a sizable chunk of your net worth.

Consider how much you’ll have to ante up and how losing it would affect your other financial goals, such as having a sound retirement or paying your kids’ college tuition. Weigh the importance of starting a business against the sacrifices you might face.

Entrepreneurs should be sure that “if they lose this capital, it either won’t destroy their financial situation, or they can accept the concept of bankruptcy,” says Scott Shane, an entrepreneurship professor at Case Western Reserve University in Cleveland. “Some people thrive on the financial risk; others are devastated by the thought of losing even $10,000.”

And don’t assume you’ll be able to lower your risk substantially by finding investors. Less than 10% of start-up financing comes from venture capitalists, angel investors and loans from friends and family combined, Prof. Shane says. And that’s true even in good economic times. Banks, meanwhile, often won’t lend to start-up founders without a proven track record. When they do, they generally require the founders to guarantee the loan or credit line with their personal savings or home — an incredibly risky proposition. (To learn how to mitigate risk by keeping your old job while starting a new venture, see “A Toe in the Water”.)

2. Are you willing to sacrifice your lifestyle for potentially many years?

If you’re used to steady paychecks, four weeks’ paid vacation and employer-sponsored health benefits, you might be in for an unpleasant surprise.

Creating a successful start-up often entails putting in workweeks of 60 hours or more and funneling any revenue you can spare back into the business. Entrepreneurs frequently won’t pay themselves a livable salary in the early years and will forgo real vacations until their business is financially sound. That can often take eight years or longer, says William Bygrave, a professor emeritus of entrepreneurship at Babson College in Wellesley, Mass.

Even if you can steal away, it’s hard to find somebody who can fill in for you. Many entrepreneurs must tow along their cellphone and laptop, so they can be available to answer questions from clients or employees.

Jennifer Walzer learned those lessons the hard way. In 2002, after being laid off from a $100,000 consulting job when the company closed, she started Backup My Info! Inc., which sells online data-backup services to businesses.

For the first year, the New York-based company brought in just $29,000 in gross revenue. Ms. Walzer didn’t pay herself a salary until the third year, and even then it was a slim $30,000. She could have taken more out, but she wanted to shovel as much money into the business as possible to keep it financially sound.

Having no income for two years meant that Ms. Walzer had to be extremely frugal; she virtually never ate out or went on vacations or clothes-shopping trips. Twenty-nine years old at the time, she says, “I got very jealous of my girlfriends who got home at 5 o’clock every night and could go out gallivanting and pretty much do whatever they pleased.” She’d occasionally meet friends for coffee instead of drinks, since coffee was less expensive.

Now that her business generates about $2 million in annual revenue, the tables have turned. Ms. Walzer says she earns more from the business than she did as a consultant, and “I have friends who are struggling to keep their jobs because they have bosses.”

3. Is your significant other on board?

Don’t ignore the toll running a business will take on your loved ones. Failed ventures frequently break up marriages, and even successful ones can cause lots of stress, because entrepreneurs devote so much time and money to the business.

Stephen Webster

“I’m always surprised at the number of husbands who start a business and don’t tell their wives,” says Bo Fishback, vice president of entrepreneurship at the Ewing Marion Kauffman Foundation.

You can avoid the heartache by talking at length with your spouse and family about how the business will affect home life, including the time commitment, changes in daily schedules and chores, financial risks and sacrifices. They must also understand the huge financial gamble they’re making with you.

4. Do you like all aspects of running a business?

You better. In the early stages of a business, founders are often expected to handle everything from billing customers to hiring employees to writing marketing materials. Some new entrepreneurs become annoyed that they’re spending the majority of their time on administration when they’d rather be focused on the part of the job they enjoy, says Donna Ettenson, vice president of the Association of Small Business Development Centers in Burke, Va.

“All of a sudden, they have to think about all these things they never had to think about before,” she says.

Jeromy Stallings, the 33-year-old founder of Ninthlink Inc., a San Diego interactive-marketing firm with 15 employees, always felt he had plenty of passion for entrepreneurship and self-motivation. But when starting his agency in 2003 and hiring his first couple of employees, he realized he wasn’t prepared for the day-to-day challenges of managing other people.

Mr. Stallings had assumed his passion would rub off on employees and they would do their jobs as enthusiastically as he did. But some clients started calling him directly, complaining that his employees weren’t returning phone calls or that projects were behind schedule.

“My clients were saying, ‘We love your passion, we love your skill, we’re just having a really hard time with your management style,’ ” he says.

So, Mr. Stallings turned to peers, mentors and guidebooks for help. He realized he needed to work more closely with employees and create a more structured project-management system. “I didn’t really have a plan in place for how they spend their time,” he says.

5. Are you comfortable making decisions on the fly with no playbook?

With a new business, you’re calling all the shots — and there are a lot of decisions to be made without any guidance. You might not be used to that if you’ve spent years working in corporate America, says Bill Wagner, author of “The Entrepreneur Next Door,” a book that lays out the characteristics of successful entrepreneurs.

“For most entrepreneurial ventures, there’s no structure,” he says. “You’re going into a business, and nobody has told you how to be successful.”

Mr. Wagner has surveyed more than 10,000 entrepreneurs to find out what traits distinguish successful start-up founders from less-successful ones. Among other things, most entrepreneurs he interviewed said they liked making decisions. He doesn’t rule out the idea that less-decisive people could become better at the leadership role. It’s just that they will have to work a lot harder at it.

6. What’s your track record of executing your ideas?

One of the biggest differences between successful entrepreneurs and everyone else is their ability to implement their ideas, says Prof. Bygrave of Babson College. You might have a wonderful concept, but that doesn’t mean you possess that special mix of drive, persuasiveness, leadership skills and keen intuition to actually turn the idea into a lucrative business.

So, examine your past objectively to see whether you have assumed leadership roles or initiated solo projects — anything that might suggest you’re good at executing ideas. “Were you senior class president? Did you play varsity sports?” Prof. Bygrave suggests asking.

Stephen Webster

You might even find clues back in your childhood, he adds: “A lot of successful entrepreneurs were starting businesses when they were still kids.”

7. How persuasive and well-spoken are you?

Nearly every step of the way, entrepreneurship relies on selling. You’ll have to sell your idea to lenders or investors. You must sell your mission and vision to your employees. And you’ll ultimately have to sell your product or service to your customers. You’ll need strong communication and interpersonal skills so you can get people to believe in your vision as much as you do.

If you don’t think you’re very convincing or have difficulty communicating your ideas, you might want to reconsider starting your own company — or think about getting some help.

In 2007, Brad Price left a $135,000-a-year job as an associate at a Baltimore law firm to purchase a PuroClean Emergency Restoration Services franchise, which cleans up property damage such as mold and flooded basements. A former Naval officer, Mr. Price felt he was very self-motivated and a good leader. But he was less comfortable cold-calling and striking deals — something he’d never had to do in previous jobs.

“There’s a big difference in waiting for the phone to ring and getting an assignment and having to make the phone ring,” says the 33-year-old Mr. Price.

Mr. Price says he now has his wife handle the marketing and networking. “My wife is very good at that, ‘Hey, next time a call comes in, how about you give it to us?’ ” he says.

8. Do you have a concept you’re passionate about?

Every morning you want to jump out of bed eager to get to work. If you’re not that exuberant about how you’ll be spending your time — or the business concept itself — running a business is going to be a rough ride.

Ms. Ettenson of the Association of Small Business Development Centers has coached many prospective entrepreneurs about their chosen business. She always asks why they’re doing it. If they suggest it’s mostly for the prospect of making a lot of money or because they’re tired of working for someone else, she steers them toward something more in line with their interests or avoiding self-employment altogether.

“If you hate doing paperwork, the last thing you want to do is become a bookkeeper,” Ms. Ettenson says. “If you’d rather be outside taking people into the wilderness, then that’s the type of business you should be in.”

But it’s also usually wise to find a business in an industry you are very familiar with; it will be much harder to succeed if you know little about the field. Mr. Fishback at Kauffman says he has steered a doctor and other professionals away from starting restaurants because they often don’t grasp how difficult and risky restaurant ownership is. And they’d be competing against restaurateurs with years of experience.

9. Are you a self-starter?

Entrepreneurs face lots of discouragement. Potential buyers don’t return calls, business sours or you face repeated rejection. It takes willpower and an almost unwavering optimism to overcome these constant obstacles.

John Gartner, an assistant clinical-psychiatry professor at Johns Hopkins University and author of the book “The Hypomaniac Edge,” theorizes that many well-known entrepreneurs have a temperament called hypomania. They’re highly creative, energetic, impatient and very persistent — traits that help them persevere even when others lose faith.

“One of the things about having this kind of confidence is they’re kind of risk-blind because they don’t think they could fail,” Prof. Gartner says. And, he adds, “if they fail, they’re not down for that long, and after a while they’re energized by a whole new idea.”

You don’t have to be as driven as, say, Steve Jobs to succeed. But somebody who gets deterred easily, or too upset when things go wrong, won’t last.

10. Do you have a business partner?

If you don’t have all the traits you need to run the show, it’s not necessarily a hopeless endeavor. Finding a business partner who compensates for your shortcomings — and has equal enthusiasm for the business concept — can help mitigate the risks and even boost the odds of success.

David Gage, co-founder of BMC Associates, an Arlington, Va., business-mediation practice, points to a Marquette University study of 2,000 businesses. The researchers found that partner-run businesses are far more likely to become high-growth ventures than those started by solo entrepreneurs.

The key, Mr. Gage says, is finding a partner who prefers handling different aspects of the business, so you’re complementing each other — and not constantly at each other’s throats.

Someone who likes to take risks and be in the spotlight, for instance, might choose a cautious partner who prefers to work in the back room. “If they’re willing to work with that person, and not just look at them as a wet blanket, then it can be great,” Mr. Gage says.

But taking on a partner isn’t a light decision. Many partnerships split due to conflicts over everything from attitudes about money to miscommunication and contrasting work ethics. Mr. Gage recommends that potential partners spend several days hashing out the specifics of the business and how the arrangement will work to see if they’re compatible.

—Ms. Spors is a staff reporter of The Wall Street Journal in Minneapolis.

Write to Kelly K. Spors at kelly.spors@wsj.com

Printed in The Wall Street Journal, page R1

By ANGUS LOTEN

A brownie supplier to Ben & Jerry’s ice cream, a skateboard maker and a payday lender are among the hundreds of existing businesses that plan to incorporate as “benefit corporations” in coming months.

They will be taking advantage of a new and untested corporate charter, available in only a half dozen states, allowing a company’s governing board to consider social or environment objectives ahead of profits. The legal structure is intended to shield the board from investor lawsuits.

That anything other than maximizing shareholder value should be considered in a company’s decision-making normally can open the door to investor suits.

But in the past two years, lawmakers in seven states, including Maryland, Virginia and New Jersey, passed legislation to create benefit corporations as an alternative business model.

California opened up the option Jan 1. New York will do so as of Feb. 10.

Outdoor-apparel company Patagonia Inc., which places high priority on sustainable and renewable production methods, incorporated under the new structure in California this month.

“We’re trying to preserve for the long-term the way our company is run,” says Casey Sheahan, chief executive of the Ventura, Calif., company, which was founded in 1972 and had nearly $500 million in revenue in 2011.

In Mr. Sheahan’s view, traditional corporate structures don’t encourage boards of for-profit companies to sacrifice shareholder value for a public good.

The benefit corporation isn’t tax-exempt, nor is it a nonprofit. It is one of several new legal structures to emerge alongside the rise of “social entrepreneurship” in recent years.

Some proponents of the benefit corporation believe its biggest value may come at the time of the sale or breakup of a business, because directors might be able to consider factors other than maximizing shareholder value. The legal structure “tells directors that it’s their duty to consider other interests, rather than say they ‘may’ consider them,” says William Clark, a partner at Drinker, Biddle & Reath LLP, who helped draft model benefit-corporation legislation.

This was an issue for Ben & Jerry’s Homemade Inc., the ice cream company sold to Unilever PLC in 2000, despite the objections of co-founder Ben Cohen and some directors. “There was a lot of pressure from the lawyers to sell,” says Jeff Furman, a Ben & Jerry’s director since the 1980s and its current chairman.

If benefit corporations had existed back in 2000, the board probably wouldn’t have agreed to the Unilever deal, Mr. Furman says.

Ben & Jerry’s now plans to incorporate as a benefit corporation in Vermont within the next few months, he adds, through pressure from its current board. Unilever declined to comment.

By law, a benefit corporation’s social and environmental goals must be laid out in the bylaws and the company must publish an annual “benefit report” to measure itself against those goals.

The idea has its share of critics. “For an investor, this is a terrible idea,” says Charles Elson, who teaches corporate governance at the University of Delaware. “The structure creates a lack of accountability,” he adds, so if the management of a benefit corporation makes a bad decision, “there’s very little you can do about it as a shareholder.”

Others say that companies can simply add specific goals into their articles of incorporation under existing corporate codes, making a benefit-corporation designation unnecessary.

It costs about $30 to incorporate as a benefit corporation, not including fees paid to outside lawyers. The incorporation isn’t to be confused with “B Corp” certification, which is a privately administered program to label companies aiming to tackle social and environmental problems.

B Corp certification can be obtained in any state, for fees ranging from $500 to $25,000 annually, depending on revenue, according to B Lab, the Berwyn, Pa., nonprofit that developed benefit corporation legislation and oversees the certification process for about 500 firms.

While B Corp certification can be used for do-good marketing purposes, it wouldn’t hold up in an investor lawsuit.

Jonathan Harrison, chief executive of Emerge Workplace Solutions, says it plans to incorporate as a benefit corporation in New York next month. He sees the new legal structure as a tool to help his 18-month-old San Francisco business stand apart from other payday lenders that charge higher interest rates and fees for workers needing fast cash between paychecks.

“It’s really important for us to have a designation that we’re the good guys,” he says. His six-employee firm offers short-term emergency loans to hourly workers at annual interest rates from 9% to 19.99%, in contrast to the 400% typically charged by payday lenders. Emerge also provides financial coaching and other services to help the working poor.

The company’s seven investors include a national bank. They support the move to become a benefit corporation, Mr. Harrison says.

Mike Brady, the president of Greyston Bakery, a Yonkers, N.Y., supplier of brownies to Ben & Jerry’s, says benefit corporations “add another level of accountability and transparency.”

The bakery, which had $8 million in sales last year, and has 50 full-time employees, hires from its local, underprivileged neighborhood. It also supports affordable housing and child care for low-income earners through a separate nonprofit foundation.

Comet Skateboards, Ithaca, N.Y., has been preparing the paperwork to incorporate as a benefit corporation since early last year, according to Jason Salfi, owner of the 10-employee firm, which uses eco-friendly materials and recycles old skateboards that are brought back.

Mr. Salfi says the company’s B Corp certification has already earned points with customers. “You’d be surprised how much people care about these issues,” he says.

Write to Angus Loten at angus.loten@wsj.com

Printed in The Wall Street Journal, page B1