Regenerative Finance: How to Grow A Zero-Carbon Footprint Business And Drive Financial Growth
Updated: Mar 12, 2022
Money is money — does it matter where it comes from? The short answer is: yes, the origins of your capital will play a significant role in your business. The entities from where your finances come will have a say in what your company does. Aligning your values with your financial partners is critical.
In this episode, Caroline Duell discusses how she built her green business — and why she needed the right financial partner to do it. She also discusses how to develop responsible enterprises and bring profit while minimizing negative consequences. Finally, we discuss why — and when — you should get a CFO for your business.
If you're wondering how a financial partner helps your company grow without compromising your values, this episode is for you!
Here are three reasons why you should continue reading:
Learn the benefits of social capital financing in growing your business
Recognize the significance of selecting financial partners who share your company's goal
Discover the value of bringing a chief financial officer to your business
Visit our website for more insights on regenerative finance on the Her CEO Journey™ podcast.
Her CEO Journey™ Patient Capital Series:
Venture Capital For Good: Investing in Social Impact with Lyndsey Boucherle
The Right Investment is Key: The Value of Capital for Mission-Driven Business with West Tenth - The Journey of Lyn Johnson & Sara Sparhawk
Better For All Stakeholders: Impact Investing and Investment Cooperatives with Lizette Peña
How to Heal the Planet and Create Shared Value for People with Regenerative Finance - The Journey of Mindy Christensen
Connect with Caroline: LinkedIn
[06:30] From An Herb Garden To A Multi-Million-Dollar Business
All Good started as an herb garden that Caroline used as a hobby to aid her full-time job.
Caroline and her husband then started to develop jars of medicine called “All Good Goop.”
Caroline and her husband brought ”All Good Goop” to local health food shops and sports shops.
All Good is now a Certified B Corporation, Climate Neutral Certified, and recognized as a Certified Women-Owned Business by WBENC.
Listen to the episode to learn more about All Good.
[10:10] Building A Business Without Compromising Values
Entrepreneurs need to embrace internal growth. We need to realize that companies are servants to their customers.
Business is just a form of energy exchange — nothing evil about it. Money is the vehicle that allows for that exchange.
“Business is just a form of exchange of energy, and money is the vehicle that allows for that exchange. What I have learned from this journey is that businesses are no more than just servants to their customers.”
Business owners must pay attention to their customers. Their products and services should be personal, socially and environmentally responsible.
Certifications are communication tools that can help firms measure impact and serve as benchmarks to investigate issues continuously.
Being a benefit corporation legally prevents shareholders from suing the company if they make a nonprofitable move.
[14:09] On Becoming Carbon Neutral
The first and most crucial step to becoming carbon neutral is to measure your emissions. Companies need to measure and understand the specifics of utilities used in every step of the manufacturing process.
"I think it's like a natural progression of the human spirit to try to find the quickest way to the end. It certainly doesn't serve us, and it certainly doesn't serve us along the way because, in particular, of all the unintended consequences that come out of that."
It is essential to measure emissions from sourcing products to manufacturing to transporting goods.
Planning and pre-planning have a significant impact on emissions.
"Planning and pre-planning have major impacts on emissions. If ever there's a need to rush something like if we had to air freight something over a long distance, the carbon emissions relative to that are astronomical."
[20:04] Aligning Value And Authenticity With Capital Financing
Choosing a banking or financial partner whose values align with your company is an essential pillar of business.
Consider where your money spends the night and what it’s doing.
“The way I like to consider understanding our capital partner and the importance of finance as a tool for environmental and social responsibility, as well as growing the business, is to just think about where our money spent the night.”
Some banks let you calculate what your money is doing, like Beneficial State Bank. All the data you need is transparently available on their website.
An excellent financial partner would be a social finance institution, from a lending perspective.
"Small businesses and small business community — it's incredibly difficult to get funding, so you kind of get it where you can. It's not like there's always access to something that's perfectly aligned — and that took us a while as well."
[22:24] All Good’s Capital Financing Journey
All Good's first financing was two SBA loans from Economic Vitality Corporation or EVC, a nonprofit organization that supports women-owned businesses.
The third and fourth round of lending was from Slow Money, an independent nonprofit organization that helps grow vitality in local communities.
The lending rounds allowed All Good to open a local warehouse and expand its calendula medicinal flower farming.
The lending rounds also help introduce entrepreneurs to side funding and lending and other local lenders and investors.
[26:02] RSF Social Finance
It is vital to find lenders who look beyond profile and loss, balance sheets, and cash flow.
RSF Social Finance has a deeper understanding of social businesses, making it feel like a personal relationship, unlike other primarily transactional lenders.
“With RSF, right out of the gate, it's a personal relationship. Starting out that way gives a great opportunity to grow into a beautiful partnership.”
As a financial partner, RSF Social Finance listens and considers stakeholders’ considerations and the company's practices, mission, vision, and even relationships with supply networks.
RSF Social Finance believed that All Good could respond to the high demand for hand sanitizers using a domestic supply of raw materials and components.
Caroline believes that having the same vision as RSF Social Finance drove this move. If anyone was going to step up and respond, RSF Social Finance wanted a firm on their side of the table.
"At the end of my call for help, that I was going to go for equity financing, every single person in that room said, ‘Don't do it.’ And you should go for a lender who understands what you're trying to do.”
[33:26] Community Pricing Gathering: RSF Social Finance
RSF Social Finance holds quarterly Community Pricing Gathering where lenders and the borrowers talk about interest rates, investment needs, and other business-related topics.
“It's not like, ‘I'm going in to get the most.’ It's like, ‘Let's get to know each other, understand what the needs are, and proceed accordingly.’”
RSF Social Finance lenders provide an added element. They do not go for the highest return, but they will benefit the community the most.
“People — they hash it out and work it out. In the end, it comes out and everybody agrees that it's the way it needs to be. Then, you have an opportunity to make another change in the next quarter.”
The gathering allows all community members to experience all the benefits of becoming a part of a humanized financial institution.
[37:16] When to hire a Chief Financial Officer
It depends on the business’s specific needs, but it is best to bring a CFO on board.
“In terms of when another business should bring a CFO on board — pretty early on.”
CFOs bring a whole level of sanity to the entire finance side of the business by relating it to the overall picture and helping drive strategy.
Caroline Duell was the founder and current CEO of All Good, a certified B Corporation since 2009 and 1% for the Planet member. The green business is known for sourcing organic ingredients to make “all good” products that promote good practice.
She started All Good as a medicinal herb garden, with products for headaches, skincare, and relaxation. She found that certain plants grow well together and started making potions based on these combinations.
Before All Good, Caroline worked as a climbing and mountaineering instructor at Mountain Adventure Seminars. She is also an injury rehabilitation specialist.
Interested in Caroline’s green business? Check out All Good. You can also check their All Good’s blog for more on organic farming and skincare information. You can also reach out to Caroline on LinkedIn.
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