The Redwoods Group 2012 Social Audit

2012 Social Impact Audit Completed February 2013 The Redwoods Group

BY: Rawlins Parker, MBA

Table of Contents

Executive Summary

3

Introduction

3

Report Metrics and Methods

4

5

A 360° View of The Redwoods Group’s Social Impact

5

2012 Landscape: A Year of Reflection

-­‐ Governance

5

-­‐ Employees

6

9

-­‐-­‐ Customers

10

-­‐-­‐ Partners

11

-­‐-­‐ Vendors/Suppliers

12

13

Progress on Prior Years’ Social Audit Recommendations

14

Findings and Recommendations

15

Conclusion

16

Appendix A: B Impact Report Details

17

-­‐ Community Stakeholders

-­‐ Environment

- 2 -

Executive Summary

The Redwoods Group (‘Redwoods’) 2012 social audit serves to publicly report on the company’s social impact performance during 2012. Specifically, this report will identify strengths and opportunities in the calendar year 2012, compare progress on previous years’ opportunity areas, and make recommendations on how to enhance impact going forward.

Throughout 2012, Redwoods continued to create high-­‐quality social impact through its leadership in scaling safety training programs among its customers and community partners, in addition to its day-­‐to-­‐day customer service and risk management work.

Redwoods also successfully began a restructuring of its business model and a refocusing of its strategies to ensure long-­‐term sustainable social impact. The organization also maintained its employee-­‐based community work within the Triangle and continued to develop its social enterprise culture internally. However, employees still seek more information specifically about Redwoods’ social impact metrics and how they are relevant to their everyday responsibilities.

2012 Strengths • Strengthening structures and strategies to ensure Redwoods’ ability to continue to serve others, forever.

• Scaling social impact through 1) customer and community partnership programs (i.e.

Darkness to Light/Partnering in Prevention and the Redwoods Institute), and 2) a re-­‐ focused Foundation that leverages all forms of capital to increase impact.

• Increasing engagement with and education about socially-­‐minded businesses across all of its stakeholders, including employees, customers, community partners, and vendors.

• Redwoods staff showcasing Redwoods’ commitment to ‘service before self’ through customer relationships and community partnerships.

2012 Recommendations • Continue to educate employees about Redwoods’ social enterprise status, its B Corp certification, and how its mission is relevant to their day-­‐to-­‐day responsibilities.

• Increase employee engagement with and awareness of the Foundation’s newly refocused work that aims to scale impact through expanded use of capital sources.

• Create a series of measurements and metrics to assess the outcomes of Redwoods’ social impact programs.

• Create a mechanism for employees to share experiences and stories, as a means to educate, inspire, and build internal culture.

Introduction

Founded in 1997, The Redwoods Group is a privately held social enterprise that operates as a highly specialized provider of property and casualty insurance underwriting, risk

- 3 -

management, and claims adjusting services. The company is the largest national provider of those services to child-­‐serving organizations: YMCAs, Jewish organizations and nonprofit residential camps. The business and social mission of Redwoods – whose motto is to “Serve Others” – is to protect and improve the quality of life in the communities it serves.

Due to its belief that business can and should be a powerful force for positive social change, Redwoods annually commissions an examination and evaluation of its social performance by an external party. This report, or social audit, serves as a means for the company and its leadership to assess the organization’s social impact, including its policies, practices and effects on all company stakeholders.

Report Metrics & Methods

The foundation for this social audit is The Redwoods Group’s 2012 B Impact Assessment, which examines company governance, employee policies and practices, community and environmental impact, and its social enterprise business model. In 2009, Redwoods became a certified B Corporation, to join a growing group of more than 680 companies, across 60 industries and 24 countries, with the goal to use the power of business to solve social and environmental problems. (B Lab, the non-­‐profit organization behind B Corporations, certifies member companies.) The B Impact Assessment quantifies how certified companies create impact on behalf of stakeholders. To become a B Corp, companies must score 80 out of 200 points, review and submit supporting documentation to B Lab staff, and then be open to a random on-­‐site review (10% of B Corps are selected randomly for on-­‐site review).

Redwoods most recently took assessment version 3.0, a revision that resulted in increased rigor and updated reporting categories.

While the B Impact Report is increasingly seen as the gold standard in impact assessment, it does not fully capture Redwoods’ evolving social impact landscape, including its proactive prevention and risk management work with customers or the progress made on recommendations from previous years. Therefore, this social audit will also examine company impact in these areas.

Building on the B Impact Assessment, this audit presents a broad picture of Redwoods’ social enterprise practices, including in-­‐depth interviews with stakeholders (employees, customers, community partners, vendors), an internal employee survey (conducted among 75 employees; a 57% response rate), an external stakeholder survey (conducted among 100 customers, vendors, and partners; a 24% response rate; participation was 75% customer, 17% vendor, 8% partner), and an in-­‐depth analysis of media coverage and company records on social impact programs. Note that this audit has included vendors as a new external stakeholder group, in order to assess a more holistic view of Redwoods’ social impact. The social audit also analyzes Redwoods’ 2012 social impact against previous years’ social audit goals and recommends areas for growth in 2013 and beyond. The 2012 B Impact Assessment was completed in winter 2012-­‐13. The social audit was conducted in January 2013.

- 4 -

Note on prior year social audit: The Redwoods Group was recertified as a B Corp in December 2012, based on business policies and practices from calendar year 2011. Based on B Lab’s facilitation of that recertification process, Redwoods’ 2011 B Impact Assessment score was officially revised to 114.

2012 Landscape: A Year of Reflection

As showcased in the CEO’s letter this year, 2012 was a year of reflection at Redwoods.

Redwoods re-­‐examined not only its business model and relationships, but also its external social impact commitments, internal employee engagement, and overall long-­‐term sustainability. What has emerged is an organization that is beginning to put into motion a number of changes that it hopes will ensure a stronger, sustainable, socially-­‐minded business that is able “to do good, forever.”

A 360° View of The Redwoods Group’s Social Impact

Overview

Redwoods is consistently a standout leader among the B Corp community, and was recognized in B Lab’s 2012 Annual Report as a company in the top 10% for overall impact among fellow certified B Corps. Additional highlights follow: • In 2012, The Redwoods Group scored a 117.9, up 3.9 points (3%) from its revised score of 114 the previous year, and up 12.9 points (12%) from the 105 point average of all B Corps.

• Redwoods scored 40% higher than other sustainable business (average score: 84) who have taken the B Corp Impact Assessment.

• Redwoods was also recognized in B Lab’s 2012 Annual Report as a company in the top 10% for community impact among fellow certified B Corps.

• Redwoods is noted for its excellence in Governance, Workers, and Community.

See Appendix A for B Impact Report details.

Company Governance

Throughout 2012, The Redwoods Group continued to remain committed to integrating its social mission across and within its corporate governance. In fact, through its 2012 reflection work, Redwoods began modifying key components of its governance structure to ensure that it is organized to be successful forever. It also maintained its explicit commitment to social impact in its governing documents and continued to use social impact goals in employee performance reviews. A few other key highlights are below: • Redwoods has de-­‐centralized its strategy development from its CEO to its employees as part of an initiative informally called “Redwoods 2.U.” It created employee-­‐driven committees focused on 5 key elements of the business (3 of them directly related to social impact). Approximately half of the employees are participating in this new framework.

- 5 -

•

•

Redwoods hired its first full-­‐time Executive Director for The Redwoods Group Foundation, who refocused the Foundation’s strategy on safety, which is in direct alignment with Redwoods’ mission and core competencies. The Foundation is re-­‐ thinking how it can work with the business side of Redwoods to scale social impact through using all of their joint, available resources/capital: human, intellectual, social, physical and, of course, financial.

Redwoods announced the formation of an Employee Stock Purchase Plan (ESOP) beginning in 2013, which will give an ownership stake in the company to all employees who choose to participate. Redwoods leadership has set a goal of selling and granting 20% of the company to its employees over the next few years.

Employees

Redwoods employee engagement and satisfaction remained extremely high during 2012.

The B Impact Assessment noted no significant changes related to employee ownership or work environment. It did note a decrease in the number of employees, as compared to 2011.

Those positions were not back filled likely due to Redwoods’ refusal to lay off anyone during the recession or insurance soft market in conjunction with a redistribution of work across current employees. While the ESOP plan (discussed above) was announced in 2012 to much employee excitement, it does not affect the assessment score as it will be implemented in 2013. However, Redwoods’ employees did participate in a profit-­‐sharing bonus plan at a 1% increase from 2011, totaling up to 2% of an employee’s salary.

Outside of the B Impact Assessment, across the in-­‐depth interviews and the employee survey, Redwoods employees speak to their overall satisfaction with the company and its social impact in 2012, which remains consistent across many years. Employees are proud of how Redwoods shares its story by modeling and communicating its social impact focus to stakeholders; they also see a significantly increased connection between their day-­‐to-­‐day work and the social impact mission and value the positive impact created through Redwoods’ partnerships across various organizations, including Habitat for Humanity and Darkness to Light. Employees also note support of Redwoods’ year of re-­‐evaluation and believe it is ensuring long-­‐term stability by making tough decisions about its business practices, while retaining commitment to mission. However, employees also indicate a desire for even deeper engagement with Redwoods’ social enterprise status by learning more about its B Corporation certification and being more engaged with the Foundation’s work.

In response to similar employee requests and previous social audit recommendations, Redwoods also created a Social Enterprise Committee to educate employees about Redwoods purpose and how every aspect of the business is connected to it. The committee began the process in 2012 by asking, “Do we matter?” While the committee is still refining its purpose statement, it did create a social enterprise curriculum that was beginning to be disseminated to employees in 2012. Additionally, the Redwoods Community Outreach committee redefined its focus to mainly supporting the development of future board leaders and created a curriculum to support its work. While it was more active in 2012, other employees already not involved seek to know more about its work and relevance.

- 6 -

Highlights from the 2012 Employee Survey and Interviews • Employees have significantly increased their satisfaction across a number of topic areas o 100% of employees report satisfaction with their employee experience, up from 89% in 2011. 43% are extremely satisfied. o 91% of employees (up from 85%) are satisfied with the number of community projects in which Redwoods is involved. o Employees also increased their satisfaction to 81% (up from 75%) with the different types of social issues on which Redwoods focuses.

• Employees continue to note volunteer/charitable activities and engagement with community partnerships as highlights from 2012. Examples include Habitat for Humanity, Dollars for Doers, and the YMCA-­‐Darkness to Light partnership initiative called ‘Partnering in Prevention.’ Employees observe that this allows for both increased employee bonding as well as increased motivation of external stakeholders.

• Redwoods community programs continue to positively impact employee personal service and giving overall, however it did decrease slightly in 2012 to 71%, down from 77%. Specifically, the percent that said it is a big positive impact decreased the most (27%, down from 44%). That could be due to the noted increase in the amount of work required of individual employees during 2012, attributed to the workforce’s decrease in size. 50% of employees said work and family responsibilities were the biggest thing that kept them from participating more.

Recommended Attention Areas from the 2012 Survey & Interviews • Employees do not have a strong sense of the company’s B Corporation metrics and largely do not consider them in their regular responsibilities. 24% of employees do not know what the B Corps metrics are, and another 17% are aware of them, but never consider them. Another 43% only consider them infrequently, on a monthly basis or less.

• 26% of employees are unsure about why Redwoods’ social enterprise status (including B Corp and Green Plus certifications) is important. However, more employees do see its status as important to attract top talent and retain more employees (48%, 41%, respectively). Additional feedback shows that employees see it as the right thing to do, but seek more information about how the mission relates directly to and positively impacts its business.

• The number of employees who participated in the Community Volunteer Leave program (86%) and the Redwoods Charitable Match Program (59%) was slightly lower than 2011, although still consistently high. As in previous years, Charitable Match Program participation has been significantly lower than participation in the Community Volunteer Leave program – likely because volunteer leave is mandatory and incorporated into employee performance reviews; additionally, interest in the charitable match program is one of the lowest (57% of employees say they are very or somewhat committed to this activity).

In general, Redwoods employees were very positive about their experiences in 2012 and feel - 7 -

Redwoods maintained its mission and upheld its commitments to workers, though a few voice concern around employee workload and work-­‐life balance. Several employees also note the renewed focus on safety as a significant way that Redwoods is working to uphold its mission, while others note that there is always more work to be done. Some employees wish there were a mechanism for employees to share experiences and best practices with each other. Below are survey comments that embody themes within employee feedback:

How well do you think Redwoods maintained its mission and upheld its employee commitments in 2012?

• “I feel in 2012 there was a greater focus on the organization's mission and focusing on target areas.”

• “Commitment to better understand our communities’ challenges and how we can effectively help.”

• “[Partnering in Prevention] has a good chance to dramatically reduce child sex abuse.”

• “We are maintaining our mission, but…it has been difficult to balance that with commitments to employees, especially in the area of work-­‐life balance.”

• “If we ever think we've performed ‘Extremely Well,’ we'll have officially lost our edge.”

• “I think that management was transparent, kept us well informed in a timely manner and delivered on most of the key goals for the year.”

• “So many of our efforts in 2012 were directed towards the safety initiatives that connect us to the people in our partner communities.“ • “Many job responsibilities are dealing with the insuring transaction rather than directly with safety in our clients.”

• “The company was determined to increase profits in 2012 to demonstrate its sustainability, but it did so without laying off staff (in fact, we hired as many as we lost) or cutting benefits.”

My recommendation, concern or idea to strengthen Redwoods Group employee engagement is...

• “More small, cross-­‐discipline groups to create a stronger company culture.”

• “More training/better on-­‐boarding to understand B Corp, changing roles for more direct client interaction, better understanding of our clients through hands-­‐on training and helping us become subject matter experts on safety.”

• “More information and engagement of the Redwoods Foundation.”

• “More effort placed on celebrating successes of employees.”

• “To allow the employees to hold management accountable without feeling intimidated.“ • “Make it fun.”

• “We need more success on the traditional business metrics so that employees see progress in their career path.”

• “Implement some of the many ideas that are generated via various sources of input.”

• “Continue with the transparency and communication with us in meetings, emails outlining where we are, what the goals are and where we are going.”

• “Always listen and respond. When Employees play a role in decision making there is usually a greater positive workforce.”

- 8 -

My most positive experience with the Redwoods Community Investment Programs was ...

• “Swinging a hammer at Habitat house in Durham.”

• “Engaging with co-­‐workers to accomplish positive change in the community.”

• “It was such a gift to have the Dollars for Doers program in place to help strengthen a tutoring program that needed assistance in 2012.”

• “Mentoring a sixth grader through a YMCA's program.”

• “I've never heard of the term ‘Redwoods Community Investment Programs.’”

• “Reward of seeing hope in the eyes of someone that had once given up on themselves.”

• “Volunteer non profit board service.”

• “The start of the stock program.”

My recommendation, concern, or idea for the Redwoods Community Investment Programs is ...

• “I would like to know more about the foundation.”

• “More opportunity for employees to tell the stories that have impacted them as well as the stories of why they are passionate about their service work.”

• “That the program…expands to work alongside The Foundation.”

• “Send out quarterly updates of what has been done to excite folks about opportunities. In addition consider having employees who have engaged send out notes about their experiences.”

• “To better develop staff into volunteer leaders.”

Community Stakeholders – Customers, Partners, and Vendors

During 2012, Redwoods deepened its commitment to customers, community partners, and its vendors through a variety of expanded initiatives. Satisfaction with Redwoods was extremely high across all stakeholder groups, as common themes of impressive customer service, in-­‐depth educational opportunities, and successful partnership development emerged.

General Stakeholder Highlights from 2012: • 100% of stakeholders were satisfied with their overall experience, with 79% extremely satisfied.

• Additionally, 68% of stakeholders draw a connection between Redwoods’ Serve Others mission and their relationship with Redwoods. Across all stakeholder groups, a recurring theme was overwhelming satisfaction with personal interactions of Redwoods staff and Redwoods’ commitment to “service before self.”

• 100% of stakeholders said Redwoods has been successful positioning itself for a 'sustainable future,’ or the long-­‐term ability to maintain its mission to Serve Others and maintain or improve its current level of customer/supplier/community partner engagement, with 77% indicating very successful.

Recommended Stakeholder Attention Area from 2012: • Another theme that emerged across all feedback mechanisms was a lack of

- 9 -

understanding about Redwoods’ social enterprise status (including B Corp and Green Plus business certifications) and community investment programs. 36% and 32% of stakeholders noted that they were not aware of Redwoods social enterprise status or its employee volunteer and charitable match programs. However, of those that were aware of its social enterprise status and charitable programs, 90% and 88%, respectively, were influenced to stay with Redwoods because of them.

More specifically, during 2012, Redwoods continued to foster its partnership with its YMCA customers and Darkness to Light (D2L), a non-­‐profit dedicated to reducing the incidence of child sexual abuse through public awareness and education. Redwoods continued its leadership role in getting Ys to commit to training their staff and community members through the D2L program. Building on its 2011 facilitation of MA, DE, and NJ statewide adoption through its Partnering in Prevention initiative, Redwoods helped facilitate two other statewide YMCA alliances in PA and CA. Also, the overall number of involved YMCAs has doubled in 2012. To date, 90 YMCAs are involved across 18 states and DC, and 20,000+ adults have been trained through D2L’s program. Redwoods has also devoted 2 staff members to continuing its facilitation and scaling up of the program.

Customers

Amid this, Redwoods maintained high-­‐quality service and partnerships with YMCA, Jewish Community Center, and nonprofit resident camp customers, the first line of impact in its mission to serve others. Customer feedback was overwhelmingly positive about Redwoods, applauding its high quality service, responsiveness, and accessibility. Customers frequently acknowledge its unique attentiveness to risk management and its role as a leading “catalyst for positive social change” in the industry. YMCAs appreciate working with a company that understands “service before self” and works with them proactively to address risks.

As the company continued to build partnerships with its customers, it also sought to improve its social impact through expanding its supportive service offerings. The Redwoods Institute, a free online training platform for customers, expanded its reach by increasing its total users by 21% (to 51K users). Its 21 training modules provide additional support to help customers prevent drowning, injury, abuse, and vehicular accidents. Additionally, Redwoods hosted 14 webinars in 2012 (up from 2 in 2011) with an average of 140 attendees, and increased distribution of its newsletters (Risk Management Solutions and Safety & Society at Camp) by 30%. Customers are aware of these resources and have responded to them favorably. Despite many indicating they’re not using these resources as frequently as they would like, the number of Institute courses taken by customers did increase by 35%.

Redwoods could potentially explore ways to further engage customers with theses resources, which would ultimately help customers to improve safety practices and further Redwoods’ social impact mission.

Customer feedback indicated that most are well aware of Redwoods’ focus on social impact and supported the company’s goals and objectives outside of risk management and prevention. However, as customers, they ultimately most value and appreciate Redwoods for its excellent customer service. A few also noted the importance of price in the volatile

- 10 -

insurance market. While those customers noted the intention of staying with Redwoods, even with a slightly higher price, it was indicated that price was a significant consideration.

Still, Redwoods sought to expand its social mission across customers in 2012. This was most evident through its Partnering in Prevention initiative with YMCAs and Darkness to Light.

Not all customers interviewed for the social audit were involved in Darkness to Light, but most mentioned they felt that it was important work and would like to be involved in the future. Redwoods also made grants to a number of YMCAs, both customers (48%) and non-­‐ customers (52%). Three-­‐fourths (75%) of the 166 donations made through the Redwoods Foundation went to YMCAs around the country, although only 47% of the total dollars.

Approximately half (45% in number, 47% in dollars) of the non-­‐YMCA donations were made through Redwoods’ employee charitable match programs. Redwoods also donated human capital to its customers through on-­‐site training programs that were well received and appreciated.

Community Partners

In addition to expanding the Darkness to Light-­‐YMCA Partnering in Prevention program this year, Redwoods and its employees continued to make grants to and serve in a wide range of nonprofit organizations. Almost 193 hours (a 68% increase from 2011) across 10 non-­‐ profits were matched with in-­‐kind charitable donations through the Dollars for Doers program, which donates $10/hour for each employee hour donated outside of traditional work hours. Redwoods and its associated Foundation made grants to 196 different charitable and not-­‐for-­‐profit organizations around the country, the majority to YMCAs, Jewish organizations, and resident camps. Redwoods employees are also very active in the community; they actively participate in everything from Durham and Wake County Habitat for Humanity house builds to leading one of the largest fundraisers every year for St. Baldrick’s. Redwoods even loaned one community partner a Redwoods ‘star’ employee (after a rigorous application process) on a part-­‐time basis to help with a fundraising campaign and is seen by that partner as its “most engaged supporter.”

Building on the success of 2011, the CEO of Redwoods again led CEOs from other local companies in a Habitat for Humanity “CEO Build.” Participation grew from 15 to 36 CEOs, with plans to expand to 75 in 2013. Stakeholder feedback noted Redwoods’ CEO’s ability to articulate the importance for community involvement through partnership and saw that as a motivating factor for the increase in participation. Some stakeholders expressed desire for increased and more diverse partnerships across common values.

Community partners expressed extremely positive feedback about Redwoods’ involvement in their organization, both financially and physically (through donation of employee time). In April 2012, Redwoods was honored at The Triangle Business Journal’s “A Better World Awards” ceremony – a banquet that honors for-­‐profit organizations that encourage employee volunteerism in their communities. Redwoods requires each employee to complete 40 hours of community service during regular work hours, and includes it as part of an employee’s performance review. In 2012, Redwoods employees donated 2,766 hours (from down 3,414 hours in 2011, revised). This decrease is likely due to the decrease in the

- 11 -

number of employees. Notably, 68% of employees state they volunteer 3 or more hours per month, with 16% volunteering over 8 hours per month.

While much of Redwoods’ impact with community partners is through financial and human capital donations, Redwoods also provides free use of designated classrooms to stakeholders. In 2012, it donated 124 hours to 14 different organizations who used it for everything from strategic planning meetings to networking events. According to feedback, stakeholders noted it as a “fantastic” space where “everyone makes you feel welcome.”

During 2012, Redwoods also continued to develop Redwoods Managers, a sister company that evangelizes the Redwoods model and invests financial capital in other insurers to help them develop their insurance firms through the lens of Redwoods’ successful, impactful business practices.

Vendors

During 2012, Redwoods also created social impact through relationships with its vendor and supplier network. Vendor feedback was immensely positive, and vendors often referred to their work with Redwoods as a business partnership, rather than a client-­‐supplier relationship. Vendors see Redwoods as leading by example and note its forwardness in sharing its mission and practices, which make it “easy to follow along.” Specifically, in 2012, Redwoods hosted a networking event to support certified B Corps and educate others about the certification – and Redwoods invited many of its own vendors (among many others) to attend. Redwoods also worked with a long-­‐term supplier to help that supplier increase its employees’ engagement in community efforts, in addition to working with them to ensure no employees would be let go if Redwoods business were to decrease.

While vendors are overall in support of and interested in learning more about Redwoods’ status as a social enterprise, most say it does not make them any more or less likely to stay in the business relationship. What matters most to them is Redwoods’ trustworthiness – Redwoods “does what it says it is going to do” and treats vendors fairly. However, some vendors do indicate a desire to create deeper relationships with Redwoods, possibly through working together on a community project.

Below are survey comments that embody themes within all stakeholder feedback:

Do you draw a connection between Redwoods' Serve Others mission and your relationship with Redwoods?

• “Act in our best interest and on our behalf to implement the most responsible risk management procedures at our Y.” • “Our reps have always understood service before self.”

• “One of our firm's core values is Community Service -­‐ giving back to the communities in which we live and work. We value client's who have similar values.”

• “Yes, a very direct connection. Redwoods is very actively involved with our service to those in need in the community.”

• “I think it's great that Redwoods has the ‘Serve Others’ mission that they have, but it's not a significant factor in our choice to work with them.”

- 12 -

•

“I don't know the ‘Serve Others’ mission, but I experienced that type of service/help.”

My recommendation, concern or idea to strengthen Redwoods customer/supplier/community partner engagement is...

• “I am impressed with the level of commitment and buy-­‐in that Redwoods has in sharing outcomes with their ‘customers.’”

• “I would encourage Redwoods to softly encourage its business partners to give back to the community in ways that build stronger personal relationships with Redwoods team members and business partner team members.”

• “With cost containment concerns in all areas of operations, cost will always be a significant consideration.”

My most positive experience with The Redwoods Group in 2012 was...

• “The folks that follow up on claims are great to work with! Timely, kind, quick on responding.”

• “Redwoods staff came to our Y and held a session on risk management with our leadership team.”

• “When [employees] conducted our site visit in Knoxville.”

• “Quick response to Sandy.”

• “Always good service.”

• “[CEO’s] leadership and articulation of the company's social mission is strong and [CEO’s] leadership…not only shows his personal commitment, but his message is very compelling.”

• “Relationship with the HR department and working with the new CFO.” • “Redwoods' pro-­‐active risk management efforts, quick response when claims occur, and the overall integrity and mission of Redwoods and its leadership.”

• “Their visible, leadership role with Darkness to Light.”

• “It is always interactions with Redwoods staff.”

• “We had a significant aquatic experience in 2012, and the support from Redwoods was helpful and meaningful.”

Environment

In 2012, Redwoods continued to be committed to the environment as one aspect of its sustainable business practices, although governance, employees, and community are more central to its mission. It renewed its B Corp certification in 2012 and continued to source environmentally friendly office supplies and products. In April 2012, Redwoods moved into a new open-­‐environment office space that was built with an emphasis on sustainable materials. Redwoods will continue to improve its environmental practices in the coming year and is encouraged to seek other third-­‐party certified vendors and products to increase impact.

Nick Popio 4/1/13 4:20 PM Deleted:

- 13 -

Progress on Previous Social Audit Recommendations

Below are relevant recommendations from previous audits, progress made on those recommendations during 2012, and opportunities for Redwoods to increase impact moving forward.

Program Area Recommendation (Year) 2012 Progress 2013 Opportunities Governance

Employees

Community – Customers

Community -­‐ Partners

• Create a written diversity • To date, no written diversity policy and increase minority policy or external stakeholder representation (2008, 2009, board have been created 2010, 2011) • Redwoods de-­‐centralized strategy creation and • Create independent stakeholder board (2008, decision-­‐making across 2011) employee base • Establish clear goals for social • Redwoods began defining purpose statement in late mission (2008, 2011) 2012, as a foundation for

strategic objective and goal setting in 2013.

• Employees are aware of and • Increase awareness and participate in social education about social programs. programs (2007) • Employees were still required • Inspire employees, do not to participate in some require participation in new community programs, with initiatives (2007) mixed reactions • Focus internally and engage • Redwoods created a social employees; share strategy, enterprise committee and iterate social curriculum that it began entrepreneurship culture disseminating to employees (2009, 2010, 2011) • Employees were actively

engaged in strategy development process • Grew Redwoods Institute • Design a replicable model for • Shared social enterprise social programs that can be strategy with other used by other companies of companies and partners comparable size (2007) • Facilitated expansion of • Enhance and create Darkness to Light-­‐YMCA partnerships between partnership to additional community partners and state-­‐wide alliances Redwoods customers (2007) • Replicate/scale the Darkness • Continued working on expanding initiative across to Light model (2010, 2011) YMCAs and other partners • Work with customers to integrate Redwoods Institute • Dedicated two employees to Partnering in Prevention training into their programs initiative (2011) • Facilitated expansion of • Enhance and create Darkness to Light-­‐YMCA partnerships between partnership to additional community partners and state-­‐wide alliances Redwoods customers (2007)

- 14 -

• Examine benefits of creating a written diversity policy • Examine benefits of creating an independent stakeholder board • Build on 2012 reflection work to establish SMART goals for social mission, in order to ultimately focus resources and gauge impact.

• Further disseminate social enterprise curriculum among employees; deepen engagement with concept; and expand on importance in day-­‐to-­‐day work • Further employee’s understanding of social mission’s connection to the business • Create mechanism through which employees can share experiences and best practices • Work with customers to further integrate Redwoods Institute training into their programs • Continue to work with Darkness to Light and YMCAs to scale up training and advocate for program adoption • Further educate customers about Redwoods social enterprise status

• Continue to work with Darkness to Light and YMCAs to scale up training and advocate for program

• Replicate/scale the Darkness to Light model (2010, 2011)

• Continued working on expanding initiative across YMCAs and other partners

adoption • Further educate partners about Redwoods social enterprise status

Environment

• Investigate easy ways to continue to reduce environmental impact (2011)

• Continued current environmental practices • Continued expanding green products purchased from eco-­‐ friendly office supply vendor • Purchased eco-­‐containers for interior landscaping • Moved into new sustainable office space

• Investigate easy ways for the company to continue to reduce environmental impact • Consider vendor partnerships with other third-­‐party certified companies

Foundation and Charitable Giving

• Keep employees informed (about how the foundation operates and what decisions it makes) and directly engaged (2007, 2011) • Establish theory of change and specific impact areas for the foundation and charitable work (2007, 2011) • Set clear charitable objectives, and create tools and benchmarks to assess progress and measure impact, outcomes (2007, 2011)

• A strategic review was done • Create tools, metrics, and and a charitable giving and benchmarks to assess impact area focus (safety) was progress and measure impact decided on. and outcomes • No specific metrics have been • Continue to support and identified, other than dollars communicate the foundation’s donated and hours work to keep employees contributed engaged • Employees are more aware of • Seek additional ways to foundation, its purpose and engage employees in the grants foundation’s work • Employees still generally feel little involvement in foundation

Findings and Recommendations

As illustrated in the report above, Redwoods’ major 2012 social impact accomplishments were: • Strengthening structures and strategies to ensure Redwoods’ ability to continue to serve others, forever.

• Scaling social impact through 1) customer and community partnership programs (i.e.

Darkness to Light/Partnering in Prevention and the Redwoods Institute), and 2) a refocused Foundation that leverages all forms of capital to increase impact.

• Increasing engagement with and education about socially-­‐minded business across all of its stakeholders, including employees, customers, community partners, and vendors.

• Redwoods staff showcasing Redwoods’ commitment to ‘service before self’ through customer relationships and community partnerships.

However, as one employee put it: If Redwoods ever thinks it can’t perform better, “we'll have officially lost our edge.” There is always better work to be done, and Redwoods can continue to build its social impact in 2013. Of all the 2012 recommendations, the following are - 15 -

recommended key focus areas:

1. Continue to educate employees about Redwoods’ social enterprise status, its B Corp certification, and how its mission is relevant to their day-­‐to-­‐day responsibilities.

2. Increase employee engagement with and awareness of the Foundation’s newly refocused work that aims to scale impact through expanded use of capital sources.

3. Create a series of measurements and metrics to assess the outcomes of Redwoods’ social impact programs.

4. Create a mechanism for employees to share experiences and stories, as a means to educate, inspire, and build internal culture.

Conclusion

Throughout its history, Redwoods has consistently improved its social enterprise programs.

In 2012, Redwoods continued to add broad social value to all of its internal and external stakeholders. To further increase the impact of Redwoods’ social enterprise programs, the company should expand employee training, specifically focusing on teaching the best ways to integrate employees’ daily responsibilities with Redwoods social impact mission and metrics. It should also focus on increasing employee engagement with the newly refocused Foundation. However, due to its reflection work in 2012 and its restructuring of company governance, Redwoods is strongly poised to continue its excellent, impactful work during 2013. Moreover, its commitment, dedication, and leadership to generating positive social impact through its business casts it as a role model for other companies, both within the insurance industry as well as within its community at large. Is Redwoods a changemaker that is organized to “do good, forever?” It is beginning to look that way.

- 16 -

Appendix A: 2012 B Impact Report Details

- 17 -