But there’s a twist. To attract A players—work hard, play hard employees just like Graham—Alpine Investors decided to become a certified B Corp. Alpine embraces B Corp’s philosophy to be “a leader in the global movement for an inclusive, equitable, and regenerative economy,” while also pursuing “alpha” financial returns. It publishes a “Force for Good” report each year. And it has a particular focus on workforce diversity, equity, and inclusion.

When I saw that, what I wanted to know was how. How does Alpine Investors both pursue maximal financial returns and prioritize DEI? How does the firm attract and retain a diverse array of A players—not just the stereotypical Patagonia-wearing white male finance bros that still dominate the finance world—to unlock business success?

Years ago, Weaver had an epiphany. At the time, he told me, he had a bit of a hero complex. He considered many of his portfolio company CEOs B players, and often felt the need to step into management himself. But as he discussed that perspective with his executive coach, “this big lightbulb went off,” he said. “I realized I’m first and foremost in the talent business. That’s the true business I’m in. Talent first. I got to focus on that.” Cue his focus on A players, no matter their background.

The cornerstone in this new approach was setting up a CEO in Training (CIT) program to train talented business school graduates to become CEOs of Alpine’s portfolio companies. It opened the door to a much more diverse pool of talent who “didn’t have a path” to the corner office, Weaver said. And it proved to be key to improving the company’s overall performance when candidates from top business schools like Stanford and Harvard started streaming in.

Today, roughly half of the CIT program trainees are women, and a third are from underrepresented minorities. Yet Kary Jablonski, one of the CEOs to come out of the Alpine program, told me DEI was not the explicit goal, but rather a natural outcome of Alpine’s recruitment approach. Alpine recruiters focus on “attributes over experience,” she told me, resulting in getting “more qualified candidates in the funnel.” And those candidates were of all types of backgrounds and identities.

By focusing on the top talent in its portfolio companies, Alpine also ensures that diversity trickles down. Jablonski told me she uses this approach at Trucker Tools, the company she runs. “We opened the funnel to as diverse candidates as possible, and put them in the seat,” she said. “The result is a majority female management team and thriving business” in a male-dominated industry.

In the performance-oriented culture of Alpine, the focus on A talent benefits not just the company, but its people. Because Alpine seeks to retain its A talent, employee satisfaction is another key metric for the company. It seeks to provide what its talent says it needs to be happy and motivated—in the form of things like attractive compensation packages and professional coaching and support—and prides itself on having a high retention rate and net promoter score.

“The worst thing is if an A player walks in and hands you his resignation,” Weaver said. “The day that happens, you’ve already lost.”

I’m all for companies combining purpose and performance, all the more so if it also achieves diversity, equity, and inclusion. But talking with Weaver and Jablonski made me realize that it still takes a particular type to work in private equity. For all its B Corp credentials, Alpine strikes me as a place where people are “always on,” working long hours if needed, and where financial returns are holy, even if people metrics are a crucial part of the mix.

It’s not my kind of B Corp, but I guess that’s OK. For B Corp to go mainstream, it needs to become the business equivalent of a big tent. It’s good then, that companies like Alpine find their place under it.

Peter Vanham
Executive Editor, Fortune
peter.vanham@fortune.com

This edition of Impact Report was edited by Holly Ojalvo.

ON OUR RADAR

On the Israel-Hamas war, Elon Musk’s X is having all the wrong impact (Fortune)

Many companies are struggling to get their response to the Hamas attacks on Israel, and the ensuing conflict, right. In our view, one company that has not succeeded is X.

After the platform was flooded with disturbing content related to Israel after the terrorist attacks, the EU took notice, warning about potentially illegal material and demanding immediate actions be taken for compliance. (The EU warned Meta, too, to curb disinformation.) In response, CEO Linda Yaccarino announced that her team was "working around the clock to address this rapidly evolving situation."

This isn't the first time Elon Musk’s X has been criticized for having harmful social impact. Many content moderators were fired when Musk took over, and the platform is currently operating without a trust and safety lead—a recipe for disaster. 

"Green asset ratio" set to kick in for European banks, despite industry pushback (Financial Review)

“Europe’s banks need to stop complaining that a new ESG rule will make them ‘look bad’ and accept that they will need to start reporting additional data in a few months, European Banking Authority Chairman Jose Manuel Campa said this week,” according to the Australian Financial Review. “The metric in question is the green asset ratio, with mandatory disclosure set to kick in from January. Supported by the European Central Bank and lambasted by the finance industry, the ratio reflects the share of a bank’s balance sheet that aligns with the EU’s list of sustainable business activities.”

My take is inspired by IKEA CEO Jesper Brodin, whom I met this week: It's better to embrace green rules than to fight them. Brodin has that view on mandatory Scope 3 carbon emission disclosures, which are also set to kick in soon. The same logic equally applies to the green asset ratio.