Mike Pearson created a business to solve a problem and do some good in the world. His Philadelphia home was once a major manufacturing hub, but over his lifetime Pearson has watched livable wage jobs evaporate across the region, to a disastrous affect, he says. Meanwhile, the widespread use of plastic packaging was harming the planet. The mission of Pearson’s Union Packaging — a company that makes Earth-friendly paperboard packaging for food companies around the world — was to fill both those voids.
But wanting to be a company that is good for the planet, his employees, and his customers was one thing. Knowing how to make it so in the midst of day-to-day business priorities and the financial strain of getting started was something else entirely.
“Sometimes there are social entrepreneurs and business owners who want to move in this direction but don’t know how to do it,” Pearson says. “What are the best practices? How do you measure this?”
Pearson isn’t alone in asking those questions. Recently, cities and states have been turning to B Lab, a global nonprofit based in Greater Philadelphia, to help answer those questions and give companies who want to show leadership on social or environmental issues a globally-recognized framework to measure and tout their progress.
Since its inception in 2006, B Lab has focused largely on “best in class” businesses: large corporations and forward-thinking companies fully committed to adopting sustainable practices and being role models for others. Ben & Jerry’s, Patagonia, Seventh Generation, and many other household names have earned “Certified B Corporation” status from B Lab, indicating a certain level of excellence as measured by the nonprofit’s B Impact Assessment, developed and re-developed over the years in dialogue with companies. There are now more than 2,500 certified B corporations around the world, including a handful of banks, as Next City has previously reported.
But until recently, B Lab had kept its focus on those “best in class” businesses, the ones that were interested in gaining certified B Corporation status. Through partnerships with cities and states, B Lab has been able to “broaden the aperture” of their work, says Flory Wilson, B Lab’s director of impact management, and increase their reach to more mainstream businesses, “who maybe aspire to be B Corporations or maybe don’t, but know that their impact matters and want to be more impactful.”
These are companies — like Union Packaging — that care and want to do better. In some cases, policy sets the bar for doing better: the landmark Clean Air Act of 1970 set comprehensive standards for emissions from industrial sources and vehicles; around the world, more than 164 countries have adopted some 1,200 pieces of legislation relevant to climate change (a 20-fold increase from 1997).
But both public and private sectors recognize that regulations can’t be the only way to drive progress on social and environmental goals. Regulations provide a standard, a floor for performance on what’s necessary to mitigate climate change or provide quality jobs; non-regulatory standards can provide guidance to those who want to stand out and show leadership on such issues. LEED standards, for instance, have become globally recognized in architecture and construction. B Lab’s B Impact Assessment provides one such globally-recognized standard that cuts across a wide range of social and environmental issues — the initial assessment covers 200 questions.
Union Packaging found out about the B Impact Assessment tool through Best for PHL, one of a number of partnerships between B Lab and place-based leaders or local governments to offer the assessment tool free of charge, as well as resources to improve and awards honoring performance and progress by local businesses.
Businesses that complete the assessment (which is tailored based on geography, sector, size, and other factors) receive a score in each impact area, which is also compared to other businesses like them. In this way, Wilson says, every business is able to find areas where they excel, “and even the best in class in all areas can still find areas in our standards where there’s room for improvement.”
A program of the nonprofit ImpactPHL, Best for PHL leverages partnerships with a number of local organizations with deep roots in the business and entrepreneurship communities: Ben Franklin Technology Partners, the Chamber of Commerce for Greater Philadelphia, Strategy Arts, and the Sustainable Business Network of Greater Pennsylvania.
Cory Donovan, program manager at ImpactPHL, says that the primary challenge in his city is “getting the business community to understand what we’re talking about. There’s so much different nomenclature: impact, triple-bottom-line, green… If you don’t live in this world already, some of that [language] is hard to parse through.”
A lot of data now supports that customers, employees, and investors care about this stuff, Donovan says, and there’s data showing that companies that are more mindful and intentional about impact can outperform companies that aren’t, and even de-risk their companies in some ways. “But we can’t expect people to be what they can’t see,” he says. “If they don’t know what the issues are, then they can’t make improvements.”
After completing the Best for PHL assessment, Pearson’s company identified a number of areas for improvement they had never considered. They have since gained a Sustainable Forestry Institute (SFI) certification, taken steps to ensure that their suppliers conform to similar standards, and have begun tracking more employee metrics to make sure the company understands and meets the needs of employees from a variety of socio-economic backgrounds.
“We believed we were impactful, but there is far more opportunity to improve and far better metrics to use in terms of measuring our social impact and our desire to be true to our core values,” Pearson says.
There’s been benefits to the traditional bottom line, too: meeting more rigorous standards and being more transparent has proven to be a “strategic separator in a company my size that competes against larger companies,” Pearson says. “Millenials are more conscientious consumers, and ultimately buy products from companies that are doing things like B Corp certification.”
Launched in 2016, New York City’s “Best for NYC” was the first campaign of its kind, created in direct partnership between B Lab and the city government.
Christine Curella, director of business initiatives and job quality at the NYC Mayor’s Office of Workforce Development, says that for New York City, the Best For NYC program is primarily an initiative to create good jobs in the city. Many businesses including B Corporations in the city had already demonstrated the power of business to drive change, creating good jobs in sectors with historically low wages, creating ownership and wealth-building opportunities in marginalized communities through worker cooperatives, and more, she says.
The Best For NYC program and partnership with B Lab allowed Curella’s office to put “the tools big businesses use to make decisions in the hands of small businesses that often don’t have access to that,” she says.
“These are small and medium businesses in all boroughs who may have never heard of social impact or [certified B corporations], but could really benefit from learning how their growth could be aligned with their values, good jobs, and inclusion,” she says.
Three quarters of the NYC businesses that have accessed the tool are minority or woman owned, according to the Mayor’s Office of Workforce Development.
Businesses have identified many pathways toward greater impact based on what they learn from the tool and what they value as a company. For Curella, this helps validate an incentive-based approach rather than just a regulatory one: the actions each business has taken – from introducing open book management to adopting paid bereavement leave, sometimes are “so specific, it would be hard to make city-wide policy,” she says.
After they take the assessment, NYC businesses are also able to plug into a number of other programs, such as Trusted Advisor, an employee financial wellness benefit from Neighborhood Trust Financial Partners, as well as workforce development programs and others to make progress in the impact areas businesses choose.
“We recognize that to progress in addressing these deep systemic social and environmental issues is going to take multiple levers: government and regulatory, philanthropic and nonprofit, and business,” says Wilson. “All these actors working together, using the different mechanisms at their disposal, is what will drive change.”
This article is part of The Bottom Line, a series exploring scalable solutions for problems related to affordability, inclusive economic growth and access to capital. Click here to subscribe to our monthly Bottom Line newsletter. The Bottom Line is made possible with support from Citi Community Development.
Sarah Trent is a freelance journalist based in Oakland. She covers social justice and equitable development in communities, business, food, and finance.