ImpactPHL Perspectives, Volume 5: Best for PHL: The City of Brotherly Love in Name and Deed
About ImpactPHL Perspectives:
If you are curious about pursuing financial returns while influencing the positive growth of Greater Philadelphia and the world at large, then welcome to the conversation. ImpactPHL Perspectives is a multi-part series which explores the many facets of the impact economy in Greater Philadelphia from the perspectives of its doers, movers, shakers, and agents of change. Each volume is written directly by a leader in this space, to discuss best practices and share lessons learned, while challenging our assumptions about the returns - financial and societal - on engagement in the impact economy. For more of ImpactPHL Perspectives, check out the ImpactPHL Blog.
By Liz Fernandes, B Lab
The Impact Economy and its Role in Shaping our Future Cities.
The growing movement of people who seek to use business as a force for good is one of the most important social and economic trends of our time. With 65% of the human population predicted to live in cities by 2050, nowhere is this trend more important to our future quality of life and standard of living than in cities. And Philadelphia is leading the way, with business leaders showing what it means to do business in the City of Brotherly Love.
For example, Wash Cycle Laundry hires returning citizens, uses environmentally friendly detergents, and delivers laundry on bicycles instead of vehicles to reduce their environmental footprint. The Graham Company is an insurance broker that became 100 percent employee-owned through an employee stock ownership plan in February 2017. Solar States is a solar installation and education company that recently won the ImpactPHL Award -- presented by the Chamber of Commerce of Greater Philadelphia -- for practices like hiring from traditionally underrepresented communities and co-founding the Philadelphia Solar Schools Initiative, which creates educational and workforce development partnerships, offers solar industry training, and provides career opportunities to people who are interested in joining the solar industry. And these are just a few inspiring examples of companies who have joined the recently launched program called Best For PHL.
"Millennials represent 50% of the global workforce and will inherit $40 trillion in the coming decades, they will shape labor and capital markets like no other generation."
These businesses, as well as the 200 other companies participating in Best for PHL, embody the growing trend of companies shifting from the 20th century economic model of shareholder capitalism to a 21st century economic model of stakeholder capitalism. Stakeholder capitalism -- also referred to as the “impact economy” -- is a new operating system of capitalism to create value not only for shareholders, but for society: for workers, communities, and the environment. With the rapid growth of cities and the energy around stakeholder capitalism, we see a meaningful opportunity to use the power of business to be a driving force for good in our future cities, especially in Philadelphia.
Philadelphia Leadership in Growing the Impact Economy
Best for PHL is a program that shows Philadelphia’s leadership in demonstrating how a city can intentionally expand the impact economy to include all businesses, not just leaders or innovators. Best for PHL invites all companies to take the Best for PHL Challenge -- a shortened version of the B Impact Assessment -- to get a quick baseline and comparison of their business performance on a few dozen key impact metrics, identifying areas of strength and areas for improvement. As part of the the Best for PHL Challenge, businesses are asked to pledge (at least one) Impact Improvement Goal and are provided with a resource toolkit to help them achieve that goal.
Best for PHL hosted workshops throughout 2017 to support businesses in taking the Best for PHL Challenge and to connect business owners with other like-minded people interested in measuring their impact and making improvements to become better for their workers, their communities, and their city. Eliza Michiels, a realtor from Real Estate with Heart, attended one such workshop and said that not only did the assessment help bring to light practices she had never considered, like an open book financial policy, but also that there was “power in committing the time and getting together with other folks” who shared her values and desire to use business as a force for good. Best for PHL will continue to host workshops in 2018 and bolster their programming with events focused on best practices and tactically supporting companies to improve.
Beyond helping businesses redefine success, Best for PHL has demonstrated the power of cross sector leadership. Best for PHL is spearheaded by ImpactPHL, and supported by nonprofits, impact investors, businesses, and foundations such as the Chamber of Commerce of Greater Philadelphia, Ben Franklin Technology Partners, the Sustainable Business Network of Greater Philadelphia, Halloran Philanthropies, Strategy Arts, and Sustrana. It is just the beginning of the forward progress that can be created when businesses, nonprofits, investors, and policy makers work together to create an impact economy in their city, and it is paving the way for other cities to do the same.
Best for PHL was the third Best for Cities program to launch nationally, joining the ranks of Best for NYC and Best for Colorado. Best for Rhode Island launched shortly after Best for PHL, and programs have begun internationally in Rio de Janeiro (Brasil), Cascais (Portugal) and Geneva (Switzerland). Best for Cities programs share a common goal to equip all businesses - regardless of their size or industry, or level of experience with impact business practices - with a free and confidential assessment of their impact. Their common belief is that if all businesses compete to be best for the world, not just best in the world, then society will enjoy an equitable, durable prosperity.
Looking to the Future
To date, Best for PHL has engaged over 200 businesses, with over 120 companies pledging to improve on at least one business practice over the course of the year, totaling over 300 pledged impact improvements. Improvement pledges range across job quality metrics, supply chain sustainability, civic engagement and giving, minimizing environmental footprint, and governance issues of transparency. Representation from the business community is diverse, with participants from over 20 industries, over 25% of participants with ownership from historically underrepresented populations in business,10% of participants employing over 250 workers each.
"To date, Best for PHL has engaged over 200 businesses...totaling over 300 pledged impact improvements."
From On the Goga beginning to source all of their materials and marketing partnerships exclusively from local vendors, to Pennfleet Corp installing waste oil heaters in their plant to reduce natural gas usage, to Philly Bread promoting financial transparency with their management, each change made by a Best for PHL businesses starts a ripple of impact. When businesses join Best for PHL, they take action to being better business citizens, and see the benefits for their own business.
Over the past several decades, investors, economists, and business owners alike have acknowledged the need to move from shareholder capitalism to stakeholder capitalism. There are tens of millions of consumers, investors, and workers who want to align their purchases, investments, and employment decisions with their values. And this trend will accelerate. Research shows that Millennials seek meaningful work and investments that make money and make a difference, and since Millennials represent 50% of the global workforce and will inherit $40 trillion in the coming decades, they will shape labor and capital markets like no other generation in human history. The existence of this trend raises important questions: How do we make sure that this trend is more than a fad? How do we make this culture shift to building an impact economy meaningful and lasting? How do we help businesses and investors who want to capitalize on this trend take their first step, or accelerate their efforts?
If the first rule of business is that we manage what we measure, then we ought to help all companies measure what matters - the positive impact they have on their workforce, their suppliers, their customers, the communities in which they do business, and the environment on which we all depend. In short, we can’t create an impact economy if we don’t measure and manage impact with as much rigor as financials.
If you’re a business in the Greater Philadelphia Region, we invite you to use your business as a force for good. See how you can get involved at www.bestforphl.com. Will you join us?
Liz Fernandes is an Impact Improvement Senior Associate at B Lab. She develops and supports improvement programs that drive equitable, inclusive progress and behavior change through business. Liz works with supply chain managers, business associations, mutli-national corporations, and governments to implement programs that empower businesses to manage and measure their positive impact. Prior to working for B Lab, Liz worked worked at PricewaterhouseCoopers, where she conducted research on global megatrends and analyzed how trends could affect education-focused nonprofits in the Bay Area.