B Lab, the force behind a new business sector designation—called the B Corporation—which recognizes companies that meet a set of social, environmental and institutional benchmarks for sustainability, is facing a Herculean effort. The work won’t be in convincing people that business can be a positive force for social change—there are already 240 companies in 28 states (representing more than 50 industries) that have become B Corps, and I’m sure that number will continue to grow. The bigger task will be in lobbying for legislation, on a state-by-state basis, to recognize and provide incentives to B Corporations.
And that effort got an important boost today: The Philadelphia City Council voted unanimously to pass a bill that creates a new sustainable business tax credit for certified sustainable businesses located in the City of Philadelphia. For tax years 2012 through 2017, 25 eligible businesses shall receive a tax credit of $4,000 to be used against the gross receipts portion of the business privilege tax. Companies can be classified as certified sustainable businesses once they are certified as B Corporations.
Not only does this bode well for B Lab’s efforts to gain governmental recognition for B Corps, it also makes Philadelphia (a city that is already making strides in sustainability) the first city in the country to adopt a financial incentive for sustainable businesses.
And while city laws are still a far cry from state-wide legislation, Philly’s support of B Corps is already generating some momentum among other city councils—specifically in Media and Yonkers, PA.—which are considering similar legislation.
Brian Taussig-Lux, general manager of Untours, a travel company based in Media and a founding B Corporation, is hopeful that his city council will succeed in introducing incentives for his and other B Corps there. Philadelphia’s passage of the bill represents a powerful precedent, he says. “Once one city does this, it’s a model. I can say, ‘look at what Philadelphia can do.’ It’s in black and white.”
He adds that tax incentives, and—eventually—recognition at the state level, would help Untours and similar companies do more good work. “We are paying taxes just like the guy down the street, whose business might even be having a negative impact on community. If we could get a chunk back from Uncle Sam, we could make a bigger difference.”
B Lab is also working with both business and legal working groups in the California legislature to introduce a bill early next year that, if passed, would give B Corps legal recognition and support in that state.