Posts Tagged ‘Benefit Corporation’

Updates: Aqua America, Benefit Corporations, Philly Sports Teams

June 27, 2011

I was thinking about some posts I wrote last year, and what has happened since then. The posts I had in mind concerned Aqua America, the B Corporation, and the Philadelphia Eagles (one of the Philadelphia area professional sports clubs). I was curious what was happening with sustainability at Aqua, the progress of B Corporations around the country and what other Philly sports teams have been doing on the green front since last year.

Aqua America (my water company)

I got my quarterly shareholder report letter from Aqua America last week. In it, aside from the usual reports of growth, capital programs, etc, is a notation that the 2010 sustainability report had been released at the annual shareholders meeting last month. Not a big deal, just something that the company does. The entire report is available from the www.aquaamerica.com website, via a big button on the front page. This is like the Sherlock Holmes story in which the dog did not back. Sustainability seems to be woven into the fabric of the company.

As some perspective, in 2009 management opposed a sustainability proposal to stockbrokers; in 2010 the company released its first such report with a fair amount of hoopla. In 2011, the sustainability efforts are still there. The tone is different, more business-like. Which probably means that these efforts will continue as long as Aqua’s capital program does.

B Corporation(s)

I noticed that 2 more states have approved “benefit corporations”. New Jersey and Virginia have joined Maryland and Vermont in approving these “alternative” corporate structures. By law, the main corporate purpose for most companies is making money. I am all for making money, especially when the check has my name on it. However, there is an increasing movement in this country of people who want to combine business purposes and broader public benefits.

These laws in general allow companies to declare a public purpose, i.e. to save the environment. So if a company is delivering public benefits in that regard, it cannot be sued for activities in support of that goal.

Philadelphia Sports Teams

Last fall, the Philadelphia Eagles (NFL) announced a pioneering initiative to make their stadium one of the first in the country to be powered by solar, wind, and dual-fuel energy. Six months later, another Philly sports team (baseball’s Phillies) received national recognition for its greening efforts—a 2011 Green Power Leadership Award from the Environmental Protection Agency (EPA).

This is in recognition of an array of programs the Phillies have implemented in the last few years. A few years ago, for example, the team agreed to purchase 100% renewable power, and they have done this ever since. This year, they put in place an organic composting system at Citizens Bank Park. The idea is divert compostable material from the landfills. They also hosted an e-cycle event during last weekend’s series with the Oakland A’s where could come and drop off a large variety of electronics for recycling such as copiers, scanners, and much more. These are only a small sample of their greening program.

It felt really good to see that the original sustainability efforts I wrote about last year in those posts were not one-shot wonders. Rather, they have become part of an ever-increasing array of initiatives embedded into how the business of these organizations is being done.

Previous Posts:

Aqua America

http://https://sustainablewritings.wordpress.com/2010/06/29/aqua-america-releases-sustainability-report/

Benefit Corporations

http://http:/sustainablewritings.wordpress.com/2010/04/26/for-the-benefit-of/

Philadelphia Eagles Renewable Power:

http://https://sustainablewritings.wordpress.com/2010/11/22/fly-eagles-fly/

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For the Benefit Of….

April 26, 2010

Companies (more specifically corporations) are often set up for the benefit of the shareholders. This is usually defined in a legal sense of maximizing profit for the shareholders of the said company. The state of Maryland has passed legislation allowing for the creation of a new type of corporation—the Benefit Corporation. As of October 1, 2010 (when the law takes effect), these types corporations are also specifically empowered to declare that one of its “corporate purposes” is the creation of a specific public benefit.

These corporations can be explicitly for profit (ie, they have shareholders looking for a return) and provide a public benefit at the same time. Examples of “specific public benefits” included in the legislation are: preserving the environment, promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business, or the accomplishment of any other particular benefit for society and the environment.

Further, directors of these corporations shall consider the effects of their actions upon the stockholders, employees, interests of customers, and community/society as a whole. This provides legal protection from lawsuits claiming that these considerations have a negative impact upon shareholder value. Since a given company’s management acts as the agent of the directors, they must consider stockholder, employees, customers, etc in their decision making also.

An additional aspect of these corporations is a degree of transparency. Within 120 days after the close of the company’s fiscal year, a Benefit Corporation must produce an annual benefit report. This report includes the (public) benefits the company aimed to provide (as stated in its charter), how it did so, and what hindered its ability to provide this benefit. This report will need to be audited by an independent entity.

This law was non-controversial. The law passed the Maryland House by a vote of 135-5, and the Maryland Senate unanimously. Similar legislation has passed the Vermont Senate, and is pending in California. Several other states, including Pennsylvania and North Carolina, will most likely consider the issue next year.

This legislation springs from the work of the B Corporation, a Philadelphia area non-profit that created a system for measuring the social responsibility efforts of companies across the country. The idea has been to include social responsibility as part of the fabric of a business. With the passage of this law in Maryland (and potentially several other states), social responsibility can be part of a company’s reason for existence in the first place.

The legislation as signed by Gov. O’Malley is here:
http://mlis.state.md.us/2010rs/chapters_noln/Ch_98_hb1009T.pdf

Learn more about B Corporations here:
http://www.bcorporation.net/


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