A New Kind Of Corporation 

 

Thousands of visionary business leaders are building the foundation for the kind of systemic change that can create a new economy with millions of new high quality jobs and improve the quality of life in communities across our country.  To serve them, B Lab and the community of Certified B Corporations have worked to introduce and support legislation around the country to create a new corporate form called the benefit corporation.

 

According to a White Paper from a group of corporate attorneys, a benefit corporation is the corporate structure that best meets the needs of the growing number of entrepreneurs and investors who seek to use business as a tool to solve social and environmental problems (more detailed info on benefit corporation legislation, including state-by-state status, is available at benefitcorp.net.)

Benefit Corp vs. Certified B Corp

 

Benefit corporations and Certified B Corporations are often, and understandably, confused. Both are sometimes called B Corps. They share much in common and have a few important differences. Certified B Corporation is a certification conferred by the nonprofit B Lab. Benefit corporation is a legal status administered by the state. Benefit corporations do NOT need to be certified. Certified B Corporations have been certified as having met a high standard of overall social and environmental performance, and as a result have access to a portfolio of services and support from B Lab that benefit corporations do not.

Benefit corporations are exactly the same as traditional corporations except for three little things that make them game-changers.


Benefit Corporations are required to:

1) Purpose: have a corporate purpose to create a material positive impact on society and the environment;
2) Accountability: expand fiduciary duty to require consideration of the interests of workers, community and the environment; and
3) Transparency: publicly report annually on overall social and environmental performance against a comprehensive, credible, independent, and transparent third party standard.

 

Benefit corporation laws have been enacted in seven states and bills are moving forward in seven others. For details, check out http://www.benefitcorp.net/state-by-state-legislative-status.

 

Legislation has enjoyed overwhelming bi-partisan support in every state. In part, that's because the legislation is 100% voluntary and costs the states nothing. But mostly, that's because businesses have come out in full force to support the legislation. In California for example, thanks to the efforts of B Lab's national policy partner the American Sustainable Business Council, in addition to marquee supporters like Certified B Corps Patagonia, Method, and RSF Social Finance, legislation was supported by approximately 250 individual businesses and a dozen business associations representing more than 10,000 member companies.  If you're interested, sign ASBC's businesses for benefit corps petition so legislators in your state know where you stand.

 

Benefit corp legislation not only gives businesses the freedom and legal protection to pursue the triple bottom line, but it gives individual citizens something positive for which to advocate. Thanks to the efforts of Certified B Corp Care2.com, nearly 20,000 citizens have written letters of support to their elected officials for benefit corp legislation.  Join them by signing the Care2.com citizens for benefit corps petition.

 

The community of Certified B Corporations has become a powerful constituency for change.

 

 

Please visit benefitcorp.net to find resources for businesses and attorneys interested in learning more about benefit corporations or to support future legislative efforts.