A Revolution In Corporate Priorities
“Making profits is what business is all about isn’t it? Well perhaps not… [A] new law… protects companies who put social responsibility before making money. It allows them to become ‘Benefit Corporations’ which means that shareholders can’t complain if the company takes decisions to, for example, protect the environment or buy locally, even if that hurts the bottom line.” -BBC
Benefit Corporations (or, B Corps) provide businesses with the opportunity to make decisions based on what is best for the community and the environment, not just what is in the best interest of their bottom line.
One prime example of why this law is necessary is the sad case of Ben & Jerry’s Ice Cream. As many folks know, Ben & Jerry’s began in Vermont as an independent, socially-responsible and politically-active company. They donated 7.5% of their annual profits to community charitable projects and used hormone-free milk. Then, as they grew, they went public and found great success. Eventually, huge offers to buy the company came rolling in. Despite the fact that the original owners intended to continue their social mission and had no interest in selling the company, the law essentially required them to accept Unilever’s grandiose offer. If they didn’t, shareholders could sue, and Ben & Jerry would be held culpable for lost potential profits, for “irresponsible” business practices.
Now, the arrangement with Unilever has for the most part kept B&J’s social mission intact — excepting some key ingredients — but the principle remains that their admirable moral principles were compromised by the demands of capitalism. Thankfully, this case seems to have accelerated efforts to protect similar ‘for-benefit’ businesses.
The B Corps laws essentially subsidize environmentally and socially responsible businesses, by both lending the legitimacy of official certification, and protecting them from liability to shareholders. In fact, the term they’ve adopted is “stakeholders,” which carries the suggestion that we all have a vested interest in seeing certain companies succeed, whether we own their stock or simply share the same planet. And how fantastic is that? Instead of business leaders having to agonize over a choice between profits and responsibility, they can now stay focused on the highest good. As it turns out, doing the right thing for the right reason has the tendency to generate great profit on a number of levels!
B Corps have laid out this Statement of Interdependence:
We envision a new sector of the economy which harnesses the power of private enterprise to create public benefit.
This sector is comprised of a new type of corporation — the B Corporation — which is purpose-driven and creates benefit for all stakeholders, not just shareholders.
As members of this emerging sector and as entrepreneurs and investors in B Corporations, We hold these truths to be self-evident:
– That we must be the change we seek in the world.
– That all business ought to be conducted as if people and place mattered.
– That, through their products, practices, and profits, businesses should aspire to do no harm and benefit all.
– To do so requires that we act with the understanding that we are each dependent upon another
and thus responsible for each other and future generations.
The first Benefit Corporation laws were passed in Maryland and Vermont in April and May of 2010, respectively. As of January 13th, 2011, Sen. Bob Bacon and Rep. Tom Massey have sponsored the bill in the State of Colorado. They are supported by the Alliance for Sustainable Colorado and the American Sustainable Business Council.
There are already 11 Colorado-based companies enrolled in the B Corps program, including GreenEventCo, GoLite, Namasté Solar, The Paradigm Project and The World Leadership School. So far there are 365 B Corps throughout the United States. California leads the way with 111 companies, and Pennsylvania comes in a distant second with 52. There are 15 in Canada and 1 so far in the European Union. Check out the B Corps community website for more info on certified businesses in your area. Let’s support these efforts to bring popular business practices into harmonious alignment with natural law!
It is great to see the establishment of human laws that support the creation of an enlightened society. B Corps are building a bridge from our profit-at-all-costs culture to one where symbiotic cooperation reigns over cut-throat competition. Heed the clarion call: for verdant abundance and prosperity for all!
David Telfer McConaghay was born on planet Earth. Since that fateful first day of Spring in ’86, he has wandered across its surface in search of something which, when found, kindly insists that he continue searching. His immediate family lives in Minneapolis, MN, though he also feels at home in Washington D.C.; Grass Valley, CA; Bogotá, Colombia; and now, almost Denver, CO. He completed his B.A. in English & Creative Writing at The George Washington University in 2008. The Sivananda Ashram Yoga Farm (Vrindavan of the West) is the primary source of any yogic inspiration David aka Sri Nivasa may express. He plays on Facebook HERE.