As a part of B Lab's overarching mission to support entrepreneurs that are using the power of business to solve social and environmental problems, B Lab supports legislation to develop a new corporate form called a Benefit Corporation.
Benefit corporations are a completely voluntary alternative corporate form that allows entrepreneurs to adhere to higher standards of corporate purpose, accountability and transparency. Benefit corporations create a material positive impact on society and the environment, expand fiduciary duty to require consideration of non-financial interests when making decisions, and reports on its overall social and environmental performance using recognized third party standards. To learn more about Benefit Corporations, click here.
Why Benefit Corporation Legislation Benefits Investors?
- Clarity: Investors in a Benefit Corporation know that the fiduciary duty of these businesses includes creating public benefit;
- Transparency: The corporate statute requires higher standards of transparency, requiring annual reporting to shareholders and the public about the corporation’s social and environmental performance. A benefit corporation must produce an Annual Benefit Report. Just as financial reports are based on the third party created GAAP accounting principles, benefit corporations use freely chosen third party standards to ensure independence, comprehensiveness, credibility and transparency in their reporting. The Benefit Report provides quality information to shareholders and potential investors regarding the company’s mission that they do not have in a traditional corporation; and
- Predicatability: In order for a company to remove the higher standards of corporate purpose, accountability, and transparency associated with being a Benefit Corporation a 2/3 majority vote of shareholders is required. Therefore when you invest in a Benefit Corporation - you know that the company and the positive social and environmental impact that they create are built to last beyond marketing trends, good times, or existing corporate leadership.
What You Can Do To Support Passage of the Benefit Corporation Legislation?
Interested in Learning About Other Policy Initiatives for Investors that Support High Impact Entrepreneurs?
Visit the Impact Investing Policy Collaborative (IIPC). IIPC strives to grow impact investing markets by building a global network for policy research and innovation. The IIPC helps investors, public officials, advocates, researchers and related communities better identify and support policies that lead to more robust and effective capital markets with intentional social and environmental benefits.