In Search of the Benefit Corporation; The Journey Begins at #SoCap10
There are a number of long-standing enterprise forms in Ontario (and Canada) with a mission to achieve positive social or environmental impact, including co-operatives and non-profit organizations. You may be familiar with producer, housing, or worker co-operatives, from Organic Meadow to the Urbane Cyclist in Toronto. You may also be familiar with non-profit (charitable) social enterprises, from Goodwill Industries to Habitat for Humanity Restore.
Can a for-profit company solve social and environmental problems? If these good companies can exist, can they be economically viable (even profitable) while meeting their mission? This is the premise of the benefit corporation, an emergent form of sustainable for-profit enterprise with a defined mission to generate demonstrable, positive social and/or environmental impact.
It is an idea with great potential. We want to find out how they work and whether the concept is scalable here. So, over the next few months, I am on a journey in search of the benefit corporation.
What is a benefit corporation?
B Corporations are, “…unlike traditional responsible businesses because they: meet comprehensive and transparent social and environmental performance standards, institutionalize stakeholder interests, and build collective voice through the power of a unifying brand.” B Corporations are accredited by the U.S. non-profit organization B Lab, based in Philadelphia, Pennsylvania. Their standards are quickly developing into the North American standard for social and environmental performance measurement, providing the most well rounded evaluation and representation of businesses having a positive impact.
There are already 315 B Corps globally, representing roughly $1.5 billion in annual revenue. The vast majority are based in the United States, but there are a few located in Canada, including Fifth Town Artisan Cheese and Renewal2.
Governments are taking note of the potential of benefit corporations. It has been approved as a new corporate form in legislation in Maryland and Vermont. There are a number of other states pursuing legislation, including New York, Pennsylvania, North Carolina, Washington, Colorado, and Oregon. It is also being advanced as a legislative option by organizations in BC and Ontario.
Why does this exercise matter?
As an entrepreneur, the benefit corporation concept may provide you with an edge in the marketplace to access new capital or market your enterprise to a growing group of conscious consumers. It could also provide you with a means to improve your ability to generate a positive impact at a local or global level, and connect you to a vibrant community of entrepreneurs.
As an impact or mission-aligned investor, it may help you learn how to identify companies that have proven, positive impact. As a policy maker, this exercise may you provide further context on a legislative option that could simultaneously advance social, economic, and environmental policy objectives.
Fundamentally, for all Ontarians and Canadians, it is hoped that benefit corporations can act as another pillar of a just economy including social enterprises and co-operatives.
How will we search for the benefit corporation?
Over the next few months, I will travel by plane, car, train, and on foot:
- Visiting benefit corporations in the United States and Canada to understand their business operations;
- Identifying and meeting with enterprises in Ontario that are potential benefit corporations;
- Learning about benefit corporation legislation in the US to advance understanding on legislative options in Ontario and across the country.
Let me know if you have any questions for folks on the tour. I’ll be blogging along the way. I hope that you will join me on this journey.
Note: This post originally appeared on the Social Venture Exchange blog.