Institutionalizing the For Benefit Corporation
Creating new business models that integrate people, planet and profit is a creative challenge. State and federal laws differentiate between for-profit and nonprofit entities, but what about the mission-driven, for-profit corporation? Or the risk-taking nonprofit social enterprise? Neither fish nor foul, progressive corporations can create significant social value, but often without the tax breaks or fundraising benefits that accrue to nonprofit entities. Truly for-benefit institutions also struggle to differentiate themselves in the marketplace. For every real innovator, there are a plethora of opportunistic “greenwashing” companies papering over their business-as-usual practices with clever marketing campaigns.
Enter the B CorporationTM, “setting the new corporate standard for social and environmental performance.”The vision of “B Corp.” is to institutionalize and scale the for-benefit corporation. The goal is to take responsible businesses to the next level of organization and performance through three strategies: 1) Meeting comprehensive and transparent social and environmental performance standards, 2) Institutionalizing stakeholder interests, and 3) Building collective voice through the power of a unifying brand.
At Trillium Asset Management Corporation (“Trillium”), we decided to take the plunge and become a B Corp. The first step was filling out a detailed survey on our approach to products, practices and profits. Given our longstanding mission-driven business model, we figured we’d ace this test. And in fact, we did score well enough to easily qualify as a B Corp. But like the large corporations we engage with to increase transparency, the process of filling out the survey was instructive. It shined a light on areas in which we can improve our practices ranging from involvement in local communities, efforts to reach out to underserved populations and supplier diversity.
We have also committed over the next year to review our company’s bylaws. B Corps “redefine the best interests of the corporation to include the consideration of employees, consumers, the community and the environment.” This shouldn’t be much of a stretch for us. Our longstanding mission statement, on the back of every employee business card, explicitly embraces multiple bottom lines and broad stakeholder constituencies. These include clients, concerned investors, employees, and other persons and organizations working to build a just society and a better world.
B Corps’ third initiative is to build a powerful brand image similar to trusted labels such as Fair Trade CertifiedTM and Energy Star. B Corp is using member licensing fees to pursue co-branding, media/web relations and marketing partnerships. Branding may have more impact for consumer products B Corps like BetterWorld Books or King Arthur Flour than for professional services companies like Trillium. And in fact many of the better-known founding B Corps are progressive consumer brands such as Numi Tea, Indigenous Designs, Dansko and method.
We at Trillium are pleased to join the expanding community of responsible companies at B Corp. We look forward to the day when for-benefit corporations are codified in state and federal law as strongly supported business models. And we encourage large, publicly traded companies to become B Corps as the next step toward institutionalizing greenwash-free, mainstream, responsible business.