Benefit Corporations = Sustainable Economy

In 2015, we witnessed what is possible when large groups of people come together to change the world. But with the adoption of both the Sustainable Development Goals (SDGs) and the Paris Agreement, we have a lot of promises to keep and work to get done.

A sustainable economy is within our reach, but it will take the cooperation of multiple stakeholders, the investment of billions of funds, and the dedication of the entire world.

Lobbyists, activists, scientists, and politicians have already — quite successfully — mapped out some of the important policies that need to be adopted by governing bodies around the world in order to propel us into a sustainable economy by 2030.

Many of these policies relate to agriculture, deforestation, water, research and development, technology, renewable energy, and transportation. And they all have the capacity to create synergies that would — no doubt — encourage the private sector to invent, create, produce, and sell goods and services for a more sustainable future.

Any policy that can boost cooperation, facilitate multi-channel communications, incentivize information-sharing, strengthen scalable impact, create new sustainable capital, mitigate environmental degradation, motivate early adoption, and provide long-term solutions are policies worth lobbying for.

Today, I’m lobbying for a policy that can do all of those things.

I strongly believe that governments should adopt policies that provide companies with the ability to register as purpose-driven corporations. Purpose-driven corporations are different from traditional for-profit companies and nonprofit organizations because they operate with a triple bottom line, equally valuing profits, people, and the planet.

Legislative terminology refers to them as Benefit Corporations.

Benefit Corporations, Sustainable Economy

Benefit Corporations are for-profit entities that seek to create social and environmental benefits in addition to the traditional aim of generating profit. Only two countries in the world, Italy and the U.S., have adopted legislation that enables businesses to register as Benefit Corporations.

This policy gives for-profit businesses the opportunity to define themselves as for-purpose companies within their articles of incorporation, protecting directors who may make business decisions based on societal or environmental needs that run against traditional short-term, profit-generating norms.

If governments around the world want to encourage public-private partnerships that help us transition toward a sustainable economy, then they must also create new guidelines and frameworks that clearly enable companies to operate via a triple bottom line.

To be candid, I’m not trying to suggest that this lack of policy has stopped the world from embracing purpose-driven business.

But the void certainly hasn’t helped.

In my home country, the Canadian Bar Association is putting pressure on our government to act quickly. And B Lab, a nonprofit which serves a global movement of people using business as a force for good, also believes that Benefit Corporation policies could change our economy for the better.

Both groups argue that the introduction of such a policy would increase business transparency, protect for-purpose companies’ missions, provide more freedom to entrepreneurs, attract further investment, and create economic development, all at no additional cost to the government.

Beyond this, experts also indicate that this policy shift would protect purpose-driven companies during capital injections, through leadership changes and help prepare businesses post-IPO.

Our next move is clear.

Benefit Corporation legislation has the potential to be our best next step forward on our journey toward a new sustainable economy.

Written by: Melissa Schweyer

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