BUSINESS NEWS FROM THE FOUR-COUNTY REGION
SEPTEMBER 10, 2010
Benefit corporations aim to promote sustainability
by Christina Williams
Sustainable Business Oregon EDITOR
A nonprofit organization in Pennsylvania is working to spread acceptance of
a new type of business corporation that
emphasizes triple-bottom-line principles
and good corporate citizenship: the benefit corporation, or B
corp. for short.
But while the B
corp.’s
founding
principles were influenced in part by some
Oregon sustainable
business pioneers —
clothing
company
Nau Inc. and invest- Chen
ment firm Upstream
21 — the certification hasn’t found a legal
foothold inside Oregon.
“Our slogan is that we’ve never had an
original thought,” said Jay Coen Gilbert,
one of the founders of B Lab, the nonprofit behind the B corp. movement. “These
were two of the innovators we looked to
for cutting-edge corporate governance
work.”
What B corp. strives to do is formalize the
requirements a company should follow
to become a certified benefit corporation.
Blended in with the legal requirements for
standard business incorporation — such as
S corps., C corps. and LLCs — are other
requirements such as high standards for
fair employment practices, benefits to consumers and benefits to the environment.
There are 327 companies that self-identify as B corps. nationwide, including 19
in Oregon. In order to spread the gospel
of the benefit corporation even further, B
Labs is working on the policy front on a
state-by-state basis.
This spring, both Maryland and Vermont
passed legislation to legally recognize
B corporations alongside other types of
business organizations.
Coen Gilbert said there’s no legislation in
the works in Oregon to do something similar, but B Labs is working through other
channels. This summer, the team met with
staff from Portland Mayor Sam Adams’
office to discuss the possibility of setting
up a tax incentive structure for certified
B corps. The city could also implement a
preference for B corps. into its procurement practices.
“Folks have wanted to create a sustainable business procurement program, but
the problem was always been: Who qualifies?” Coen Gilbert said. “The B corp.
gives a credible third party to rely on.”
Late last year, Philadelphia became the
first city in the country to formally approve tax breaks for B corps.
But the B corp. is not the only path to sustainable business.
In 2007, Oregon Gov. Ted Kulongoski
signed House Bill 2826 into law, officially
allowing a company’s articles of incorporation to include a provision “authorizing
or directing the corporation to conduct the
business of the corporation in a manner
that is environmentally and socially responsible.”
“That moved the ball forward for Oregon,” said Jeff Wolfstone, a shareholder
with law firm Lane Powell. “Oregon has a
strong entrepreneurial spirit and has quite
a focus on things sustainable. It’s an important place for things like B corps. to
develop, whether they are actually labeled
B corp. or not.”
Regardless of whether Oregon joins other
states and gets official with its B corp. recognition, at least one Oregon company has
its eye on the process.
Portland-based Equilibrium Capital, a
registered B corp., has two slots on the
B Labs advisory team. Kipp Baratoff, an
Equilibrium partner, sits on the group’s financial services industry working group.
Dave Chen, Equilibrium’s founder and
managing director, serves on its board of
directors
Reprinted for web use with permission from the Portland Business Journal. ©2010, all rights reserved. Reprinted by Scoop ReprintSource 1-800-767-3263.
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Benefit corporations aim to promote sustainability