| Dear Sustainability Watch Reader,
I am pleased to provide you with your weekly Sustainability Watch newsletter. This week's topic is "B Corporations."
|
|
B Corporations
B Corporations and B Lab have worked to proliferate legislation that legally recognizes a new type of corporation - a Benefit Corporation. California, Hawaii, Maryland, Louisiana, New Jersey, New York, Vermont and Virginia have passed legislation that legally recognizes Benefit Corporations. Colorado, Illinois, Michigan, North Carolina, Pennsylvania, South Carolina and Washington, DC, have introduced the same legislation. Benefit Corporations are legally authorized to consider environmental and social benefits as seriously as they do profits. As such, Benefit Corporations are required to create a material positive impact on society and environment; to expand fiduciary duty to workers, community and environment; and to publicly report annually on social and environmental performance using an accredited third party standard.
|
|
 Executive Summary
According to the US Environmental Protection Agency (EPA), hazardous waste is solid, liquid, or gaseous waste (including sludge) that is ignitable, corrosive, reactive, or toxic and poses a potential hazard to human health or to the environment. The petroleum, chemical, and pharmaceutical industries are examples of industries widely known to produce hazardous waste.B Corporations is a certification and branding organization created and managed by the nonprofit, B Lab. The B stands for "beneficial" and is also a reference to the special tax status of C and S Corporations. Although B Corporations do not currently have tax-preferred status, their founders are lobbying to have them legally recognized. In the five years since its founding, the organization has grown to 533 B Corporations, with $3 billion in collective revenues.
In order to become a B Corporation, a company must complete three steps. The first is the 60-90 minute online B Impact Assessment. Once the survey is completed, B Lab prepares a B Impact Report with scores in five areas - environment, employees, community, consumers and leadership - and a composite score, which must be at least 80 out of 200 points. The second step is the Legal Framework. The company must change their bylaws to include environmental, employee and community concerns. Although this type of legal change has not yet been put to the test in court, B Lab stresses its importance, particularly in light of recent acquisitions by large corporations of smaller, socially-conscious firms, such as Ben & Jerry's. B Corporations are also subject to an audit by B Lab's Standards Advisory Council (SAC). In their two-year term, each B Corporation has a one in five chance of being audited. The SAC confirms each question on the B Ratings Survey and adjusts the company's score if necessary. If the audit reveals intentional misrepresentation, a company's B Corporation Certification will be publicly revoked. Also, each B Corporation must pay B Lab 0.1% of its annual net sales.
The benefits of becoming a B Corporation include the marketing and branding effort of the larger organization. B Corporations also have access to sustainability management advice and discounts provided by other members. Many B Corporations joined the organization in order to embed sustainability into their company's mission, and to counter claims of greenwashing. Critics of the concept have expressed concern that it might make B Corporations vulnerable to lawsuits from nonshareholders. Others believe the required corporate documentation changes could scare off potential investors. The organization's founders are currently lobbying for state legislation changes and working with the Obama administration, offering guidance on ways to encourage the formation and continued success of companies committed to environmental and/or social goals.
|
|
|
|
|
Want to Learn More?
Sustainability Watch™ provides evidence-based summaries on over 200 sustainability-related topics. Monitoring thousands of leading journals and periodicals, this product presents best practices in a variety of sustainability areas including environmental impacts and pollution prevention initiatives, corporate citizenship, and long-term sustainable business practices. Sustainability Watch provides sustainability executives and their staff with condensed summaries of key developments across the sustainability spectrum. Using the evidence-based literature surveillance methodology developed for EBSCO's DynaMed service, Sustainability Watch is a robust executive decision support tool.
|
|
