BOSTON – Companies that enrich society in addition to meeting the demands of shareholders can now tout their good works and expand their business goals by filing as a “benefit corporation” with the Secretary of the Commonwealth.
“They’re competing not to just be best in the world but best for the world,” said Andrew Kassoy, founder of B Lab, which encourages legislation around the country to allow for-profit corporations to prioritize good works as well as profit. “They’re creating great jobs, they’re restoring the environment, and they’re eliminating poverty.”
The new designation of benefit corporations, or B-Corps, was part of the economic development law that Gov. Deval Patrick signed in August, making Massachusetts the tenth state with such a designation, according to Kassoy, who spoke at a State House press conference on B-corps on Monday.
The Harvard Business Review recently likened the B-Corp designation to LEED Certification among developers and the Fair Trade designation among coffee suppliers.
“I had an idea that this would not only be good for our society, not only be good for our company – intuitively, I thought this would be good for our Commonwealth because it would perhaps attract some socially conscious investors,” said Sen. Brian Joyce (D-Milton), who included the language in the Senate Bonding Committee’s re-write of the jobs bill and introduced initial B-Corp filers during Monday’s Senate session. “You know increasingly folks are not only looking to maximize their return, but to put those investment dollars towards good social purposes, and here we marry the two.”
The designation signals to the public that a company does good works; it does not include any tax breaks or other direct monetary benefit, according to Joyce and Kassoy.
Joyce said he was encouraged by the news that DiMagi, a Cambridge software company that had been registered in Delaware had re-registered in Massachusetts to take advantage of the benefit corporation designation, which he said is unavailable in Delaware.