Updated: May 31
Author: Alessandra Casagrande
Date of Publication: 23/02/2023
Nowadays, sustainability has become a critical issue that businesses can no longer afford to ignore. In fact, the future of our planet is at stake, and companies must take responsibility for their actions and their impact on the environment. Therefore, one way in which businesses can make a positive contribution to sustainability is by becoming a Benefit Corporation.
What is a Benefit Corporation?
Benefit Corporations, or B Corps, are for-profit businesses that are legally required to pursue a social or environmental mission in addition to making a profit. This means that B Corps must consider the impact of their decisions on not only their shareholders, but also their stakeholders.
B Corps are a relatively new type of legal entity, first established in Maryland in 2010. Since then, more than 35 states in the US have passed laws to create the legal framework for B Corps. In addition to meeting the traditional legal requirements for a corporation, B Corps must also meet higher standards of social and environmental performance, transparency, and accountability.
The Connection Between Benefit Corporations and Sustainability
Sustainability and Benefit Corporations are closely linked. In fact, many B Corps have a strong focus on sustainability and environmental impact. This is because these issues are often central to their social mission. So, by pursuing a sustainability mission, B Corps can contribute to creating a more sustainable future for everyone. This way, they benefit both society and the environment.
One way in which Benefit Corporations can contribute to sustainability is by reducing their ecological footprint. Many B Corps have implemented sustainability practices, such as reducing their energy consumption, implementing recycling programs, and using sustainable materials. Thus, by reducing their environmental impact, B Corps can help to address the urgent environmental challenges we face, such as climate change and resource depletion.
For example, Patagonia, a B Corp that designs and produces outdoor clothing, has made a strong commitment to sustainability. Apart from that, Patagonia has implemented various initiatives, such as using recycled materials in their products and reducing water consumption in their manufacturing process. Last, Patagonia also invests in environmental activism and campaigns for public policy changes to protect the environment.
How do B Corps promote social well-being?
Another way in which Benefit Corporations can contribute to sustainability is by prioritizing the well being of their employees and the communities in which they operate. So, B Corps can help to create a more equitable society by creating fair and safe working conditions. In this way, they provide access to healthcare and education supporting local communities as well. This in turn can contribute to more sustainable social, economic, and environmental outcomes.
For example, Ben & Jerry's, which specializes in ice cream production, has a strong sustainability and social justice. In particular, Ben & Jerry's has implemented various initiatives, such as sourcing their ingredients from fair trade and organic suppliers. Also, it supports community-based initiatives through their foundation.
In addition to their impact on the environment and society, Benefit Corporations can also benefit financially from pursuing a sustainability mission. In fact, consumers are increasingly aware of the importance of sustainability, and are more likely to support businesses that share their values. Therefore, by investing in sustainable practices and initiatives, B Corps can attract customers who are willing to pay more for environmentally friendly products.
All in all, Benefit Corporations and sustainability are closely connected. B Corps can contribute to creating a more sustainable and equitable future for everyone by pursuing a social or environmental mission alongside their profit goals. In addition, they can reduce their ecological footprint, prioritize the well-being of their employees and communities, and attract customers who value sustainability. So, Benefit Corporations have the potential to be a powerful force for sustainability. As a result, they can play an important role in addressing the urgent environmental and social challenges we face today.