Legislative Talking Points
The following are a list of important legislative talking points on benefit corporation legislation that can help when explaining the topic. Please contact B Lab at firstname.lastname@example.org or 212-608-4150 if you are interested in passing benefit corporation legislation.
- Benefit corporation legislation has received wide bipartisan support with almost 90% approval on all floor votes and has been passed in 32 US jurisdictions, including DC and Puerto Rico, as well as Italy.
- Just as shareholders of traditional corporations enforce the requirement to maximize profit, shareholders in benefit corporations determine whether the company has met its statutory obligations to create value for society and the environment. This leaves the definition of positive impact up to the business and shareholders.
- Benefit corporations are attractive to a large and growing market for socially responsible investments as well as more traditional investors. According the U.S. Social Investment Forum, almost $6 Trillion is currently invested in some form of socially responsible investing. See reasons why investors like benefit corporations here.
- Numerous well-known venture capitalist have already invested in benefit corporations, including Andreessen Horowtiz, Benchmark, Founder’s Fund, First Round Capital and The Westly Group. Recently, benefit corporations have raised large amounts of capital including Altschool, which raised $100M, Cotopaxi which recently raised $6M and Farmigo which raised $16 M. See case studies of benefit corporations raising capital here.
- Since the perception of what is positive for society and the environment may differ from one company to the next, the legislation lets the company chose which third party standard to use to assess its activities. There are quite a few third party standards available in the marketplace and many are available for free.To see a list of third party standards click here.
- Over 3500 companies have chosen to become benefit corporation statutes. Companies are even operating as foreign corporations in states that lack benefit corporation statutes.
- Prominent companies like Kickstarter, Method Products, Patagonia, Plum Organics, Greyston Bakery, Laureate Education and Cotopaxi have all become benefit corporations.
- Benefit corporations are beginning to move into the public market. Laureate Education, a $4B revenue for profit education company backed by KKR, filed an S-1 to go public in October 2015.
- Passing benefit corporation legislation can help create a no-cost economic development opportunity for states by creating pathways for a new market of social enterprises to scale and for social impact investors to invest efficiently.
- There are no tax benefits or impact on current tax law.
- The choice to become a benefit corporation status is completely voluntary and has no impact on existing companies, other corporate forms, taxes or government regulation.
- Benefit corporations produce an annual benefit report using a third party standard to benchmark their performance. Investors and consumers can use this report to make informed financing and purchasing decisions.
- The benefit corporation reporting requirement helps distinguish between good actors and bad actors and prevents greenwashing.