Will NC lawmakers set a higher standard for business?
Image Credit: You Tube / Screen Grab
State lawmakers have introduced a bill to recognize benefit corporations as a separate category of corporate structure, providing legal recognition for companies with socially responsible missions that extend beyond profit.
Proposed House Bill 534, the North Carolina Benefit Act, would establish a legal status for busineses that include one or more declarations of public benefits in their laws of incorporation. Similar laws have been passed in 29 states.
The benefit corporation status shares similar goals but is not to be confused with B Corp certification, a third-party audit that measures a company’s social, environmental, and labor practices. By meeting rigorous standards of accountability and transparency, B Corps offer a market-based alternative to values-driven nonprofit models. The certification aims to define a higher metric for business success, in the same way that LEED, Organic, and Fair Trade have come to set the bar in other sustainable industries. Since 2007, more than 1,000 companies, including 28 in North Carolina, have voluntarily pursued this private seal of approval which is administered by B-Lab, a Pennsylvania nonprofit. JustNeem, Piedmont Biofuels, TS Designs, Bull City Burger and Brewery, and Spotlight Solar are just a few NC companies with certified B-Corp status.
This is not the first time state lawmakers have considered enacting legal status for benefit corporations. A similar proposal was voted down by the NC House of Representatives in 2013. The current bill has been referred to House subcommittee.