B Lab is a non-profit organisation dedicated to using the power of business to solve social and environmental problems. B Lab drives systemic change through three interrelated activities:
1. Building a community of Certified B Corporations to make it easier for all of us to tell the difference between “good companies” and just good marketing
2. Accelerating the growth of the impact investing asset class through use of B Lab’s GIIRS impact rating system by institutional investors
3. Promoting legislation creating a new corporate form that meets higher standards of purpose, accountability and transparency – the benefit corporation.
Launched in 2010 in the United States, legal benefit corporations have legislative requirements to generate both shareholder and social benefit. The legal entity is designed for for-profit entities that want to consider society and the environment in addition to profit in their decision making process. Benefit corporations are subject to the same rules that govern traditional corporations except in three areas – corporate purpose, accountability, and transparency. Nineteen US states and the District of Columbia have passed benefit corporation legislation and a further 17 have introduced legislation.
The project conducted an analysis of the US campaign and resulted in a written case study of the process in the US, identifying the lessons for Australia. The first part of the report examined the implementation of the new corporate form in the United States, including why it was introduced, how it was implemented and the overall impact it has had. In the second part of the report, these findings were used to analyse whether such a legal structure is necessary in Australia and suggest some recommendations about how it might be introduced.