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The Business of a Better World: Can a New Kind of Corporation Save Us and Our Economy?

Corporations by today's definition, are obligated to make as much money as they can. But a new kind of corporation is changing that and potentially our economy, too.
 
 
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In 2012 corporations reign supreme. Citizens for Tax Justice reports that 26 Fortune 500 companies -- including General Electric, Verizon and Mattel -- paid no federal income taxes from 2008 through 2011. Big banks have gotten big bailouts, while kicking back hundreds of millions to elected officials and political parties in the last year alone. It took the government only 18 months to award BP another permit for deep water drilling in the Gulf after its catastrophic well blowout in 2010.

It doesn't seem to matter if corporations cripple the economy, destroy communities or trash the environment, it's still an all-you-can-eat buffet for them. The 2010 Citizens United decision was icing on the cake. Politicians eat from the hand of the corporate kingmakers. The rest of us muscle for the crumbs.

It hasn't always been like this. When the American colonies were first starting out, incorporation was granted for things that would benefit the public good -- like building roads. But corporations today are much more driven by the bottom line and appeasing shareholders, which can make being "good" difficult and risky.

"The public benefit has all too often been subverted as a result," writes Francesca Rheannon on the Corporate Social Responsibility Newswire. "Those corporations that sincerely wanted to operate according to the Triple Bottom Line (variously characterized, but traditionally defined, as 'People, Profits, Planet') have had to privilege profit over the other two goals, or risk shareholders' wrath if pursuing environmental or social goals lessened potential financial returns." 

But that may be changing with the nonprofit B Lab, which started a program less than two years ago to certify a new kind of corporation -- a Benefit Corporation or B Corp.

In that short time over 500 companies have become B Corps. Legislation to change corporate law and make B Corps official entities has been signed in seven states -- Maryland, New Jersey, Vermont, Virginia, California, Hawaii and New York -- with legislation pending in seven more states. The folks behind B Corps believe that, "Governments and nonprofits are necessary but insufficient to solve today's most pressing problems. Business is the most powerful force on the planet and can be a positive instrument for change." 

Our vision is simple yet ambitious: to create a new sector of the economy which uses the power of business to solve social and environmental problems. This sector will be comprised of a new type of corporation -- the B Corporation -- that meets rigorous and independent standards of social and environmental performance, accountability, and transparency.

B Corp in Action

In 1995 in Corte Madre, California, Helen Russell and Brooke McDonnell launched Equator out of a warehouse with a few employees. Today the company has grown into a successful boutique artisan coffee roaster. It has 22 employees and roasts 700,000 pounds of coffee annually, supplying some of the best restaurants, including many San Francisco Bay Area favorites like Thomas Keller's French Laundry, Pascal Rigo's La Boulange bakeries, Tracy Des Jardin's Jardinière, and Sharon Ardiana's Gialina.

Equator has been praised for its quality as well as its mission. “They started out very modestly, and as they have gotten bigger they have had to make choices concerning their growth,” said Ardiana. “They have always had a keen eye concerning making choices that are sustainably based, rather than purely profit driven. Equator really is a model for other businesses, no matter how large or small, to evaluate their practices and make changes. Because every little bit does matter! They have a huge composting program that incorporates all of the chafe and coffee grounds. They even rethought their bagging. Going from a black treated bag to a natural brown one, even though the black one from a branding prospective was their look.”