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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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While there are a few big names on the list -- like Patagonia, Method and Change.org -- many of the companies are ones most consumers likely haven't heard of. As Alex Goldmark writes for GOOD -- that's because many of these companies are actually business-to-business operations. "These businesses deserve twice the recognition because they don't face the same public pressure to go green," writes Goldmark. "Of the 19 companies that took the title 'best for overall impact,' more than a third are business-to-business. Another third also provide some mix of consumer- and commercial-focused offerings ... B Lab measures results and brings us companies that toil away on principal even when nobody's looking." 

It's easy to see why a consumer would seek out a B Corp when looking for a product or service. But there is more in it for companies than just winning over progressive-minded consumers and earning the accolades. "For one thing, Benefit Corporations can't be held liable by courts for failing to place profits over everything else," writes Jamie Raskin for the Nation. "This is an important shift in law. The fear of shareholder litigation has driven many public-spirited businesses, most famously Ben & Jerry's, to take the high bid rather than the high road in a corporate takeover fight. Becoming a Benefit Corporation declares legal independence from the profits-über-alles model. More important, having Benefit Corporation status sends a powerful message to shareholders, employees, business partners and consumers about what kind of company you're running."

This, Raskin writes, is one of the most powerful shifts we've seen in business. "We can have a market economy without having a market society, and we can have prosperous corporations that act with conscience."

Right now the mighty power of 500 B Corps may be a drop in the bucket compared to the huge multinationals that control our economy and politics. But our business-as-usual model in recent decades has put us on the fast track to financial and ecological ruin. Without a dramatic shift toward revolutionary change, we're in a mess of trouble. By changing the way we do business, B Corps may be providing an invaluable part of the equation for change.

"It may take a while to displace the rent-seeking leviathans that get rich off lobbying, power plays, pyramid schemes and defense contracts," concludes Raskin. "Then again, a lot of those companies have relocated their operations abroad in search of cheaper labor, while the Benefit Corporations are taking root and blossoming right here in America, restoring the bonds of community while doing honest commerce. This is what economic recovery looks like."

 

Tara Lohan is a senior editor at AlterNet and editor of the new book Water Matters: Why We Need to Act Now to Save Our Most Critical Resource . You can follow her on Twitter @TaraLohan.