Both Louisiana and South Carolina passed benefit corporation legislation in June 2012, becoming the eight and ninth states in the nation to do so, respectively. Perhaps more important to this growing trend is that both states are the first states in the South to do so, significantly expanding the geographic diversity of this movement and illustrating the broad appeal this new type of corporation is having.
A B-Corp, for short, is required to do what other corporations cannot - consider its impact on equal ground with its bottom line. B Corporations must make a material positive impact on society and the environment and must meet higher standards of accountability and transparency than traditional corporations.
Maryland became the first state to pass this type of legislation in April 2010. Two years later, Louisiana and South Carolina have joined a growing group of states – California, Hawaii, New Jersey, New York, Vermont, and Virginia - interested in developing a new type of business and economy that incorporates employee, community, and environmental interests. This legislation especially aids social entrepreneurs who traditionally have had to balance the social or environmental goals of their business with the need to raise growth capital and generate returns for their investors.
In the same way TransFair certifies Fair Trade coffee or USGBC certifies LEED buildings, B Lab, a non-profit organization certifies B Corporations. As B Lab explains, B-Corps are different because they:
· Meet comprehensive and transparent social and environmental performance standards;
· Meet higher legal accountability standards; and
· Build business constituency for public policies that support sustainable business.
Across the nation, this legislation has received overwhelming bi-partisan support. In both Louisiana and South Carolina, the legislation passed unanimously. To date, there are more than 533 Certified B Corporations with more than $3.3 Billion in revenues across 60 different industries.