It all began in 2010 when the state of Maryland passed legislation introducing the concept of the benefit corporation.
It all began in 2010 when the state of Maryland passed legislation introducing the concept of the benefit corporation, i.e. a type of for-profit corporation that conduct business with the goal of having a positive impact on both society and the environment. Clothing companies such a Patagonia, ice cream makers such as Ben & Jerry’s, and the crowdfunding platform Kickstarter were quick to become certified as benefit corporations, or B Corps for short, based on their commitment to social values and to implementing responsible social and environmental practices. Today, there are over 1,600 companies around the world that are pursuing this twofold goal of generating revenues and profits while also maintaining high social, environmental, and humanitarian standards.
With the 2016 Stability Law, Italy has become the first country to follow the U.S. in legally recognising the benefit corporation, which is, for all intents and purposes, a for-profit corporation with no limits to the distribution of earnings and dividends, but which measures all forms of environmental and social impact in order to create shared value as a normal part of doing business.
The assessment process, which is based on the four areas of governance, community, people, and the environment, is repeated every other year, and the standards to be met become higher and higher as the corporations’ performance improves.
It is the creation of a new business model—although one inspired by glorious examples of the last century, such as the example set by Adriano Olivetti in Italy—that sees the environment, employees, the community, and all other stakeholders involved as resources and which is able to generate value for the entire community as a part of pursuing an organization’s mission.
Today, there are around twenty B Corps in Italy in a range of industries, from D-Orbit, which develops and commercialises technologies for low-cost satellite recovery in order to reduce the pollution caused by space debris, to Fratelli Carli, a popular brand of oils for both cooking and cosmetic use.
Finally, the financial world, too, has understood the importance of generating “social impact”, so we are seeing a rise in investment vehicles dedicated to these new business models, and a great many individual and institutional investors are seeking out the new forms of “impact investing” being developed by ethical investment funds in order to produce both financial and social returns, while also attracting capital from abroad.
To quote Robert Shiller, who received the Nobel Memorial Prize in Economic Sciences in 2013, “All business ought to be conducted as if people and place mattered in order to create wealth to people and the planet. That, through their products, practices, and profits, businesses should aspire to do no harm and benefit all.”