Friday, February 10th was a momentous day for New York business: the first thirteen Benefit Corporations (or B Corps) were officially recognized by the state when the New York benefit corporation law took effect. According to the official B Corp website, these corporations vary from traditional business models for three reasons. They must:
- “Meet comprehensive and transparent social and environmental performance standards;”
- “Meet higher legal accountability standards;”
- “Build business constituency for public policies that support sustainable business.”
The social and environmental impact of these companies is held to a strict test known as the B Impact Assessment, ensuring that their ventures remain socially and environmentally responsible. For the first time, profits do not have to be the main drive behind a company’s decision-making. Instead, the company’s effect on the public good becomes a guiding force.
Although Benefit Corporations already exist in six other states (including Maryland, Vermont, and New Jersey), and have been on the radar in New York for several months, the law officially allowing their formation in New York did not actually go into effect until last week. The bill had originally passed in both houses in Albany back in July. On Friday, thirteen New York companies became certified B Corps, including Greyston Bakery in Yonkers, Call2Action, and Singlebrook Technology.
The passage of this legislation is important for the future of sustainable business and for the future of New York. Hopefully this is just the beginning, and we will soon see a wave of new benefit corporations enter the New York business scene.