30 states and the District of Columbia have passed legislation legally recognizing "triple bottom line" businesses.
Among the many dozens of delivery vehicles that hit the streets of Portland, Oregon, every morning, B-Line’s colorful “cargo trikes” stand out.
Looking something like pedicabs on steroids, the company’s electrically boosted but human-powered vehicles can haul up to 600 pounds of goods.
Every morning, B-Line’s fleet of eight trikes deploys itself across Portland, delivering organic produce, coffee and artisanal bread before switching to parcel deliveries for the remainder of the day.
The company calculates that since its founding in 2009, when it began with just two trikes, it’s made more than 10,000 deliveries and – more importantly – reduced carbon emissions by an estimated 350,000 pounds.
“ Businesses choosing to be “benefit companies” must include a social purpose in its charter”
More than that, B-Line is legally obligated to pursue its social mission. Along with a growing number of socially-conscious businesses across the country, B-Line is a “benefit company” with special legal status under state law.
Under this legislation – variations of which have also been adopted in 29 other states and the District of Columbia – businesses choosing to be “benefit companies” must include a social purpose in its charter, adopt a third-party standard and prepare an annual report for shareholders assessing how well it met its social goals.
Benefit company status carries no tax or financial benefits, and in some states, shareholders can even sue a benefit company that fails to live up to its mission.
On the flip side, owners are shielded from shareholder lawsuits if their decisions aren’t just about maximizing profit.
“It’s a chance to make it easier for entrepreneurs and business leaders to bring their values to work,” says Oregon State Rep. Tobias Read, who led the push in Oregon for benefit company legislation. “It’s a chance for companies to make clear that part of their reason for being goes beyond profit – that they want to take into consideration the impact of their decisions on their employees, their communities and on the environment.”
Since January 2014, when Oregon’s benefit company law went into effect, 549 businesses have registered in Oregon as benefit companies, including a bookstore, a seafood supplier and even an investment firm that seeks to invest in other benefit companies.
According to B Lab, a non-profit that certifies benefit companies and advocates for benefit company legislation, around 3,000 benefit companies now operate nationwide. While many of these companies are small, some are well-known brands such as Patagonia, Method and organic baby food maker Plum.
“There are 70 million ‘conscious consumers’ out there making their purchasing decisions based on the morals and missions of business,” says B Lab policy director Holly Ensign-Barstow.
According to a 2012 study by Nielsen, as many as 66 percent of consumers around the world say they prefer to buy products from companies “that have implemented programs to give back to society,” and 46 percent are even willing to pay more for products from these companies.
Creating opportunities for alignment
It’s also not just consumers who benefit from the growing interest in benefit companies. B-Line founder Franklin Jones says many of his clients are socially conscious companies themselves, such as Organically Grown, the largest supplier of organic produce in the Northwest.
“We’ve been delivering for [Organically Grown] nearly every day of the year for the last six years,” says Jones. “There’s an alignment between companies that have both a very strong eye on the bottom line and on their social and environmental impact. Our growth has definitely been enhanced by the fact that we’re a benefit corporation.”
“ This is an opportunity for CEOs and founders to connect their vision to a larger movement that’s using business as a force for good.”
“It’s very bipartisan,” Ensign-Barstow says.”We’ve had very conservative sponsors and very liberal sponsors. We’ve had 12 states vote unanimously in both the House and Senate to pass this legislation.”
In an environment where business and the public good have too often been perceived to be at odds, the growing number of benefit companies is proof that “triple bottom line” companies can successfully pursue social, environmental and business goals. And key to this validation is the legal recognition from states with benefit company legislation as well as certification from organizations such as B Lab.
“It’s an opportunity for CEOs and founders to connect their vision to a larger movement that’s using business as a force for good,” says B-Line’s Jones. “It’s a great example of how businesses can evolve to be beneficial to their communities.”
This article first appeared on Republic 3.0, a project of the Washington Monthly.