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Benefit Corporations & You

Submission by Buffalo First!

Greening up businesses is a hot trend lately, and consumers are noticing. Socially and environmentally responsible businesses help support the community in more ways than just paying taxes, and there are lots of ways businesses can be socially and environmentally responsible without negatively affecting their bottom line, starting with simple things like using recycle bins and working towards sourcing locally and using cleaner technologies. But it can be difficult to measure successes, set goals and let the community know about your efforts and concerns.

Buffalo First has partnered with  B Lab, an organization that has diligently advocated for legislation allowing for the creation of B Corporations throughout the country, to promote B Lab’s Business Impact Rating System (BIR), a tool that businesses can use internally to measure their social and environmental goals. Businesses’ monetary goals are important, but with the BIR, companies can keep track of the other aspects that matter.

Take the BIR Survey

The survey is a good tool to help businesses analyze their social and environmental impact. It’s free and easy to use – there’s a link on Buffalo First’s website – and doesn’t take very long to complete. The BIR survey is broken down into five categories – Accountability, Employees, Consumers, Community and Environment – and grades companies, based on answers to a series of questions, on everything from their work environment and transparency to their diversity and energy use.

The BIR is an internal tool, so the public doesn’t see how your business does on the survey; B Labs just uses the information as an aggregate and measures improvements over time. The more surveys they get, the better the measurements. Companies, too, can use it as a benchmark to track performance and improvements. Buffalo First encourages everyone to use the survey in an effort to increase awareness of the impact that businesses can have on the local economy.

What is a B-Corp?

What exactly is a benefit corporation (B-Corp for short)? Why should a company become a B-Corp? And what’s all this about legislation?

The vision is simple yet ambitious: to create a new sector of the economy that uses the power of business to solve social and environmental problems. Under the law, for-profit corporations are required to make decisions that will maximize profit and benefit their shareholders.

B-Corps, instead, are a new type of corporation, held accountable to a triple bottom line: environmental sustainability, social benefits and monetary profit. That is important when dealing with a public consciousness worried about the environment, employment and other social concerns.

Make B-Corps a Legal Entity in New York State

Buffalo First has been actively supporting the passage of the New York State Benefit Corporation Bill (A.11498b), which would give entrepreneurs and investors the option to establish and invest in businesses that meet higher standards of corporate purpose, accountability and transparency, without increasing regulation or impacting the state budget.

Currently, business owners don’t have the latitude to even spend funds on recycling, green appliances or a host of other simple, environmentally and socially conscious practices because such improvements don’t benefit shareholders. Under the new law, those practices would not only be permitted but encouraged. Instead of sacrificing social responsibility for maximum profit, the two would go hand-in-hand.

As the New York State incorporation structure now stands, socially-minded companies are often left with the catch-22 of either not being able to earn a profit or opening their directors up to possible personal liability by making decisions that do not maximize shareholder profit. As a result, businesses are increasingly choosing to set up shop in states with a benefit corporation option. New York State as a whole, and Buffalo specifically, cannot afford to lose these businesses nor its competitive edge during such a critical time.

The New York State bill was brought up for vote in the New York State Senate at the end of June and passed with overwhelming support. However, it was held up in the assembly for further examination. The state government will soon resume their sessions, and the bill will come up for a vote again.

That means now is the time to get involved! You can help influence the passage of this bill just by talking. If you’re a local business supporter, call your legislator and voice your opinion. If you’re a local business owner, tell your customers and other owners about the bill — make sure they know how important it is and how they can help. Word of mouth is an effective tool, and permitting the creation of benefit corporations a giant step in establishing a sustainable living economy in the Western New York area and a great help for those companies concerned about their social and environmental impact.

Buffalo First will have several calls to action throughout the fall, the first of which will be a forum to further educate local businesses and interested citizens about benefit corporations and the bill.

Written by queenseyes

queenseyes

Newell Nussbaumer is 'queenseyes' - Eyes of the Queen City and Founder of Buffalo Rising. Co-founder Elmwood Avenue Festival of the Arts. Co-founder Powder Keg Festival that built the world's largest ice maze (Guinness Book of World Records). Instigator behind Emerald Beach at the Erie Basin Marina. Co-created Flurrious! winter festival. Co-creator of Rusty Chain Beer. Instigator behind Saturday Artisan Market (SAM) at Canalside, Buffalo Porchfest, and Paint vs. Paint. Founder of The Peddler retro and vintage market on Elmwood. Instigator behind Liberty Hound @ Canalside. Throws The Witches Ball at Statler City, the Hertel Alley Street Art Festival, and The Flutterby Festival.

Contact Newell Nussbaumer | Newell@BuffaloRising.com

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