Lawmakers, Biz Owners Celebrate Dawn of Environmentally-Accountable Corporations

BOSTON – Massachusetts lawmakers, business owners and officials from the non-profit B Lab held a press conference this morning to mark the first official day companies in Massachusetts may file as a benefit corporation under a provision authored by Senator Brian A. Joyce and included in the Jobs Bill earlier this year. Following the press conference, six companies filed the first benefit corporation paperwork with the Secretary of Commonwealth’s office.

“This is a terrific day for Massachusetts as we become an even more attractive place for companies to do business and create jobs,” said Joyce. “The benefit corporation designation is a cost-free tool that will promote economic development and bring considerable social and environmental improvements to the Commonwealth. A new economy is growing across the country made up of businesses that are finding ways to be successful while helping our environment and society at large and the states that welcome these new businesses will be best poised for growth.”

A benefit corporation is a new corporate entity offering entrepreneurs and investors the option to build and invest in businesses that meet higher standards of corporate purpose, accountability and transparency. In a traditional corporation, fiduciary duty focuses almost exclusively on increasing shareholder profits. Organizing as a benefit corporation allows corporations to consider public benefit in addition to profit.

"The diversity of businesses reincorporating here today - a local manufacturer, a tech company providing access to healthcare here and abroad, and an employee-owned, green building company, among others - shows a real demand for a better way to do business across industry and geography," said B Lab cofounder Andrew Kassoy.

“Dancing Deer Baking Company was founded in Boston in 1994, and since its inception, has prided itself on being a company that not only understands its obligation to maximize financial returns for its shareholders, employees and customers, but also realizes the importance of being a leader in community, environmental and social matters,” said President and CEO Frank Carpenito. “Formally registering our company as an early adopter Massachusetts benefit corporation further reinforces our commitment to affecting greater positive impact on society and the environment, while hopefully encouraging other local companies to follow our lead.”

A benefit corporation is designed to make a profit, but not at the expense of public benefit. The provision deregulates purpose only ̶ it keeps all other corporate rights and duties intact. By deregulating purpose, this provision opens up the marketplace, provides investors valuable tools, and keeps money in the market.

“One of the reasons we started our business was to show people that you could create something that adds value to the world, but also makes a profit,” said Nathan Rothstein, President of Project Repat. “The benefit corporation aligns perfectly with that mission, and gives more credibility to the social entrepreneurship movement.”

"As a worker-owned cooperative and a confirmed triple bottom line (people, planet and profits) business, South Mountain was made for benefit corporation status and benefit corporation status was made for us. In a nutshell, it's who we are!” said President John Abrams. “We are thrilled that the Legislature and B Lab have teamed up to make this opportunity available for Massachusetts businesses. It's one more sign that a new, restorative economy is coming to life in the wake of the troubling times of the recent past."

The benefit corporation stamp of approval is meant to provide peace of mind to socially conscious consumers who will now easily be able to identify which corporations are committed to pursuing public benefit. Social impact investors will no longer shy away from investing capital in corporations, because they know that their money will be well spent.

“We're thrilled that Massachusetts law now allows us to register as a benefit corporation,” said Chris Schaffner, Founder of The Green Engineer, LLP. “It allows us to demonstrate to our clients that we are committed to the greater good, not just the bottom line. And it protects our employees, by ensuring their interests are considered in any future plans for the company.”

The designation has already begun to attract business to the Commonwealth such as Dimagi, Inc. who will be re-incorporating their company in Massachusetts due in large part to the benefit corporation designation.

“Dimagi is excited to see Massachusetts take an important step toward fostering greater social impact from our local companies and communities,” said Carter Powers, COO. “As a social enterprise proudly headquartered in MA since our founding in 2002 (both Cambridge and Boston), we feel strongly that benefit corporations will enable positive impact and will spur additional social innovations for Massachusetts and the greater community. Dimagi has been a certified 'B Corp' for the past three years, but has been incorporated in Delaware. We have undergone a migratory merger to incorporate in MA and hope to continue to cultivate the benefit corporation movement. We look forward to continuing work in MA and furthering our mission to integrate innovative technologies into global public and private services in order to improve human health and wellbeing."

Representatives from Dimagi, Inc. in Cambridge, Project Repat in Roxbury, ZeroEnergy Design, P.C. in Boston and Orleans, South Mountain Company, Inc. in West Tisbury, Dancing Deer Baking Company in Boston, LEAP Organics in Cambridge and Green Engineer LLP in Concord were all on hand for the event and most were able to file their paperwork with the Secretary of the Commonwealth’s office today or plan to in the immediate future.

"The shift to a benefit corporation was a natural path, reflecting values already ingrained in our firm's culture and work,” said Stephanie Horowitz, Managing Director at ZeroEnergy Design. “We're pleased to see the state's legal structure enables us to formally express those positive societal and environmental benefits."

“A founding benefit corporation, Social(k), will be joining leading companies in Massachusetts and nationwide, to redefine success in business,” said Founder and President Rob Thomas. “We choose to meet rigorous standards of social and environmental performance, accountability, and transparency and support a movement to incorporate that commitment into a new standard of how business is done.”

Governor Patrick’s signature made Massachusetts the 10th state in the nation to allow benefit corporations. As of this summer, the US has 546 certified benefit corporations across 60 industries. Participating businesses include everything from coffee shops and food retailers to accountants and law firms. Larger examples include outdoor clothing store Patagonia and King Arthur Flour.