GOOD

In New York, a Legislative Victory for Social Enterprise

New York state creates a new law to help companies do well by doing good.

Another obstacle to the impact economy's expansion came crumbling down earlier this week when New York Governor Andrew Cuomo signed legislation creating a legal structure for social enterprises in his state.


The bill allows corporations to organize themselves as Benefit Corporations, for-profit entities that have a specific social mission. It had languished for several months on the governor’s desk until a spate of late-year legislation was completed, but passed New York’s divided legislature unanimously.

The law mandates that company directors consider not just bottom-line profit, but also their business’ social and environmental impact, as they make governance decisions. Without the new framework, businesses seeking to combine profit-making with good works face potential legal challenges, difficulty attracting capital and thorny issues around how to sell or scale their firms.

In the United States, corporations are registered at the state level, so supporters of benefit corporations are working their way across the country to get laws passed in as many jursdictions as possible. California approved a the law earlier in the fall, making New York the seventh state to adopt the organizing framework. Getting two major states on board is a big victory for social entrepreneurs.

“Everybody can get behind motherhood, apple pie and benefit corps,” says Jay Coen Gilbert, who co-founded B Labs, a non-profit that advocates for benefit corporations. “The two big economies in the country saying impact is important. It’s a bit of a tipping point.”

In California, socially responsible outdoor retailer Patagonia was a key lobbyist for the law, and expects to switch its corporate registration as soon as the law officially goes into effect. The same narrative is playing out on the East Coast, where companies like Comet Skateboards and online retailer UnCommon Goods are planning to become benefit corporations.

"As a result of this law passing, we're planning to move our incorporation from Delaware to New York," David Bolotsky, UnCommon Goods’ CEO, told GOOD contributor Alex Goldmark. "We want to show our support for the fact that socially responsible businesses now have a legal framework."

As social enterprise becomes a growing part of the economy, more states are expected to adopt these frameworks. Coen Gilbert says his organization’s big challenge is keeping up with requests for assistance in drafting, proposing and campaigning for benefit corporation legislation. Already, commentators are asking questions like “Will Nevada be left behind?

Now, the biggest challenge is to induce ever-larger and more varied companies to adopt the governance framework. Coen Gilbert hopes to see more startups and established companies taking advantage of the legal change, and perhaps even larger public companies.

“A law unused is pretty useless,” he says. “The big thing for us over the next 12 months is trying to make sure there are people actually utilizing the law, particularly in states like California and New York, where there’s a ton of entrepreneurial activity.”

Photo via (cc) Flickr user rakkhi

Articles


September 20th marks the beginning of a pivotal push for the future of our planet. The Global Climate Strike will set the stage for the United Nations Climate Action Summit, where more than 60 nations are expected to build upon their commitment to 2015's Paris Agreement for combating climate change.

Millions of people are expected to take part in an estimated 4,000 events across 130 countries.

Keep Reading Show less
The Planet
via Apple

When the iPhone 11 debuted on September 10, it was met with less enthusiasm than the usual iPhone release. A lot of techies are holding off purchasing the latest gadget until Apple releases a phone with 5G technology.

Major US phone carriers have yet to build out the infrastructure necessary to provide a consistent 5G experience, so Apple didn't feel it necessary to integrate the technology into its latest iPhone.

A dramatic new feature on the iPhone 11 Pro is its three camera lenses. The three lenses give users the the original wide, plus ultrawide and telephoto options.

Keep Reading Show less
Health
via I love butter / Flickr

We often dismiss our dreams as nonsensical dispatches from the mind while we're deep asleep. But recent research proves that our dreams can definitely affect our waking lives.

People often dream about their significant others and studies show it actually affects how we behave towads them the next day.

"A lot of people don't pay attention to their dreams and are unaware of the impact they have on their state of mind," said Dylan Selterman, psychology lecturer at the University of Maryland, says according to The Huffington Post. "Now we have evidence that there is this association."

Keep Reading Show less
Health
Photo by Thomas Kelley on Unsplash

It's fun to go to a party, talk to strangers, and try to guess where they're from just by their accents and use of language. It's called 'soda' on the East Coast and 'pop' in the Midwest, right? Well, it looks like a new study has been able to determine where a Humpback whale has been and who he's been hanging out with during his awesome travels just from his song.

Keep Reading Show less
Science

There is no shortage of proposals from the, um, what's the word for it… huge, group of Democratic presidential candidates this year. But one may stand out from the pack as being not just bold but also necessary; during a CNN town hall about climate change Andrew Yang proposed a "green amendment" to the constitution.

Keep Reading Show less
test