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Exclusives

Reorganize as a “B Corp” and Save the World

By C. J. Hughes
March 16, 2012

Reorganize as a “B Corp” and Save the World
Photo © Josh Douglas Smith
Vision Architecture designed the Camden Friends Meeting House, LEED-Platinum project completed in 2009.

Many firms donate time to projects that do right by the world. Others want to contribute even more, but without jettisoning their business models and becoming all-out nonprofits.

Related Links: Does “Doing Good” Pay the Bills?

A possible middle ground: reorganizing as a benefit corporation, or “B corp.” While these companies earn profits and pay corporate taxes, they also pledge to act in an environmentally and socially responsible way. In some states, in exchange for their commitment, they are entitled to legal protection for their good works. Those B corps that are particularly committed to altruistic goals can apply for certification by B Lab, a San Francisco-based advocacy group founded in 2006, which estimates that about half of all B corps are currently certified.

The legal B corp designation allows a company to officially alter its modus operandi. By law, public companies are required to act in the best interest of shareholders (that is, decisions must be financially driven)—and these companies might face civil penalties if they fail to fulfill their fiduciary duties. A B corp, however, takes both financial and non-financial factors into account and is immune from shareholder lawsuits.

Maryland was the first to pass legislation recognizing B corporations, in 2010. Six additional states now allow them: California, Hawaii, New Jersey, New York, Vermont, and Virginia. In addition, similar laws have been introduced in Pennsylvania, Michigan, and North Carolina. (Businesses are incorporated under state, not federal, laws.)

Of the 517 B Lab certified benefit corporations now in existence, Patagonia and King Arthur Flour are probably the best known. Also on the B Lab list are law offices, solar panel manufacturers, and roughly a half-dozen design firms and consultancies, including Compass Rose, a full-service firm in Minnesota, and Re:Vision Architecture, based in Philadelphia.

Designers say the B corp designation can make their firm more attractive to certain types of clients. “Plus, it shows leadership” and may inspire other firms to be more eco- and socially conscious, says Scott Kelly, a Re:Vision Architecture co-founder.

As more states recognize this new type of company, the number of B corp design firms is expected to grow. Andrew Kassoy, a B Lab co-founder, says architects often are open to progressive business models. “They always want to be at the front of a trend,” he says, “not following it.”

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