This just in, the 2 houses of the New York state legislature (House and Assembly) passed benefit corporation legislation with a final vote of 892 ayes and 62 nays at midnight on December 12, 2011.
New York Passes Benefit Corporation Legislation
This makes New York the 7th state to pass benefit corporation legislation (read about the other six states here). This continues the momentum of the benefit corporation movement which most recently saw the passage of similar legislation in California in October 2011. As the third most populous state in the country, New York’s passage of the bill with strong bi-partisan support underscores the shift in the way consumers, companies, the legislatures envision the future and potential of business to do well by doing good.
Benefit corporations create a new corporate form of business, one which is for-profit while also creating a material positive impact on society and the environment. It is a more holistic approach to business—seeing business as part of a broader ecosystem.
While traditional corporations seek to maximize shareholder profit, benefit corporations shift the focus to maximization of stakeholder benefit. Stakeholders, in this context, include environment, society, as well as shareholders.
Comments and Quotes on Passage of Benefit Corporations in New York
B Lab has released a few quotes of those who worked closely in the passage of this legislation, including these:
“Political leaders like Speaker Silver, and Senators Squadron and Larkin understand that New York needs to attract businesses whose core purpose is to create more high quality jobs and to improve the quality of life in communities across the state,” said Andrew Kassoy, co founder of B Lab, the nonprofit organization that drafted the model legislation. “The benefit corporation bill will unlock billions of dollars in impact investment capital and enable entrepreneurs across the state to start businesses that solve some of society’s greatest challenges.”
“Benefit corporations will mean New York is open for business in an important new way. Benefit corporations will unlock billions of dollars in new investments in New York while empowering companies to do well and do good,” said Senator Squadron. “By offering this opportunity to entrepreneurs and investors, New York will bring new businesses into the state, new investors into the market and a new socially-minded approach for our entrepreneurs.”
“The passage of benefit corporation legislation is an important and much needed step forward to grow our New York state economy and create more jobs which can also provide greater social and environmental benefit,” says David Levine, co-founder of the American Sustainable Business Council whose members’ organizations represent over 100,000 businesses. “At a time when the country is looking for solutions to build the economy, New York is helping to lead the way with an innovative and sustainable business strategy.”