What is a Benefit (B) Corporation?

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B Corporation graphic

Thanks to the work of B Lab and its partners, corporations can now be protected from shareholder litigation in the name of profit maximization. Image courtesy of B Lab

Corporations are required to deliver the most profits they can to their shareholders. In most states, they must put their shareholders’ financial interest and bottom line above everything else, even the public good.

It wasn’t always that way. When corporations first came into being in the early 19th century, their reason for existence was to serve the public, not profit. Typical corporations were private-public partnerships that were chartered to build or create something that the government couldn’t do on its own, like build a bridge or an interstate railroad. But over time, through various changes in the law, the definition of a corporation evolved to what we have today.

Benefit “B” Corp certification is a new movement whose goal is to redefine what it means to be a successful business. The B Corporation law, which has been passed in seven states, allows businesses to pursue a “triple-bottom line”: profits and environmental and social benefits. A New York City-based nonprofit called B Lab is behind the movement. They drafted the legislation and offer a certification that works in the same way Fair Trade goods and LEED buildings are accredited.

There are over 450 certified B corporations from over 60 different industries in the U.S., Canada and the European Union, including companies like Patagonia, Warby Parker and Method cleaning products. To be certified, the companies pledge to meet comprehensive social and environmental performance standards, higher accountability standards and to build constituency for public policies that support sustainable business models.

PBS NewsHour‘s Paul Solomon reported on B Lab and B Corps earlier this year. Watch the video to learn more about these companies striving to benefit their shareholders and society.

Explore More

Learn more about the curious history of American corporations in the 2004 documentary, The Corporation by Mark Achbar, Jennifer Abbott and Joel Bakan, which is streaming for free on Hulu.

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  • Jay Coen Gilbert

    To clarify:  to earn certification, businesses must meet (not ‘pledge to meet’) rigorous, comprehensive, independently verified standards of social and environmental performance —  http://www.bcorporation.net/become/BRS.  Also, the accountability standards can be viewed here – http://www.bcorporation.net/become/legal.  

  • Mike

    Good government must be able to create strategy for where our society should be heading and plans to get there for the common good of the people, future people, and the planet – all about true sustainability.

    Private companies may fill a role to provide goods and services to fulfill that strategy within the plans.

  • moose

    Rational self interest trumps forced altruism every time. Government’s only role in the marketplace is to provide a venue for grievances that is just. The ultimate of government running the marketplace is N. Korea looks great, right?

  • John Johnson

    These B Corporations will be getting as much of my spending dollars as possible.

  • http://www.facebook.com/emitchellswann Mitchell Swann

    they’ve been around for a couple of years now. I am glad to see Moyers covering them, but I am a little surprised that if this is the first mention of them.

  • llanik

    Is it possible to be a shareholder with any of these corporations?

  • TB

    How socially responsible is it for these companies to offer unpaid internships? Students are already drowning in debt and now they’ll have to take on more debt to be an intern. We’ve created a class of highly-educated poor people. It’s no wonder they have to live with mom and dad after graduation.

  • Dragonfly

    I’ve got grievances: corporations are destroying our environment, buying our politicians, and separating our society into a small number of haves and a large number of have-nots. Let us use government to address these grievances.

  • patinthehat

    movie has been pulled from Hulu

  • James Rountrey

    Greenline Paper Company Is a B-Corp