We’re talking about the relatively new concept of allowing businesses to voluntarily organize as a benefit corporation and our bipartisan effort to create benefit corporations (or B-Corps) in New Mexico. That concept and effort is in bill House Bill 40, which passed with bipartisan support in the House and Senate, and is now on Gov. Susana Martinez’s desk awaiting signature.
What is a benefit corporation, you ask? It is a private, for-profit business that has made a determination that service to the community is just as important as pure monetary profits. This type of a public statement on a company’s values often attracts outside investment and more capital as like-minded investors or consumers put their money behind companies they support.
We admit it’s not normally how business is done. But there are plenty of examples of how benefits corporations are succeeding and joining a fast-growing movement to unleash the power of business for the public good.
A great example is Patagonia, a maker of high-end outdoor gear and clothing that uses some its profits to help support conservation efforts. This commitment to something beyond pure profit has given Patagonia a huge marketing advantage among people who tend to care about issues relating to conservation.
The positive financial impact of Patagonia’s willingness to give back should not be overlooked. The company opened 14 new stores in 2011 because of a sudden boost in demand, experiencing a more than 30 percent increase in revenue.
For Patagonia, it’s simply smart business to wear their values on their sleeves – and it has paid off.
Another example is Greyston, a baking company in New York that hires people with troubled pasts and uses some of its profits to help rehabilitate people leaving the criminal justice system and looking for employment and skills. Much like Patagonia, Greyston’s service to the community has resulted in financial progress, including growing from 60 to 75 employees.
These success stories are the reasons why we are supporting HB40. If signed into law, this bill will allow companies here in New Mexico to elect to be designated as benefit corporations. Since the designation is entirely voluntary, it will not affect any existing corporate structures. Participating corporations, however, will now have a transparent way to express their dedication to their community.
Patagonia and Greyston have already proven that this business model is a great way to spur economic growth while actively helping their communities thrive. For business owners who may still be skeptical of benefit corporations, an added incentive is the approximately $3 trillion in social impact funds that the free market has dedicated for the purpose of investing in businesses and entrepreneurs who generously give back to their community.…
HB40 protects companies that prefer to purchase goods and services from other local businesses. This means that the revenue accrued by benefit corporations and the jobs they create should only expand and increase over time, and communities will continue to thrive thanks to the good works performed by these companies.
It is time that we set aside the differences that normally divide us and follow the examples of successful benefit corporations. New Mexico’s businesses need to be granted the same kind of opportunities and encouragement to give something back to the community, and in doing so, experience growth in revenue and employment.
The benefit corporation bill unleashes the power of business, liberates business to do more in their communities and attracts significant new outside investment. It is law in 12 states with overwhelming bipartisan support. New Mexico should be the 13th.
No matter how you look at it, HB40 is a win-win for all New Mexicans.