A comprehensive four-bill package introduced on October 14 will allow legal recognition of certified benefit corporations (B-corps) in Michigan. B-corps balance purpose and profit by considering their workers, customers, suppliers, community, and the environment as well as financial success.
“The B Corps structure provides a framework that helps businesses to get organized around their sustainability priorities and maintain a constant effort of improvement towards achieving the highest standard of corporate responsibility to the environment, to society, and, of course, operating a business that is economically sustainable,” says state representative Rachel Hood (D-Grand Rapids), who introduced the bill along with House Democratic Leader Christine Greig (D-Farmington Hills) and state representatives Matt Koleszar (D-Plymouth), and Kyra Bolden (D-Southfield).
Because B-corps status is not legally recognized in Michigan, these and Michigan’s other B-corps businesses and entrepreneurs are open to liability for engaging in social impact and philanthropic goals.
“Currently, B-corps could be liable for considering social and environmental interests, in addition to shareholder interests, when making decisions on how to operate their business,” Hood explains. “Typically, a corporation’s board is obligated to the best interest of the corporation and its shareholders without consideration to any other interests. This package legally recognizes and protects B-corps, who will be legally required to consider their social and environmental impact, as well as viability as a business, when determining company strategies and operations.”
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Kris Spaulding of Brewery Vivant
Thirty-six other states and the District of Columbia currently recognize B-corps. Ten of 19 Michigan B-corps businesses are in Grand Rapids: Atomic Object, Bazzani Building Company, Brewery Vivant & Broad Leaf Local Beer, Cascade Engineering, Catalyst Partners, Gold Coast Doulas, LLC, The Gluten Free Bar, Highland Group, The Image Shoppe, Swift Printing & Communications, Inc., and Valley City Electronic Recycling. Globally, 3,500 businesses are certified B-corps.
“These standards also translate into comprehensive, comparable standards that enable the marketplace to push [non-B-corps] businesses towards better practices,” Hood says. “It creates opportunity for accountability and, obviously, discussion around those societal benefits, environmental benefits, and impacts.”
B Corps businesses are required to provide an annual benefits report. Through third-party verified reporting, they must demonstrate positive social and environmental impact, public transparency, and legal accountability.
“Findings from a 2019 study show that 66% of consumers are trying to make informed decisions about purchasing with companies that have values,” Hood says. “Employees are also highly conscious of the employer they are choosing. B corps status becomes a tool to attract employees.”
Work to support B-corps businesses is not new to Grand Rapids. In 2017, Local First launched the Good for Grand Rapids campaign to recognize companies making a positive contribution to the City. By 2018, this campaign grew into the statewide Good For Michigan initiative. In addition to offering its own assessment and recognition of businesses that balance people, planet, and profit, Good For Michigan assists them in becoming certified B-corps.
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“The Good for Michigan platform partnered to build a process so businesses can take first steps towards B-corps status,” Hood says. “The good impacts include quality, living wage jobs, and businesses that have helped Grand Rapids set up its recycling process and informed ArtPrize and city events on responsible waste management. Energy efficiency work with small local businesses made them able to capture incentives ... Take these a step further, and we are impacting climate change in a positive way. All of these things matter.”
Collectively, HB 6309 would create the legal status for benefit corps (Greig); HB 6310 would require annual benefit reports from benefit corps (Hood); HB 6311 would update the Business Corporation Act to include benefit corps (Bolden); and HB 6312 would update the Business Corporation Act to allow a benefit corps to file its annual benefit report at the same time it files regular annual reports (Koleszar).
“In addition to economic opportunity, there’s also a lot to be said about the importance of fostering business practices that aim to actively give back to the people of our state, strengthen our neighborhoods, and respect our precious natural resources from the get-go,” Koleszar says. “B-corps are the future of corporate responsibility and a good step forward for our businesses and communities, and what’s good for our businesses and communities is good for Michigan."
Written by Estelle Slootmaker, Development News Editor
Photos Rapid Growth Media files.
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