(3BL Media / theCSRfeed) February 29, 2012 - Springfield, Illinois – The Illinois Senate and Illinois House Judiciary committees passed bills this week that would create a new corporate entity called a Benefit Corporation in Illinois.  Environmental and sustainable business organizations brought this bill to the state legislature to support socially responsible businesses in Illinois.  This bill will next move to a vote on the floor of each chamber.

SB2897 and its companion bill in the House, HB4708 create the “Benefit Corporation Act.” This legislation is carried by State Representative Sara Feigenholtz in the House and State Senator Michael Frerichs in the Senate. 

“’Sustainable’ business is about maintaining and developing competitive advantage in an evolving marketplace in which social and environmental issues increasingly impact the economic bottom line. This legislation will establish Illinois as a forward looking leader intent on attracting and retaining the kind of innovative businesses that will define a more vibrant and resilient future.,” said Peter Nicholson, director of Foresight Sustainable Business Alliance.

"This legislation allows companies like mine to focus on solving social problems in addition to turning a profit. Ultimately, this creates more long term value," said Nancy Goldstein, Founder and Chief Strategist of Compass(x) Strategy.

Under current law, corporations must maximize profits and legally cannot take into consideration other factors in business operations.  Many businesses seek to not only make a profit, but also pursue a public benefit mission, such as environmental sustainability or social responsibility.  Benefit corporation legislation is a completely voluntary new corporate form that does not impact existing corporations and does not provided tax incentives, but rather provides a free market opportunity for businesses to consider society and the environment in addition to profit.

“Under current Illinois law, businesses with a mission of social responsibility may have obstacles to prioritizing this mission.  This legislation will give Illinois’ sustainable businesses flexibility, assuring them that profit maximization will not trump the businesses’ mission,” said Jennifer Walling, executive director of the Illinois Environmental Council.

Seven states have passed this legislation in a bipartisan manner.  These are California, Hawaii, Maryland, New Jersey, New York, Vermont, and Virginia.  The legislation has also been introduced in Michigan, North Carolina, Minnesota, South Carolina, and Pennsylvania.  The legislation follows model legislation spearheaded by B Lab, a non-profit that is trying to use the power of business to solve social and environmental problems.  The model legislation is intended to unify the new corporate form and encourage the flow of capital from investors while garnering bipartisan support nationwide.

Cancel 5000 Your comment has more than 5000 characters. Please delete part of it before submitting. Enter comment text.