In Episode 36 of The Wendel Forum (originally aired on Green 960 AM radio on October 15, 2011), Wendel Rosen green business partners Bill Acevedo and Donald Simon sit down together to discuss the recent passage of AB 361, the new Benefit Corporation legislation signed into law by California Governor Jerry Brown on October 9, 2011.   The legislation becomes effective January 1, 2012. 

Green Business attorney Donald Simon

Wendel Rosen's Donald Simon helped draft and promote new Benefit Corporation legislation (AB 361)

The legislation was originally advanced by B Lab, a non-profit based out of Pennsylvania and New York that has been promoting a private certification label for companies called “B Corp.”  So, what are B Corporations?  They are companies that choose to publicly measure themselves against metrics that include social and environmental missions.  (By the way, Wendel Rosen is a certified B Corporation).  Last November, B Lab tapped an elite team of lawyers in California, Donald along with Jonathan Storper and John Montgomery, to form the working legal group to craft and promote the legislation, which became known as AB 361.   Assembly Bill 361 (Huffman)  creates a new corporate structure available to companies that want to build social and environmental values into their core mission.  

Adopting the Benefit Corporation form of entity will protect corporate officers (and hold them accountable) for socially- and environmentally-driven decision making.   It requires transparency and verification from those companies choosing to take its form.  Donald and Bill explain how this legislation will help to differentiate genuine core corporate values from great marketing hype in the sustainable business marketplace and the steps companies can take to switch to this new corporate form.

Erik Trojian, Director of Policy for B Lab, joins the conversation to help explain what’s happening nationally to introduce Benefit Corporation.  For example, in New York, similar legislation is currently awaiting the governor’s signature.  There are several other states that have already enacted these types of laws.  With the passage of these bills across the country, it increases the opportunities for new purpose-driven investment dollars to support innovative businesses.  

States that have passed B Corp legislation: 

  • California
  • Hawaii
  • Virginia
  • Maryland
  • Vermont
  • New Jersey

Forthcoming legislation: 

  • Colorado
  • New York
  • North Carolina
  • Pennsylvania
  • Michigan 

We invite you to learn more about this new form of corporate entity and what it might mean for your green business by listening to the interview.  Then tell us what you think.
Will your company consider this form of entity? 

Post Links:

Interview discussion regarding AB 361 Benefit Corporation legislation: Episode 36 of The Wendel Forum (27.35 minutes, mp3)

B Corporations / B Lab website: http://bcorporation.net/

Green 960 AM radio website: http://www.green960.com/main.html

Wendel Rosen’s B Corp Listing: http://www.bcorporation.net/wendelrosen

Around the Capital legislation tracking website: http://www.aroundthecapitol.com/Bills/AB_361/20112012/

Tracking B Corp Legislation Around the Country: http://www.bcorporation.net/publicpolicy

Benefit Corporation Legal Provisions and FAQ from B Lab: http://www.bcorporation.net/resources/bcorp/documents/Benefit%20Corporation%20-%20Legal%20Provisions%20and%20FAQ.pdf

Donald Simon website bio: www.wendel.com/dsimon

Bill Acevedo website bio: www.wendel.com/wacevedo

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In Episode 34 of The Wendel Forum(originally aired on October 1, 2011 on Green 960 AM radio), show host Dick Lyons speaks with Flory Wilson, Director of International Standards at B Lab.  Flory has been instrumental in helping to develop a new rating system for impact investing in North America and around the world – GIIRS.

In their discussion, Flory and Dick discuss the origin of “impact investing,” a term that really only came into popularity about three years ago. Impact investing refers to investors placing capital in companies and funds that deliver positive financial returns while delivering positive social and environmental impacts on their communities.  The concept is relatively simple, but achieving a reliable way to measure, verify and report on a company or fund’s impact has been a challenge, leaving investors with no real way to gauge their impact investments.

Investors knew how to judge returns on their money – profits (just look at the bottom line).  But what has been lacking is a way to analyze and report the other two contributors to the triple bottom line (referring to people, planet and profits). 

The GIIRS crew has spent the last couple of years setting up a framework for reporting and verifying the results of entities that might be desirable vehicles for impact investors.  The audit process takes into account such aspects of a company as governance structure, entity ownership structure, workforce engagement, community support, and environmental footprint.  They look at how the company manages the supply chain and distribution structure and the actual environmental impact of the company’s products and services. 

When assessing a fund, the rating system takes into account the fund manager’s track record, how they screen investors and portfolio companies, how rigorous their standards are, how they manage the investment over time, and their investment exit strategies.

Flory explains some of the reporting features and the review process, as well as the types of businesses and funds that are currently participating in the program.

GIIRS recently had a “coming out” party of sorts at the Clinton Global Initiative Annual Meeting in New York.  During this event held September 20-22, 2011, fifteen pioneer investors with $1.50 billion in impact assets, declared their preference for GIIRS-rated funds and companies. They included JP Morgan, Prudential, the Rockefeller Foundation, private equity funds, family foundations and philanthropic organizations, as well as international public sector financial institutions.

Listen in to the episode and let us know your thoughts.  Will these types of metrics have a significant impact on the future of investing?  What might be the next steps in this evolution?

SHOW NOTE:
Tune in on Saturday, October 8, 2011, to get a sneak peak preview of Sustainable Industries Economic Forum featured speakers Bonnie Nixon, executive director of  The Sustainability Consortium, and Alex Bogusky, founder of the FearLess Revolution.  The Forum will be held on October 20 in San Francisco and there is still time to get your ticket by visiting the Sustainable Industries website.

Post Links:

Listen to the interview with Flory Wilson: Episode 34 of The Wendel Forum(27:45 min, mp3)

GIIRS website:  www.giirs.org

Clinton Global Initiative Annual Meeting website info: http://www.clintonglobalinitiative.org/ourmeetings/2011/default.asp?Section=OurMeetings&PageTitle=CGI

Sustainable Industries Economic Forum website: http://sustainableindustries.com/events/economic-forums/sustainable-industries-economic-forum

Dick Lyons website bio: www.wendel.com/rlyons

Green 960 AM radio website: www.green960.com

You’ve got to love a sustainable business whose slogan is “Change Starts With Your Underwear.” 

PACT is a Berkeley, California-based company that makes organic underwear with a social mission.  Listen to PACT co-founder and CEO Jason Kibbey in a discussion that traces this company’s path from a business school idea to a thriving company with a national distribution on the internet and in boutique retail outlets. 

In Episode 26 of The Wendel Forum (originally aired on August 6, 2011, on Green 960 AM radio), Jason shares with show host Dick Lyons  how the company’s values for sustainability and social impact affect all aspects of the supply chain, including sourcing the organic cotton, product manufacturing, distribution and packaging. 

The company initially launched as an e-commerce product and is now found in about 50 stores, including boutiques and Nordstrom’s.  Not only do they make a sustainable product (even the shipping bags are 100% compostable), in addition their social impact mission includes incorporating business solutions such as working with a third-party logistics service that offers employment training and paid work opportunities to adults with developmental disabilities. 

Other discussion topics include the PACT model for impact giving, what the company did as a start up to tap into early funding sources, and the desire to add fun to environmental activism.

Want to know what the name PACT represents?  You’ll have to listen to the show to find out.

Post Links:

Listen to the interview with Jason Kibbey:  Episode 26 of The Wendel Forum  (27 min 36 sec)

PACT company website: http://www.wearpact.com/

About show host Dick Lyons: www.wendel.com/rlyons

Green 960 AM radio website: www.green960.com

Donald SimonWendel Rosen green business attorney Donald Simon will be a panelist on July 21 at the following presentation being hosted by The Hub in San Francisco.  Donald has been part of the legal working group to get the AB 361 legislation passed, including recently testifying before senate subcommittees.  You can view a recent video interview with Donald given on the steps of the capital in which he discusses the purpose of the benefit corporation legislation.

Here’s the event description.  Full program information, including the rest of the panelists and registration information, can be found by following the link at the end of this post.   Hope to see a great crowd in attendance. 

Pursuing Profit and Purpose: The Debate in California’s Statehouse and What it Means for Us

California has been a pioneer of innovation on many fronts – industry, media, science, and technology.  Today our statehouse is considering two bills that could significantly enhance California’s ability to innovate in the social enterprise sector.

In the State Assembly and State Senate, new legal forms are being considered for corporations — the Benefit Corporation and the Flexible Purpose Corporation.  Both seek to make it easier for entrepreneurs to pursue both purpose and profit under one roof.  

Why do we need such legislation?  What are the differences between the two bills?  Will new laws make it easier for entrepreneurs to find start-up capital?  What are the prospective advantages and potential perils for investors?  Should for-profit social businesses benefit from preferential treatment similar to the incentives available to non-profit organizations?

In partnership with the Impact Economy Initiative of the Aspen Institute, Omidyar Network is proud to host a conversation with leading voices in this conversation.  Panelists will share insights on the legislation as well as explore implications for impact investors, social entrepreneurs, and philanthropists.  This will be a hands-on discussion designed to frame the issues in a practical manner that will be useful to all.

http://profitandpurposedebate-estwhdr.eventbrite.com/