In February, California introduced a bill in the Senate that would allow corporations, including start-ups, to create a “green corporation” without being threaten with a lawsuit by their shareholders. The current law on the books in California allows shareholders to take legal action if they believe their corporation becoming environmental will affect their profits.
The new bill will allow companies to become a sort of “for-benefit” corporation, a new type of business that centers around other goals beside financial gain. This has typically been an issue in the past with most corporations from taking an active part in environment and social matters, such as not outsourcing jobs or participating in Earth Day.
This is usually why society has such harsh resentment towards big business; most people believe, and it is true to some extent, that all most corporations are interested in are profits. In addition, most big corporations thumb their noses down on non-profit corporations and some do not even consider them to be corporations.
The push to get more corporations to take a more proactive part in making their companies “greener” has typically been met with hostility. This is not the first time that social activists and lawmakers have been introduced to offer corporations a chance to become more environmentally conscience. Recently, Maryland and Vermont have introduced actions to allow “for-benefit” corporations. However, they are usually geared towards smaller corporations and firms.
This is why the Corporate Flexibility Law of 2011, also known as SB 201, is so important. This law would authorize and legalize the formation of a new type of business known as the “flexible purpose corporation.” It is, for the most part, geared toward the big, public, and well-known companies.
This is why it will be difficult, it seems, for the more established and well-known big corporations in California to change and become “for-benefit” corporations and get “B-Corporation” status.