Posted by Jeremy James, Cosgrave Attorney
On May 23, 2013, the Oregon legislature passed HB
2296, allowing new and existing businesses to designate themselves as “benefit
companies.”
What is a benefit company, you wonder, and what does this
have to do with beer?
Well, to answer the first question, a benefit company is a
new kind of business entity that allows directors to pursue social and
environmental goals while still turning (or trying to turn) a profit. Under the traditional for-profit business
model, the folks in charge have a primary obligation to the other owners or
shareholders to maximize the economic interests of the business (i.e., to make money). If, for example, a CEO wakes up one morning and decides the company’s biggest widget
factory ought to switch over to solar power, no matter the expense, she risks
getting fired – and, in some circumstances, embroiling the company in a
shareholder lawsuit – for letting environmental interests get in the way of the
company’s bottom line.
Under Oregon’s new law, that same business could designate
itself a benefit company and write an environmentally-focused policy into its
by-laws, enabling the CEO to take reasonable steps to improve the company’s
carbon footprint without getting herself or the company into hot water (or,
better yet, hot air). As the Oregon
legislature explains in the introduction to HB 2296, a benefit company is “a form
of business entity the purpose of which is to create benefits for the public in
addition to generating profit for the entity’s owners.”
The idea has been around for a few years now, spearheaded by
the advocacy organization B Lab, which
certifies companies around the country as “Benefit Corporations” (and now
boasts 763 certified companies in 20 countries). But state legislation has been needed to
clarify the multitude of legal issues facing benefit companies and their directors
and owners. With HB 2296, Oregon joins
12 other states (according to B Lab’s website) that have adopted some form of
benefit company legislation. And
Oregon’s new law doesn’t just apply to corporations. Limited Liability Companies (“LLC”) will also
be able take advantage of the benefit company structure.
So on to the second question: what do benefit companies have
to do with beer?
Other than the not-insignificant coincidence of starting
with the same letter, benefit companies and beer making seem a natural
fit. For people involved in the brewing
industry, particularly those starting new breweries, social and environmental
goals often go hand in hand (glass in hand?) with ideas about making good beer
and someday running a thriving business.
For example, Colorado’s New Belgium Brewing Company, a very successful maker
of very tasty beer, in this blogger’s humble opinion, recently earned “B”
corporation certification from B Lab for, among other things, writing
commitments to its workers, its community, and the environment into its
corporate laws.
Here in Oregon, pristine ingredients and obsessively
dedicated suppliers and entrepreneurs produce the best craft beer in the
world. The benefit company structure
might provide business owners in the industry a means to ensure that their own commitment
to the community and the environment remains a part of their business for as long
as the beer keeps pouring.
