Legislation creates new legal option for businesses pursuing environmental, social goals
VICTORIA, B.C. - The B.C. Green caucus made history today with the unanimous passing of the first ever Private Member’s Bill from an opposition party. The Greens also positioned the province as a leader nationally by bringing in the first legislation in the country to formally provide a legal framework for businesses committed to pursuing social and environmental goals to incorporate as benefit companies under the Business Corporations Act.
“B.C. Greens are showing a path forward, both by being the first province to pass legislation supporting companies committed to pursuing a triple bottom line, and by demonstrating the strengths of a minority government, where no one party controls what gets passed in the House,” B.C. Green Party leader Andrew Weaver said. “This is what democracy should look like.”
It wasn’t just a lack of votes that held previous opposition parties from passing legislation. This minority government is the first opportunity opposition parties have been given access to official drafting services. These resources empower opposition parties to draft their own Private Member’s Bills, paving the way for all 86 members to be able to pass legislation into law.
“Yesterday, our amendment to the Residential Tenancy Act saw broad tripartisan support from NDP and Liberals at its second reading before the House. The B.C. Green caucus is proud to be offering a vision for how British Columbia’s government and economy can evolve to meet the challenges of today with a collaborative and innovative approach, completely rethinking the underlying status quo for a bold new path forward,” Weaver said.
“Indeed, we have been inspired by B.C.’s incredibly innovative companies that want to play a bigger role in addressing the challenges and opportunities we face - climate change, rapid changes in the nature of work, the gig economy, rapid technological advances, and growing income inequality,” said Weaver. “This legislation is part of positioning our province to be a leader on the cutting edge of global economic trends. We are seeing shifts in consumer patterns and behaviour, particularly among younger demographics sensitive to their social and environmental impact. By becoming the first jurisdiction in Canada to create benefit companies, B.C. can best create space and opportunities for its businesses that want to lead the way.”
Government recognizes the impact B.C. businesses make in their communities, and has been supportive of the concept of benefit companies.
“B.C. businesses are already leaders in sustainable and socially responsible practices, and giving them the option to create a new corporate structure as benefit companies allows them to build their values right into their legal framework,” says Carole James, Minister of Finance. “I want to thank our partners in the Green Party Caucus for bringing this idea forward. By working closely with our minority governing partners, we are helping people and business build a cleaner, better future.”
Catherine Warren, CEO, Vancouver Economic Commission
“As Vancouverites and British Columbians, we are proud to be a hub for bold, mission-driven companies, so it comes as no surprise to us that B.C. could pass the first benefit company legislation in the country. Jobseekers, international businesses, and investors with common values come here to build on common ground. The Vancouver Economic Commission is focused on inclusive, resilient economic development and prosperity for all. We recognize that we can always do more – to help local companies lead for people, planet, and prosperity – and VEC’s sees this legislation as one way to ensure that social and environmental values advance tomorrow’s economy.”
Chris Arkell, co-founder of Sea to Sky Removal
"As a company focused on waste management in the construction industry, we wanted to hold ourselves to the highest available standard of public accountability. Unlike traditional corporations, companies like ours are committed to considering the impact of their decisions not only on their shareholders, but also on their stakeholders - workers, suppliers, community, consumers, and the environment. This legislation strengthens our ability to maintain our core values even as future directors, management or ownership changes may happen."
Michelle Reid, sustainability czar, Mills Office Productivity
"As a family owned business since 1949, we are pleased to see the government moving forward in recognizing the work businesses like ours have done and continue to do for our people, planet and communities. This legislation provides traditional businesses the opportunity to take into account all stakeholders when making company decisions. Businesses and the commitments they make to their employees, surrounding communities and the environment are vital to ensure everyone has the opportunity to flourish. We would like to thank the leadership of the B.C. Green Party for helping to secure the legacy of social and environmental stewardship that we will continue to provide in the years to come."
What does this legislation do?
- This legislation provides a simple framework for companies to adhere to that is legally and commercially recognized and creates a higher standard, by requiring that:
- Directors act with a broader purpose with respect to society and the environment, and balance this commitment against the best interests of the company.
- Companies promote a specific “public benefit”, or a positive effect.
- Directors must publish an annual report that describes the company’s activities in relation to their benefit commitments, and they must select an independent third party standard to report their work against.
- This legislation creates clear expectations about the nature and mandate of the company and provides protections for directors who choose to prioritize public benefits.
- It will provide certainty for impact investors of the nature and mandate of the company.
- It will enable companies to attract capital while being true to their mission as they grow.
- It will protect the vision of the founders of benefit companies by embedding the environmental and social benefits into the company's mandate.
How do benefit companies differ from Community Contribution Companies (C3s)?
- Government introduced C3 legislation in 2012 as a hybrid option between for-profit businesses and non-profit enterprises.
- C3s and benefit companies are complementary ways for government to support a spectrum of socially and environmentally responsible business.
- C3s are subject to restrictions related to their allocation of profits and their transfer of assets, while benefit companies would have no such restrictions.
How can a company become a benefit company?
- A company can become a benefit company by altering its notice of articles to include the required benefit statement through a special resolution, which would require two-thirds approval to pass.
- A company would need to include in its articles a commitment to operate in an environmentally sustainable and socially responsible manner, and to promote one or more specific public benefits.
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