A handful of courageous, pioneering businesses will raise the bar for civic citizenship as they form the Original Utah Benefit Corporations on May 13.
These businesses are choosing a new form of corporation created in the recent legislative session. Their corporate purpose, unlike that of traditional businesses, will include generating materially positive social and environmental "public benefits." This business model will put Utah on the map as a leader in purpose-driven business, helping to attract and retain great places for us to work.
The new law does not provide any automatic financial benefit, no tax incentives, no government purchasing preferences. Instead, these businesses take on the additional compliance requirement of an annual report to the Utah Division of Corporations identifying public benefits they have generated.
There are two reasons why business owners might find this additional burden worthwhile. The first is leadership in living core values. Participating owners simply believe that business should be operating to actively contribute to societal well-being. The second benefit is competitive market positioning, since many consumers are making decisions to patronize businesses based on the values evident in day-to-day business practices and the perception that these firms are "walking their talk."
Why is it important to move toward a business model that includes additional community-focused values?
Business is where our greatest constructive power lies. Think about how the operation of business pervades our lives. Very few people live independently "off the land" anymore. We live the majority of our waking hours working for business. We travel to and from the workplace, put in our hours producing the goods and services that make modern life possible, purchase those goods and services — all part of the conduct of business. Most of our creativity, knowledge, expertise, and productivity are developed for, and channeled into, the workplace.
Business concerns manage most of the development of natural resources, drive many of our laws and regulations, and channel the world’s financial activity. Even individuals who work for government, nonprofits, or faith-based institutions cannot operate their organizations, or live their lives, without participating in the great global marketplace.
So it is vital that business be conducted for a purpose beyond solely generating wealth for owners. It makes sense that many people who own, manage, and work in Utah’s businesses are more concerned about the bigger picture. This picture includes the human and ecological effects of the physical aspects of the workplace and the use of natural resources. It considers the impact of businesses on the surrounding community as well as remote stakeholders. This sustainability mind-set represents an emerging standard for business behavior and positions business as an increasingly vital instrument for the improvement of society.
This positive business trend is a giant step toward the kind of sustainable and prosperous world we all want, where the vast majority of businesses operate in ways that naturally improve our communities and environment. It signals the dawn of Utah’s "purpose economy" — business activity that directly and indirectly improves our world beyond generating wealth. Historians looking back at this generation of new sustainability business champions, these Benefit Corporations, may well recognize the emergence of the new normal for business behavior and the source of an enhanced quality of life over the long term.
Steve Klass is executive director of P3 Utah, a nonprofit promoting business for people, planet and profit.
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