Analysis finds environmentally and socially conscious businesses have many competitive advantages
The Benefit Company is a proposed ‘opt in’ corporate status offering a legal framework to build and invest in businesses that meet high standards of corporate accountability and social impact objectives. It would provide amendments to the Corporations Act 2001 to recognise and enable purpose-driven organisations.
SGS worked with B Corp to analyse the economic benefits of the introduction of Benefit Company to corporate status in Australia. The project included a review of the literature, case studies and data analysis. In effect, the Benefit Company challenges a core assumption of economics, that is, that firms are solely focussed on maximising shareholder profit.
The literature review found that when a business is environmentally and socially conscious it can lead to competitive advantages, added brand and customer loyalty, positive financial results, greater workforce attraction and retention, and increased community engagement.
Other benefits include improved worker productivity and higher wages. Benefit Companies could also grow at a faster rate as they will be able to access funds looking for socially responsible investments. Another benefit is greater purchasing of local products which would generate increased economic activity for Australian businesses.
This was the first time an assessment of the economic impact of Benefit Company was undertaken globally.
