A bill that would allow New Mexico businesses to designate themselves as benefit corporations—thus committing to the social good along with the bottom line—is back for at least the fourth time in this year's Legislature, with supporters cautiously optimistic about its passage.
Sponsor state Rep. Zachary Cook, a self-described "conservative Republican from Ruidoso," chatted with SFR briefly after the bill received a unanimous do-pass vote from members of the House Commerce and Economic Development Committee on Jan. 29. It was frustrating, he says, when former Republican Gov. Susana Martinez pocket-vetoed the bill in 2013, and also seeing it stall out in last year's session.
"It will be good for the economy," he says. "And it could have happened a long time ago."
Indeed: Only 13 states had embraced the concept of benefit corporations when Cook first introduced the bill. Today, more than 35 of them, along with Washington, DC, have passed legislation allowing for benefit corporations, according to the Secretary of State's office in the bill's fiscal analysis report, which says the law will cost the state $10,000.
In the same report, the state Economic Development Department suggests creating the new designation could "provide for additional investment flow" and would allow New Mexico to better compete with neighboring states that provide benefit corporation designations, such as Arizona, Colorado and Texas. The report also cites US Social Investment Forum data that benefit corporations have raised nearly $2 billion in capital with nearly $6 trillion currently invested in some form of socially responsible tool.
The bill has a history of bipartisanship support. Cook first co-sponsored it with former Democratic state senator turned Albuquerque mayor Tim Keller. This year, state Rep. Natalie Figueroa, D-Albuquerque, is co-sponsor. Moreover, Gov. Michelle Lujan Grisham, who included the bill on her call for the session, "is generally supportive of the concept," Tripp Stelnicki, the governor's director of communications, confirmed via email.
On Feb. 3, the bill passed the House Judiciary Committee with three amendments, after addressing some lawmakers' concerns about liability provisions in the bill. That passage puts it on track for a possible House floor vote this week, at which point it moves on to Senate committees.
As written, House Bill 118 would expand the state's Business Corporation Act to allow businesses and corporations to voluntarily identify as benefit corporations. Broadly speaking, a benefit corporation takes the public good—stakeholders' concerns—into account along with making a profit for its shareholders. Among other requirements, businesses would adhere to third-party standards for benefit corporations and would produce public reports about said benefits.
As a national movement, the ideals behind benefit corporations have grown and spread to mainstream corporate America. Last August, the influential Business Roundtable, which includes approximately 200 CEOs from prominent US companies, revamped its 1997 corporate philosophy statement to emphasize investment in employees, ethical transactions with suppliers and supporting communities.
While New Mexico hasn't offered companies the option of incorporating as benefit corporations, some New Mexico businesses have set up in states that do provide the designation.
Others have sought third-party certification from the nonprofit B Lab, whose process is considered the gold standard and credited with bolstering the entire movement. B Lab certified its first 82 corporations in 2007; currently, there are more than 2,500 certified B Corps in more than 50 countries. Ben & Jerry's and Patagonia are two examples of US companies certified as B Corps. In New Mexico, seven firms have that B Corp status, four of them in Santa Fe.
One of them, Meow Wolf, incorporated in Delaware as a public benefit company and also became a B Lab-certified B Corp in 2017.
Creating public benefit status in New Mexico "would be beneficial to our state," Danika Padilla, Meow Wolf's senior director of social impact, tells SFR. Padilla testified in support at the bill's first hearing. The new law would "encourage and bring more awareness to other businesses to join the movement," she says, and thus "would increase the amount of good businesses can do and will do for our state." Meow Wolf, she notes, has given more than $1.5 million to the community over the last three years; its annual 2019 report lists more than $630,000 given to nonprofit arts organizations and more than 400 organizations supported overall.
Taos Ski Valley was the first major ski area to seek B Corp certification when it did so in 2017. It hosts the B Inspired Festival this Thursday, Feb. 6, which includes panel discussions on business and social impact, on which Padilla will speak.
Padilla also is one of three speakers who will appear later this month on a panel discussion regarding B Corporations, sponsored by Santa Fe Innovates, a new business accelerator that launched last November.
Santa Fe Innovates founder Jon Mertz has embarked on B Corp certification for his nascent company, and also testified at two hearings for New Mexico's proposed bill. Mertz incorporated in New Mexico, but will reincorporate as a benefit corporation if the bill becomes law. He describes Santa Fe Innovates (santafeinnovates.com) as "working to build a collaborative community around tech and solution-oriented startups that have a social responsibility element embedded in them."
Dillman incorporated her company in Delaware last February as a public benefit corporation, and registered it to do business in New Mexico. She says she and her co-founders would have incorporated in New Mexico if the state allowed for benefit corporation status; they have not decided whether they will seek B Corp certification from B Lab. "It really is an amazingly powerful tool for existing companies to shift mindset and policy," she says, "but because we were starting from that point of being mission-driven and very clear on that, it was already a part of what we were."
Glenn Schiffbauer, executive director of the Santa Fe Green Chamber of Commerce, has been working with Cook on the bill since it was first introduced. "It's kind of my holy grail," he says. "I'm not a paid lobbyist by anybody. I just want to see it done. It's good for my membership." Green Chamber members, he says, "generally embrace the triple bottom line—people, planet, profit—so this really allows them to bake it into their structure and their corporate mission."
Wanna Be a B-Corp?
Santa Fe Innovates public conversation
5:30-7 pm, Tuesday, Feb. 25
The Alley, DeVargas Center