Who they are, how they arise, prospects and opportunities. Italy's leading role and the activism of young people, (true) protagonists of the Impact Revolution .
Since 2016 [1] To date, there are over two thousand companies active in the most diverse sectors of our economy that have been created or have become Benefit Corporations. Start-ups, SMEs and large corporations that want to generate a positive and lasting impact on society.
BENEFIT CORPORATIONS BETWEEN PROFIT AND IMPACT
Profit or non-profit: which side are SBs on? According to Italian law, SBs “ in addition to the purpose of dividing profits, pursue one or more common benefit purposes and operate in a responsible, sustainable and transparent manner towards people, communities, territories and the environment”. An innovative model, which goes beyond the traditional profit-non-profit dichotomy and integrates an element of additionality . As a recent study by Pwc [2] underlines, “it is not just a matter of being responsible for the externalities generated, which [SBs] consider substantially mandatory, but of assuming a common benefit purpose that defines the orientation of all business activity”.
FROM DEFINITION TO ACTION
Whether they are joint-stock companies, individuals or cooperatives, SBs must meet certain requirements: identify the purposes of common benefit (impact objectives) and include them in their articles of association or statute ; ensure the balance, in corporate management, of the interests of members with those of other stakeholders; identify a responsible person within the company who is responsible for monitoring the pursuit of the defined impact objectives; produce an annual report (Impact Report) which, through external evaluation standards - such as the B Impact Assessment - evaluates the results achieved with respect to the declared impact objectives.
WALK THE TALK OR… TROUBLE!
SBs that do not pursue the objectives set out in the corporate purpose may be sanctioned for violation of the regulations on misleading advertising (Legislative Decree 145/2007) and the Consumer Code (Legislative Decree no. 206/2005) by the Competition and Market Authority , which has the power to prohibit the continuation of the activity, order the publication of corrective statements at the company's expense and prescribe pecuniary sanctions from 5 to 500,000 euros. It goes without saying that if the sanctions are harsh, the reputational damage can be incalculable.
AN ITALIAN RECORD
Among the many records we can boast about, there is also this one: Italy was the first nation in the European Union to give legal dignity to the business model of Benefit Corporations, the movement founded in 2006 in the United States by B-Lab , a non-profit organization that aims to use business as a positive force, to create lasting and shared prosperity for society. This is where the main difference lies: if SBs are a corporate model provided for by the legal system and complementary to traditional business models, B Corps are such because they obtain a certification based on the standard defined by B-Lab. An SB, therefore, does not necessarily have to be a B Corp, vice versa a B Corp is required to assume the qualification of SB within a period of time from its certification, if it is possible in the country in which it is based.
THE IMPACT, A DISTINCTIVE FEATURE OF YOUNG PEOPLE
In the face of global macroeconomic and social tensions and the extreme consequences of climate change, the success of SBs - which doubled during the pandemic period - is understandable. [3] - especially among young people who, as a recent study by Deloitte [4] shows, are particularly sensitive to social and environmental issues. And it is no coincidence that the “benefit purpose” is the key element on which brands are focusing to attract and motivate the young generations, protagonists of what Ronald Chohen defines as the Impact Revolution [5]. A peaceful and gentle revolution “started by young consumers and entrepreneurs who are disrupting prevailing business models with the aim of improving people's lives, reducing inequality and changing the planet for the better. “ The profit-with-purpose model ,” Cohen writes, “ is the hallmark of the millennial generation.”
CONSUMERS' REQUESTS
Taking a concrete position with respect to a market that is increasingly attentive to socio-environmental consequences is right and convenient. As demonstrated by the research by Banca Ifis, "Economy of Beauty" [6], for 58% of Italians, values are 'decisive' in the choice of brands and products, while another 33% consider them 'important', highlighting how social and environmental issues have become relevant. Consumers, in short, "are transforming from simple audiences to critical actors at the centre of the scene who want to interact, converse and judge" .
MARKET EXPECTATIONS
Sustainable companies are popular with consumers and attract the interest of investors : as demonstrated by research carried out by LIUC University in collaboration with IR Top Consulting [7], the priority themes in the evaluation of investments will be increasingly linked to the ability of companies to position themselves solidly with respect to the crucial themes of our time: climate change, circular economy and social issues such as diversity and inclusion.
[1] Benefit Companies were introduced with the 2016 stability law (n.208 of 28 December 2015), paragraphs 376-384 of art. 1.
[2] Benefit corporations: a new business paradigm , Pwc, 2022, p.39
[3] Businesses, there is a boom in benefit companies in the year of Covid-19, Vitaliano d'Angerio and Daniela Russo, Sole 24 Ore, June 29, 2021.
[4] Climate Change: The Number One Challenge for Millennials and GenZ , Nicola Andreatta, Green.it
[5] Ronald Cohen, “Impact. The revolution that is changing capitalism”, LUISS University Press, p. 21.
[6] Banca Ifis, Economy of Beauty, https://www.bancaifis.it/press-releases/in-2021-the-economy-of-beauty-represents-the-24th-of-national-gdp/
[7] ESG Disclosures and Capital Markets: State of the Art and Future Scenarios
