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The British Columbia government has created the option of so-called benefit companies that would measure their success through service to the community, not just profits.

Finance Minister Carole James said B.C. has introduced historic and collaborative legislation to become the first province in Canada allowing companies to create a corporate structure that includes giving back.

Businesses would commit to responsible and sustainable practices while promoting public benefits and serving the interests of stakeholders, she said Tuesday.

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A variety of causes could reap the benefits, including those that are charitable, educational, environmental and artistic.

James said benefit companies will help propel B.C.’s economy as the province works to rebuild from the impact of COVID-19.

A private member’s bill introduced in May 2018 by then Green party leader Andrew Weaver led to the legislation that requires businesses that want the designation to specify their public benefit goals in their articles of incorporation.

The legislation stems from the first private member’s bill from an Opposition party to be passed directly into law, said Weaver, who now sits as an independent member of the legislature.

Weaver said benefit companies present an attractive model to consumers, especially millennials, who are increasingly conscious of whether businesses are going beyond the bottom line.

“People make jokes about the avocado toast generation but there’s a very different value set associated with the younger set,” he said, adding consumers are willing to pay a bit more to buy the products and services of companies with social and environmental goals.

Weaver said the legislation is timely in the midst of a pandemic.

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“What COVID is telling us as we move forward is that we’ve got to do things differently. And this is one tool in many that will allow us to do just that.”

The legislation requires the companies to publish an annual benefit report assessing their performance in promoting their stated benefits and compare their progress against an independent, third-party standard, the Finance Ministry said.

They are also required to share the report publicly by making it available at the company’s records office and on their website.

Benefit companies were introduced in the United States in 2010 and are now possible in 35 states, as well as Italy and Colombia, the Finance Ministry said.

Prior to the benefit companies legislation, B.C. was the first province to introduce the so-called community contribution company model in 2013.

While its aim is also to attract socially conscious investors, it has additional rules such as requiring a company to allocate 60 per cent of its profits toward a social purpose, with only the remainder distributed to shareholders, the Finance Ministry said.

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So-called C3 companies are also required to have three directors when they incorporate and direct at least 60 per cent of their value toward a social purpose when they dissolve.

The ministry said that while community contribution companies cannot convert to benefit companies both are for-profit enterprises with a social purpose.

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