Page 110 - Social Enterprise A New Business Paradigm for Thailand

Corporations (PBCs), are incorporated, the law contains several key differences from those in
other states. Delaware law requires PBCs to operate in a responsible and sustainable manner and

to clearly define the specific public benefit they aim to pursue. PBCs are obligated to report their
social performance only to shareholders, and there is no legal requirement to disclose such
reports to the public. Furthermore, although the law outlines the need for performance metrics,
it does not mandate the use of third-party certification standards. As a result, Delaware’s
standards for transparency and accountability are considered less stringent compared to those in
other states. Nonetheless, some companies voluntarily choose to meet or exceed those minimum
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legal standards.
Currently, 36 states and Washington, D.C. have enacted laws recognizing the registration of

Benefit Corporations. The emergence of this legal structure in the United States has inspired
similar legislative frameworks in other countries such as Italy, France, Colombia, and Canada. For
instance, in Italy, after the enactment of Benefit Corporation legislation in 2018, the number of
registered companies surged to 2,626 by 2022, a staggering 839% increase within just four years.
Similarly, in France, after passing its own law in 2019, the number of Benefit Corporations grew
from 17 companies with approximately 18,000 employees in the first year to over 1,000
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companies employing roughly 666,000 people by 2022.
Registering as a Benefit Corporation enhances a company’s public image by signaling strong

corporate governance and social responsibility. It allows the public to distinguish Benefit
Corporations from traditional for-profit businesses and helps attract socially-conscious investors
and consumers who are increasingly attuned to social and environmental issues. In 2023, the
state of Oregon passed legislation allowing government agencies to enter into procurement
contracts with Benefit Corporations, provided their goods or services are priced no more than 5%
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higher than those offered by other companies. However, Benefit Corporations do not receive
any tax exemptions or fiscal incentives, as they remain for-profit entities. A well-known example
of a Benefit Corporation is Patagonia, the globally recognized outdoor apparel and gear company,
which has publicly committed to donating 1% of its annual sales revenue to charitable causes (see

Box 3.2).

65 Holly Ensign-Barstow, The Rise of benefit corporations, op. cit.
66 IESE Business School, University of Navarra, Benefit corporations are growing in popularity, Source:
https://www.iese.edu/insight/ articles/benefit-corporations-profitability-impact/, July 28, 2024.
67 Unit of Impact, Oregon Promotes Business with Benefit Corporations, Source: https://unitofimpact.com/oregon-
promotes-business-with-benefit-corporations/, August 17, 2023.
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