The time has come for a legislative movement for BIC companies in Latin America

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Maria Fernanda Mierez

Beccar Varela, Buenos Aires



Sistema B was founded in 2012 as the Latin American sister to the B Corp movement, which offers private certification by the nonprofit B Lab and which was originally founded in the United States in 2007.

B Corp certification can be given to companies ranging from startups to large corporations. To get certified, a company must go through a rigorous process that requires it to have a clear social and/or environmental mission, as well as ensuring it meets standards of social and environmental performance, accountability and transparency. This process can be completed by any organisation through a free online assessment.

In Latin America, the founders of Sistema B realised that the planet required a new framework for doing business, so they launched an inclusive movement from within Latin America, with the capacity and appeal to grow organically.

Later, in 2015, a group of lawyers within Sistema B founded the Latin American Impact Network or ‘RELAI’ (from its Spanish definition, Red Latinoamericana de Abogados de Impacto), which reviewed corporate legislation within every Latin American country in order to confer B Corp recognition within their own legal systems. The main purpose of this exercise was to differentiate B Corp certifications that companies could obtain under voluntary processes from the legal vehicles that could exist in each country once the B Corp legislation was approved. The existence of B Corp legislation implies that companies do not need to rely on voluntary certification proceedings in order to adopt this framework.

Among B Corp advocacy groups, Latin America is arguably one of the most dynamic regions when it comes to debating and promoting B Corp legislation and the concept of the company as having a higher social and environmental purpose.

The first thing the RELAI lawyers settled upon was that ‘Sociedades de Beneficio e Interés Colectivo’ (Benefit and Collective Interest Companies, or ‘BIC’) was the best terminology to use to describe these kinds of entities across Latin America.

Spontaneity, openness and cooperation among the RELAI lawyers facilitated the spread of this legislative movement for BIC companies throughout the region.

In most countries, the BIC company legislative model does not create a new form of business entity or corporation but instead applies B Corp status more as a ‘condition’ or legal category of business. Such categorisation is independent of the existing corporate legal structures within individual nations.

The proposed Latin America BIC acts include three main elements: (1) purpose/positive impact; (2) fiduciary duties of the directors to stakeholders; and (3) transparency.

For strategic reasons, none of the proposed bills provide tax benefits for BIC companies. At this early stage, the movement’s main aim is for each country to recognise the new corporate model and that incentives and/or benefits will appear in time.

Since this legislative movement began in 2015, two countries (Colombia and Ecuador) have enacted BIC acts and four countries (Argentina, Chile, Peru and Uruguay) have put forward bills to their respective governments. In the case of Colombia, the rules were laid down by Decree 2046 of 2019. In the case of Ecuador, the proposed BIC act was approved in 2019 by the Resolution of the Superintendency of Corporations No 21.

The business and human rights (BHR) movement shares many goals with the BIC legislative movement: corporate respect for human rights; addressing the negative impacts of companies on people and communities; and creating rigorous standards of conduct and means of accountability. The BHR movement can look to BIC companies for concrete examples of responsible companies that value human rights intrinsically. In fact, the B Impact Assessment recently adopted the UN Sustainable Development Goals (SDG) or ‘SDG Action Manager’ as part of the B Corp evaluation process and is in the process of adopting BHR standards.

Latin America, in common with many other areas of the world, is experiencing an unprecedented economic and public health crisis. The Covid-19 pandemic has forced Latin America to reevaluate its priorities as its people witness ever-deepening social and economic problems. BIC companies can serve as vehicles to address and provide solutions to these challenges.

Today more than ever legislatures must recognise and reward companies who exhibit higher levels of corporate responsibility for the betterment of our economy, our people and the planet.

We as lawyers have an essential role to play here. It is not just a matter for governments, business and civil society, but instead requires our involvement and creativity to help find solutions to our gravest challenges. The time has come to become agents of change, using our influence and knowledge to greatest effect. The B Corp and BIC act movements represent an important method towards accomplishing that goal. Our time has come!

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