The thirst for victory. The fear of defeat.
Ever since Adam Smith's "Wealth of Nations" bobbed across the Atlantic, Americans' zeal for competition has increasingly pushed the private sector to cut costs, boost revenue and make business decisions based on the bottom line - all in the name of shareholder return on investment. It's capitalism in its purest form.
But there's a movement afoot to slide another metric into the balance sheet - one that its backers argue is as important as net income.
A relatively new class of businesses called benefit corporations seeks to make money while solving social problems. They are for-profit companies that - unlike nonprofits - do not get tax benefits from the government. Sportswear retailer Patagonia is among the largest companies to become a benefit corporation.
Critics say the new model is a marketing ploy that has opened the door to "greenwashing," which happens when a company convinces consumers that it's more socially conscious than it actually is.
Thirty-two Virginia companies, including five in Hampton Roads, have incorporated as benefit corporations since the General Assembly authorized them in the state in 2011, according to state records. Only recently has momentum picked up in Hampton Roads.
The Norfolk Fair Trade Co. in the downtown Selden Arcade became a benefit corporation early this year. Its mission is threefold: spread knowledge to young entrepreneurs so they can start their own businesses; sell fair-trade products and locally produced goods made by entrepreneurs who are trying to get a start in retailing; and make a profit.
Lisa Fournier, 46, is the founder of the company. She said she has been an entrepreneur since she was 19 and spent years helping emerging companies leap from idea to product.
She's passionate and upbeat. And she talks fast.
During recent visits to her shop on East City Hall Avenue, Fournier discussed a book she wrote on benefit corporations and her efforts to evangelize about them as often as she can.
After a recent presentation, "people kept going, 'But what about the shareholders? Who is running the board?' " Fournier said. "I felt like, hmm, I wonder if they almost feel like this is something against capitalism. And I thought, 'That's ridiculous.' I'm a free-market person. I believe in making money. Why wouldn't you? But I know where my heart is."
Virginia was the fourth state to pass legislation creating the new class of corporations. The bill was authored by Del. Jennifer McClellan, D-Richmond, passed unanimously in the House and Senate and signed into law by Gov. Bob McDonnell in March 2011.
Back in 2010, the Wayne, Pa.-based nonprofit B Lab pushed hard to get state lawmakers to create a classification for benefit corporations. State by state, B Lab sought out sponsors for legislation it had drafted. Maryland was the first to pass the bill, in April 2010.
Since then, 20 states have adopted laws similar to B Lab's sample legislation, said Katie Kerr, director of public relations for the nonprofit.
"It's about redefining what success is," she said. "Real, true long-term success is long-term benefit for everyone."
B Lab privately certifies corporations that are deemed to affect society and the environment positively - similar to the U.S. Green Building Council's LEED certification for environmentally friendly construction projects. Once the corporations are certified, B Lab calls them "B corps."
The government is not involved in B Lab's certification of B corps. Nor does it review the annual reports that benefit corporations are required to produce and post for public review. In the annual reports, companies are supposed to evaluate their performance using third-party standards, though those standards are not specifically defined.
Shareholders, directors, investors and stakeholders hold benefit corporations accountable, Kerr said. In other words, they police themselves.
B Lab said state laws authorizing benefit corporations help protect companies that don't maximize profits from lawsuits by disgruntled shareholders.
Without this protection, B Lab says, companies could be found liable for, say, paying more to dispose of waste in an environmentally friendly fashion or buying more expensive American-made materials instead of cutting costs by shopping overseas.
Others, however, say legal protection isn't necessary because for-profit companies, such as Newman's Own, Panera Bread and others, have pushed socially responsible agendas for years without backlash from investors - and without benefit corporation status.
Victoria Bjorklund, an attorney with Simpson Thacher & Bartlett LLP in New York City, said benefit corporations blur the line between for-profit and nonprofit and are ripe for abuse.
"It's dangerous for the consumer who doesn't understand the difference," said Bjorklund, who teaches at Harvard Law School and has represented nonprofits in private practice for 31 years.
"In the world of business, there are too many people out there eager to make a fast buck for themselves," she said. "They will take advantage of any structure," and, she noted, the government does not regulate benefit corporations.
To boil it down, consumers will ultimately be responsible for making sure a benefit corporation follows through with its plans to make the world a better place.
There's an inherent amount of faith that must be put in people to carry out their plans for social and environmental good - and Fournier has it. She has helped three of Hampton Roads' benefit corporations start this year.
Martin Buoncristiani met with Fournier before founding Green Planet Fundraising out of his Chesapeake home. He's the only employee, but he has big plans.
His corporation's mission is to get big businesses that want to project themselves as environmentally friendly to sponsor trees in bulk. He also plans to get charities and other small organizations to sponsor trees for fundraisers.
"I think we're going to tap into a general angst that people have that the world is going to hell in a hand basket and nobody is doing anything about it," Buoncristiani said. "We're Americans. It's in our nature. We see something wrong, we want to do something about it."
Part of the money he earns from tree sales would go toward protecting the Chesapeake Bay, and some of the funds would benefit the charities that use his trees in their fundraisers, he said.
Buoncristiani plans to plant a majority of the trees where they can intercept fertilizers and other chemicals that wash into the bay.
He has tried to persuade preservation foundations to help him identify ideal locations for the trees, but he has had little response. The Nansemond River Preservation Alliance is the only group that's agreed to meet with him.
"I suspect it's probably because what I'm doing is so sort of counterintuitive" he said. "We're so culturally capitalistic in this country that if you are a business, they expect that your main purpose in life is to make a profit and get rich."
But that doesn't stop him from dreaming. Buoncristiani envisions Green Planet Fundraising as a force to bring disparate and disorganized environmental causes together.
He officially launched his company at this weekend's Bay Days in Hampton. He plans to plant his first trees in the spring.
Fournier said most of her proteges either had a life-changing event and see the world differently - Fournier left corporate America to become the primary caretaker of her ailing parents - or they're looking for an alternative to what is often a frenetic pace in more traditional business startups.
"I could have taken my money and invested in Wall Street," she said. "But I didn't want to.... I am absolutely looking for a multiplier effect on the social side, with people, as well as the financial side."
Sarah Kleiner Varble,
757-446-2318,
sarah.varble@pilotonline.com
Thirty-two companies, including five in Hampton Roads, have incorporated as benefit corporations since the General Assembly authorized them in the state in 2011.