Capital Markets Embrace a Novel Corporate Form

In 2013, Delaware passed legislation adopting a new corporate form, the public benefit corporation (PBC), with a view to allowing directors of for-profit corporations to take actions not just in pursuit of stockholder returns, but also with the “[intent] to produce a public benefit or benefits and to operate in a responsible and sustainable manner.” Over the past few years, thousands of social ventures, as well as more traditional companies, have incorporated as PBCs, with PBCs reportedly having raised $2.5 billion from 2013 to 2019. This is in part due to decisions made by the non-profit B Lab, which required that Delaware corporations paying for the license to use its “B Corporation” mark adopt the PBC or other benefit corporation form to maintain their status. It is also due to a rise in “impact” investing in the private markets and an emphasis by prominent institutional investors such as BlackRock on sustainable, long-term investment and growth and environmental, social and governance (ESG) factors. During that time, however, only one PBC went public and listed on a national securities exchange.

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