Tax Exempt Status for Businesses With A Triple Bottom Line

At the conference last week in Burlington, VT, for the Business Alliance for Local Living Economies, there was much talk about companies with a Triple Bottom Line. Profits, yes, but also people and planet.

I wonder: what would it mean for our planet if businesses truly had a legally enforceable Triple Bottom Line? What if businesses were legally required, or agreed, to internalize all the costs that many now externalize? What if manufacturers incorporated the true life-cycle costs of their products (production and waste) as part of their business expenses? What if businesses valued their employees as much as they now do their shareholders?

Is it possible?

While it's unlikely -- at the moment, at least ;-) -- that government would legally require businesses to adopt a Triple Bottom Line, there is no legal reason why a business could not voluntarily create such a legally binding commitment in its articles of incorporation and bylaws.

And what should society do for a corporation that puts people and planet on a par with profits? Given the tremendous saving that accrues to society from a business that internalizes its environmental and societal costs, I'd say the business should be given a whopping tax benefit including, at least, tax exempt (or extremely reduced) status for profits, distributions and employee incomes.

To quote Gary Snyder: "We are defending our own space, and we are trying to protect the commons. More than the logic of self-interest inspires this: a true and selfless love of the land is the source of the undaunted spirit of my neighbours."

Comments

[Jamie]

Does anyone know of any countries that do require that companies internalize all externalities? Such legislation would be impossible to enforce completely (given uncertainties and inability to quanitfy all external costs), but it would be interesting to see how it's worked out.

As for the idea that companies voluntarily acknowledge the "Triple Bottom Line", I think we've definitely seen a move in that direction in recent years. Sometimes this acknowledgement has only come when environmental problems have hit the conventional "bottom line" first, but there are certainly some companies out there (take Seventh Generation for instance - I've become a recent fiend of their blog www.InspredProtagonist.com) that get it, and are truly integrating a multi-generational "shadow of the future" into their business model.

[Stephen Filler]

Jamie,

Thanks for posting. I'm not aware of any countries that do require it.

As you point out, it would be a difficult task to define what counts as an externality, and then to define what it means to internalize it. And what is considered an externality changes over time -- twenty years ago, hardly anyone would have considered CO2 emissions a externality because no one recognized that CO2 emissions were causing global warming.

But just because there may be difficult definitional issues doesn't mean that governments cannot benefit businesses, through tax incentives or otherwise, that undertake business methods that reduce negative externalities.