State legislation allowing the establishment of benefit corporations—for-profit companies with a stated public purpose—has become widespread over the past decade. This increasingly available corporate form provides a mandate, and a safe harbor, for corporate leaders to pursue societal good along with shareholder profits. Directors are required to consider the impact of their decisions not only on the company’s shareholders, but on the entity’s larger social purpose. Investors who wish to support a company’s mission can be confident that it is an integral part of the company’s purpose and a consistent goal of its governance.

The popularity of these legislative efforts reflects the current cultural momentum behind the idea that corporations should be engines of good as well as profit. As BlackRock CEO Larry Fink wrote in his 2019 letter to the chief executives of companies in which BlackRock invests: “[S]ociety is increasingly looking to companies, both public and private, to address pressing social issues. These issues range from protecting the environment to retirement to gender and racial inequality, among others. Fueled in part by social media, public pressures on corporations build faster and reach further than ever before.”