FGV´s Sao Paulo Law School researcher participates in Economy Ministry advisory committee on high-impact businesses
Aline Gonçalves de Souza, a researcher at the FGV´s Sao Paulo Law School’s Center for Applied Legal Research, is leading one of the initiatives overseen by the federal government’s Advisory Committee on Investments and High-Impact Businesses, as part of the National Strategy on Investments and High-Impact Businesses. This strategy has an executive secretary who reports to the Economy Ministry. Its advisory committee was established by Decree 9,244 of 2017, it was reestablished by Decree 9,977 of 2019, and it is set to run for eight years. The latter decree defines high-impact businesses as “enterprises with the aim of generating social and environmental impacts and positive financial results in a sustainable way.”
Souza is a member of the advisory committee’s Working Group 4, which is examining how to make the institutional macroenvironment and rules favorable to investments and high-impact businesses. This working group is led by Sistema B, an organization that is part of a global movement aiming to construct a favorable ecosystem to strengthen companies that are using the power of markets to solve social and environmental problems. Souza’s role on the committee is to lead studies, debates and recommendations related to the interface between high-impact businesses and civil society organizations.
In the last week of January 2020, the researcher participated in several meetings in Brasilia. On January 28, a seminar titled “Promoting a Regulatory Environment Conducive to Investments and High-Impact Businesses” was held, and the speakers included Dr. William H. Clark Jr., the author of a “Model Benefit Corporations Law” in the United States. The debaters explored the legal risks caused by a lack of legal provisions, as well as the different concepts of benefit corporations, B corporations and high-impact businesses. They also presented proposals to classify different types of benefit corporations.
The advisory committee held its first meeting on January 29. It approved a proposal for the Economy Ministry to examine a draft bill designed to classify benefit corporations. This draft bill is succinct and based on three pillars that were presented by Working Group 4’s leaders. The idea is that companies wanting to be classified as benefit corporations will have to include the following in their articles of incorporation: (a) the objective of generating positive social and environmental impacts as part of their corporate purpose; (b) governance instruments to support decisions to promote social and environmental impacts in the short and long term, while engaging stakeholders; and (c) a commitment to transparency, by measuring impacts, publishing them and producing reports about them as part of their accounts.
Souza began her studies about this topic in 2015, when she published a book titled “Social Enterprises: A Corporate Approach” and joined Sistema B’s Legal Group. Sistema B is leading Working Group 4 through Marcel Fukayama, the organization’s international director, and Rachel Karam, the coordinator of its Legal Group.