A bill that would incentivize for-profit companies to consider charitable, social or environmental causes died in the House Judiciary Committee.
Public benefit corporations, or PBCs, are for-profit businesses that use their income for causes the owners are passionate about. For example, the clothing brand Patagonia has long been known for its efforts to preserve outdoors spaces.
Dozens of states have such designations for companies to opt-in to. Sioux Falls Democrat Eric Muckey said he’d hope South Dakotans can see the value of this designation.
“It’s really focused on defining a clear social and societal impact — similar to how you’d actually approach a non-profit in terms of defining the impact of your charter," Muckey said. "It’s really, truly about what that group of owners in a business want to pursue as far as social impact goes.
In practice that could mean any number of causes ownership is passionate about.
For opposing lobbyist TJ Nelson though, who represents FGA Action, this symbolizes an effort to create programs he and his partners find politically inconvenient, and nothing more.
“The woke alphabet of ESG and DEI are dying and they’re being rolled back," Nelson said. "So why would South Dakota want to create an ESG corporate structure? It just doesn’t make sense.”
However, Muckey said this kind of argumentation in the Capitol is reductive at best and disingenuous at worst.
“It’s fairly juvenile in my opinion to discuss that as part of a proposal that was actually bipartisan to pursue, providing a new corporate form," Muckey said. "I’m not surprised by that, but at the same time I think it’s important for South Dakotans to understand if we’re truly open for business, and we also decide if we want to pursue the impact and betterment of others, this is just another format that is optional. It’s a choice.”
The proposal was co-sponsored by Sen. Glen Vilhauer, a Republican who works as a certified public accountant when not in Pierre.
Ultimately, lawmakers who voted against it Wednesday said they didn’t reject it because of a so-called woke agenda. Rather, they felt charitable businesses didn’t need further incentivization.