Restrictions in New Zealand’s legal structures are holding back impact-driven business such as many of the Zero Waste projects across the country. Structuring for Impact: Evolving Legal Structures for Business in New Zealand is a new report exploring the issues and possible solutions. For our country to better look after our people and environment, we need innovative ways to achieve social inclusiveness and wellbeing for all New Zealanders. Some businesses, often referred to as social enterprises, have long been working for broader versions of social and environmental capital, and have significant, untapped potential to create transformative change for New Zealand, alongside traditional delivery models for social outcomes.
Impact-driven businesses are different from traditional profit-driven businesses in that they trade to deliver social or environmental impact. They generally reinvest their profits into their mission. New Zealand currently has no legal structure for businesses that exist to deliver positive impact in this way. Ākina Foundation CEO, Louise Aitken, says this means many businesses are restricted by current structures.
“Our legal structures are built around very traditional ideas that you’re either a business like a limited liability company, or you’re a charity.” says Aitken “Social enterprises are telling us that they’re caught in the middle. They exist to create maximum positive social or environmental impact, but our current business structures make it challenging for them to do this” she says. “And more broadly, we’ve found there are multiple barriers preventing businesses from delivering impact, from innovating, scaling and accessing finance.”