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Policy Points: 3 Policies You Should Support to Make the Economy More Sustainable

Voluntary corporate sustainability initiatives and social enterprises are essential, but are not game changers by themselves. In addition, we need laws and regulations that guide our economy toward sound, long-term decision-making, with full recognition of social and environmental externalities. As business leaders, we can and must support policy change to help make the economy more sustainable. Here are three important policies to consider supporting – and specific actions you can take.

To B or not to B (a Benefit Corporation)

While most companies focus on putting profits first - in some cases, even being required by law to do so - Benefit Corporations are required to create benefits for society as well as shareholders. This can include volunteering in the community or contributing to sustainable development.

Benefit Corporation legislation has passed in more than a dozen states and is currently being considered in several more. The legislation allows corporations to put their social mission right into their corporate structure. Instead of being registered as a C Corp or LLC, companies can register as Benefit Corporations, giving them the freedom to consider the social and environmental impact of their activities in addition to the financial bottom line. It costs states nothing and is totally voluntary for companies.

What’s at stake

Benefit Corporations can benchmark their performance and determine ways to improve. Benefit Corporation legislation must first be enacted in each state in order for a company to apply for this legal status.

Another option, for companies that choose not to go through the process of changing their corporate structure, is to receive formal "B-Corps" certification through B-Lab. The environmental and social benefits of certification can be extraordinary. Seventh Generation, a certified B-Corp, cut its greenhouse gas emissions by 8 percent between 2010 and 2011, and saved enough energy to heat 1,700 homes for a year. The company also donates 10 percent of its profits to charity and gives employees paid time off to volunteer.

According to B Lab, 763 B Corps exist in 27 countries and across 60 industries.

What you can do

  • Find ways to push this important legislation in key states.
  • Research more ways to plug in and engage.
  • Learn more about Benefit corporations and B-Corps by watching a recent webinar.

Corporate power is bad for business

Few businesses can afford to contribute significant sums of money in the political process. But as elections become more expensive, the voices of those who make smaller contributions are drowned out. And it’s not just elections; the promise of political contributions can sway business policy decisions. In a recent poll of small business owners, over 60 percent said that unlimited spending power in elections is bad for small business.

What’s at stake

Large companies contributing the most in election campaigns are able to influence a wide range of policies and advance their positions. Through the influence of unlimited and hidden campaign contributions, research is showing that these contributors are:
  • More likely to defend the industries of the past than the industries innovating for the future like moving from toxic chemicals to safer chemicals and products.
  • Committed to old energy sources rather than making America a leader in clean and renewable energy.
  • Are often companies that are utilizing overseas tax havens and not contributing their fair share of taxes to the economy.
In December, the Securities and Exchange Commission (SEC) announced that it would consider a proposed rule to require that public companies provide disclosure to shareholders about the use of corporate resources for political activities. A bipartisan committee of leading law professors filed a petition requesting this rulemaking in 2011. They believe that the SEC has a responsibility to protect investors by regulating the securities markets to ensure that they have the information they need to make investment decisions.

As of May 1, a record-breaking 500,000 investors and members of the public have submitted comments supporting such a rule, demonstrating the importance of this issue.

What you can do

How green should chemicals be?

The Toxic Substances Control Act (TSCA) has not been updated since it was passed in 1976, and under current law, the EPA has very little power to test chemicals or remove them from the market. Some of these chemicals could be dangerous, causing health issues for employees and customers and harming consumer confidence in business. An ASBC poll found that three-quarters of small business owners support stronger regulation of chemicals used in everyday products.

What’s at stake

The Chemical Safety Improvement Act of 2013 is a bipartisan bill, moving in the right direction. Introduced by the late Sen. Frank Lautenberg (D-NJ) and Sen. David Vitter (R-LA), the bill would modernize TSCA by giving the Environmental Protection Agency (EPA) more power to evaluate chemicals for safety and pull dangerous chemicals off the market.

But the current bill does not go far enough. For example, it omits language in a previous version that provided incentives for innovation and research into green chemistry. Those elements need to be put back into the final version of the bill.

What you can do

[image credit: Chris: Flickr cc]
American Sustainable Business Council headshotAmerican Sustainable Business Council

The <a href="http://asbcouncil.org">American Sustainable Business Council (ASBC)</a> is a network of companies and business associations. Its column, Policy Points, identifies public policies where a business voice, grounded in principles of innovation, fairness and environmental stewardship, can make an essential difference in the advocacy process. The goal is to arm readers with information and specific actions to take. As business leaders, we can and must support policy change to help make the economy more green and sustainable. The column editor is Richard Eidlin, ASBC's Vice President - Public Policy and Business Engagement.

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