Maryland First State in the Union to create Benefit Corporation Legislation

Maryland Governor Martin O’Malley signed into law the nation’s first legislation creating Benefit Corporations, a new class of corporations required to create benefit for society as well as shareholders.

Unlike traditional corporations, Benefit Corporations must by law create a material positive impact on society; consider how decisions affect employees, community and the environment; and publicly report their social and environmental performance using established third-party standards.

The legislation, sponsored by Senators Jamie Raskin and Brian Frosh and Delegate Brian Feldman, passed the Maryland Senate with a vote of 44 – 0 and the Assembly 135 – 5.

“Milton Friedman would have loved this,” said Andrew Kassoy, co-founder of B Lab, the non-profit that drafted the model legislation with William H. Clark, Jr., partner in the Corporate & Securities Practice Group of Drinker Biddle and Reath.   “For the first time, we have a market-based solution supporting investors and entrepreneurs who want to make money and make a difference,” Kassoy added.

The new law addresses a long time concern among entrepreneurs who need to raise growth capital but fear losing control of the social or environmental mission of their business. These entrepreneurs and other shareholders of Benefit Corporations now have additional rights to hold directors accountable for failure to create a material positive impact on society or to consider the impact of decisions on employees, community, and the environment.

From a company’s point of view, the new law empowers directors of Benefit Corporations to consider employees, community and the environment in addition to shareholder value when they make operating and liquidity decisions. And, it offers them legal protection for those considerations.

“Today marks an inflection point in the evolution of capitalism,” said B Lab co-founder Jay Coen Gilbert.  ”With public trust in business at an all-time low, this represents the first systemic response to the underlying problems that created the financial crisis — protecting companies from the pressures of short-termism while creating benefit for shareholders and society over the long-haul.”

“This is a great moment in the evolution of commercial life in Maryland and America,” said Senator Raskin.  ”We are giving companies a way to do good and do well at the same time.  The benefit corporations will tie public and private purposes together.”

Maryland is the first state to pass Benefit Corporation legislation, but others are quickly following Maryland’s lead.  Vermont Bill S.263, co-sponsored by Senators Hinda Miller and Peter Shumlin, has already passed the Senate and will be considered by the Vermont Assembly over the next 30 days.  Other states considering the legislation include Colorado, New York, North Carolina, Oregon, Pennsylvania, and Washington.

It’s easy to overlook the amazing strides taken by businessmen like Ray Anderson who brings their souls to work and in this video Ray explores his path to understanding, action, success and serving people, the planet and the business world. Ray is the kind of man dedicating his life to redefining the petroleum “take, make, waste business model as a renewable, waste free and benign activity that will heal and restore life. And this is not just talk. Over the past 12 years since committing to this transformation, Ray’s company, Interface, has reduced greenhouse emissions by 82%, sales up 62% and earnings up 100%, fossil fuel use down 60% thanks to renewables, water usage down 75%, and taken 74,000 tons of carpets out of landfills by closing the manufacturing loop and sold 85 million yards of climate neutral carpet. Their new direct to consumer carpet tiles can be seen at flor.com.

All proving its possible to do well by doing good and not a threat to profits but a contributor. And his sustainable business model helps attract the best and brightest who want to work and remain working with a company that integrates ethics, economics and ecology.

NPD will continue to monitor Ray’s Mission Zero (zero waste and pollution by 2020) in the coming days, months and years.

This may not seem like the best time to start a bank but, in fact, it’s an ideal time now that most banks are preoccupied. The NY Times recently reported that Alan Greenspan said, “If I were 50 years younger, I would start a bank.”

A few days ago, I watched an online investor presentation for E3 Bank; a new Pennsylvania startup that I believe will set the new socially responsible standard in banking.

The presentation began with The Evolution of the Earth that provided a context for life and business. The idea that we might need 11,000 coal fired power plants based on a projected 62% increase in energy demands over the next 20+ years is clearly unsustainable.

The great modern myth is that “we know what we’re doing and we are in control.” Dubai is a great example-getting bigger and better all the time with quality of life not really a consideration.

The real question is “do we know what we want?” And yes, we do know we want: clean air, water and soil and abundance. How we get there will be the responsibility of each of us in our personal and business lives.

E3 Bank is a new paradigm model of what banking must become if it is to serve people and the planet. If banks do not become triple bottom line oriented, they will lose business to those banks like E3 that are.

We are at a moment in history of incredible danger and extraordinary opportunity. Some view this time as one in which scarcity (scare city), abstinence and giving up things will reign. E3 sees things differently. They believe a future of prosperity lies before us and are dedicated to reframing a future of limits to one of unlimited possibility.

As evidence of this movement, they point to the geometric growth curve for green building and the $104 billion market for green products and services.

In the financial services sector, E3 sees an opportunity to lead the way through their
sustainability expertise and new methods of financing high efficiency buildings and other green business projects. The current banking crisis stemmed from one overriding strategy-make as much money as possible without regard to the consequences to people and the planet. E3 Bank’s mission is driven by a triple bottom line strategy (enterprise through sound investment in people and planet, protect the environment which supports life and the economy and equity in sustainable businesses).

Potential customers in Pennsylvania have indicated a willingness to switch banks operating ethically and with sound environmental principles. Out of 140,000 business people surveyed by the bank, 28,000 were likely to open accounts with E3 and out of 3.2 million households, one million were likely or highly likely to bank with E3.

Some of the innovative initiatives E3 will launch as part of their September 09 Grand Opening include:

Minimizing the Bank’s Real Estate Footprint
In the past banks were built to be large impressive buildings that offered clients the appearance of safety and soundness. As we have all learned, appearances may be deceiving. Banks also operated from top down. E3 will operate and incentivize customers to switch to their bank by providing innovative banking products and services. They realize that the greenest bank building is no building and so their vision is to provide best in class and first of kind business and personal banking solutions by turning each customer into a branch. In other words, all their services will be provided via users computers.

Check Writing
The old method of check writing involved customers writing checks and then having those checks transported back and forth between banks. By offering scanning of checks in the home or business, those transportation costs are eliminated thus reducing operating costs. The typical teller cost per transaction is $2.50 while E3’s remote deposits cost the bank less than one cent, further reducing costs.

When a bank customer spends money, their habits will be tracked with their permission into categories and the bank will make suggestions on reducing energy or other applicable issues that show up in excess spending.

Tiered Rates
E3 will offer tiered interest rates depending on your choice of the most environmentally efficient building standard. The higher the rating, the lower the interest rate. This makes the banks loan assets better risks than most bank portfolios. A new building with 30% higher efficiency provides 30% less operating expenses and becomes less susceptible to unexpected rate increases. The buildings lease faster with higher demand and rents while being seen as less risky by the regulating agencies.

Green Assist
E3 will provide value added resources to their customers like their Green Assist program that eliminates the confusion and frustration of figuring out how to pay for solar panels, find grants or local programs, etc. Instead, E3 will offer one stop shopping by providing financing, a list of qualified installers and filling out the paperwork to obtain applicable. rebates-a win-win proposition for the bank, the customer and the suppliers.

The press has jumped on the E3 story with coverage on CNN, Hufington Post, American Banker and Business Journal among others. They like the banks position as a thought leader dedicated to shifting to a new kind of banking based on true prosperity-living, working and playing more sustainability and transparently letting the world know how they are doing in all three areas. In many stock offerings, the small investor is normally left out. As a socially responsible bank, small investors are included with the smallest units being offered at $5000 rather than the usual $50,000. In order to allow more investors into the offering, the bank is also limiting its maximum investment to 9.9% of its $30 million total offering.

I don’t know about you, but this is the kind of bank I want to do business with. I’ll begin banking with E3 the day they open for business,

To learn more about the bank or their offering, visit the E3 website and if you are interested in investing, you can register for a future investor call at their site as well as apply to open an account in the future.

From Enlighten Next

While greed and money have driven many business decisions for decades, there is another under reported business story, one that has a very positive tone. This may be one of the most compelling and comprehensive articles of its kind and it appeared in a spiritual magazine which tells us something about the nature of the transformative change taking place within the business world. Spirit, often excluded from business, has entered the domain and is having positive results multidimensionally. If you are interested in the transformation of the largest institution on the planet, this is a must read article.

Big business has changed the world. The global growth of corporate culture has brought with it the spread of democratic systems, increased wealth and education, and diversified local economies. But it has also created extreme degrees of exploitation, greed, and environmental destruction. What if these potent forms of human organization and ingenuity contain the seeds of profound and positive social change? We believe some do. Driven by an interest in the spiritual—as well as material—welfare of human society, some forward-thinking agents of change are infusing their organizations with ethical principles, social responsibility, and a sincere interest in unleashing the creative potential of their employees and the societies they live in. (See listings below.)

I’ve posted a previous piece on HUB (Humanity Unites Brilliance) which continues to grow and positively impact families in Africa and the US. This video was shot during a recent HUB gathering and communicates the great energy and enthusiasm for the project.

NPD is a Founding Member of HUB and, should you decide to join, will benefit from your participation. To learn more about joining the HUB community click here, or e-mail me at jefhut (at) gmail (dot) com with any questions.

And here is a recent piece by HUB member and web consultant, Wayne Marshall, that recaps a recent HUB live event and further explores the impact HUB is having on more and more members and the world.
Friends,

I was fortunate to attend the recent HUB Actioning Your Brilliance conference in Long Beach and I know many wanted to attend but could not make it.

As words are inadequate to describe our experience, here is a more poetic expression that may offer you a taste of what was real for us. These are roughly in the order of sessions but not exactly. Feel free to pass this along to anyone you think would be interested. (Thanks to Sarah Uma Kane for the Jean Houston reflection)

We have been called out by master teacher and Social Artist Jean Houston to be the “Evokoters” – the mid-wives of the soul. More than just another “how to” session, we learned evolutionary practices for creating a world that works for everyone. Through archetypal embodiment, we were invited to be a part of the story and recognize the characters as ourselves. We scored our own music, dancing the dream awake, meeting our Inteleky (higher self) and allowing our brilliance to be received from it’s reflection. Moving away of linear left brain into creative right brain expression, we used the language of Glasarania (Gibberish) to awaken our creativity and become the Sacred Actor and Holy Fool, discovering a whole new way of communicating and creating. Continue Reading »