Now that California has passed Benefit Corporation legislation, Benefit Corporations and B Corps are all the rage! If you’re trying to keep up with it all, here’s the latest from around the web:
Finally, if you haven’t yet read B Lab co-founder Andrew Kassoy’s post on B Corps and Occupy Wall Street, I highly recommend that you read it here.
Over the weekend, Governor Brown signed two important pieces of legislation that will help to advance socially and environmentally responsible businesses in the state: AB 361 and AB 913.
AB 361: Benefit Corporations
With AB 361, California joins a growing list of states that now recognize Benefit Corporations. The bill was introduced by Assemblymember Jared Huffman and creates a “new, entirely voluntary type of corporate entity to let California businesses balance the pursuit of corporate profits with environmental and social goals.” Under current state law, corporations are required to prioritize profit and financial interests. Benefit corporations are different in that they allow corporations to give equal consideration to social and environmental interests instead of just to financial profit. This is a significant step that gives triple bottom line businesses legal recognition in California.
AB 913: California Green Business Program
AB 913 requires the Depart of Toxic Substances Control to establish a California Green Business Program. Under the Hazardous Waste Source Reduction and Management Review Act of 1989, the Department of Toxic Substances Control (DTSC) is already required to establish a program for hazardous waste reduction. AB 913 requires that, as part of implementing its source reduction program, the DTSC develop:
“A California Green Business Program that provides for the voluntary certification of businesses that adopt environmentally preferable business practices, including but not limited to, increased energy efficiency, reduced greenhouse gas emissions, promotion of water conservation, and reduced waste generation.”
Green and Sustainable Businesses: Onward and Upward!
Taken together, these two pieces of legislation can have a significant impact on businesses that want to incorporate the triple bottom line into their business practices. AB 913 will provide additional resources to the many small businesses in the state that want to go green but may need guidance and support in order to do so. AB 361 will give corporations that are ready to adopt a new corporate form that better reflects their social and environmental mission an option for legally doing so. Both the creation of a statewide Green Business Program and the new Benefit Corporation entity will also help consumers to distinguish between businesses that make green claims versus those that either meet green business certification standards and/or incorporate social and environmental interests into their legal framework. It should also be noted that both Benefit Corporation status and Green Business Certification are entirely voluntary.
One of the organizations that is leading the way in advancing the green economy is the Green Chamber of Commerce. The Green Chamber of Commerce is a growing and diverse business network dedicated to:
As a member of the Green Chamber, I was recently interviewed and invited to share my thoughts about Cultivating Capital, working with women entrepreneurs, and sustainability. The full interview is available on the Green Chamber website and is reposted below.
GCC: Tell me about the founding vision of Cultivating Capital and how the company was started?
CM: The vision for Cultivating Capital emerged while I was getting an MBA in Sustainable Enterprise from Dominican University. I was interested in sustainability consulting and was thinking about working with women business owners. As I did some market research, I came upon compelling statistics about the expected growth in women-owned businesses in the next few years. I realized that if that entrepreneurial activity could be harnessed and steered in a sustainable direction, it could prove to be a critical leverage point for transformation in business. Cultivating Capital was started in order to bring attention to and accelerate that process.
GCC: How did you come to Cultivating Capital and what is your background?
CM: My background is in non-profit and small business management. As Health & Safety Director for the American Red Cross, I managed all First Aid and CPR classes and related programs for the Palo Alto chapter. As the Sustainability & Marketing Manager for Greenerprinter, I developed and implemented the company’s first social media marketing strategy, worked on SEO, and restructured the Adwords account, ensuring that all would coordinate with our overall marketing strategy. On the sustainability side, I handled two certifications for the company, B Corp and the Sustainable Green Printing Partnership. After completing my MBA, I decided to start my own company, Cultivating Capital. At about the same time, I also began working with the Alameda County Green Business Program as a Green Business Consultant and shortly thereafter joined the Board of the Sustainable Business Alliance, where I chair the Marketing Committee.
GCC: What kind of consulting services does Cultivating Capital offer?
CM: Cultivating Capital helps small business owners in the two areas that are shaping business in the 21st century: going green and marketing themselves online. Specifically, an audit of the business can serve as a starting point for evaluating its current sustainability and online marketing practices and then serve as a foundation on which to develop the overall strategy in both of those areas. I also work with business owners in business plan development and overall business strategy.
GCC: Can you describe examples of women’s businesses with whom you have worked and describe how you have helped them develop more sustainable businesses?
CM: Some current projects include working on an online marketing strategy for a firm that helps social enterprises to raise capital; working with a sustainability-minded bookkeeping business on green business certification, marketing and operational improvements; providing business planning and development support for a sustainable business incubator; and developing a business plan for a boutique offering sustainably-produced clothing.
GCC: What advice do you have for others in your industry who are trying to be more green?
CM: I think that consultants and business service professionals can do quite a bit to go green, beyond just using recycled paper or minimizing paper use. Are we using a big business bank for business checking services, or are we putting our money into local banks that are more likely to benefit the local community? Are we constantly driving to meetings, or are we using public transit and virtual meetings to reduce driving? Are we evaluating our own supply chain? For example, purchasing office supplies from a large chain store versus a local, independently owned business makes a difference. These are just some of the things that even service professionals can consider when trying to go green themselves.
GCC: Have you faced any obstacles in the process of trying to be a sustainable business? If so, how did you or how do you continue to overcome them?
CM: I wouldn’t call them obstacles, but I have had to do more research and in some cases pay more money in order to work with companies that share my sustainability values. It took me a while to find the right green-certified insurance agent and locally owned bank to work with. I also wanted to use a locally owned, green web hosting service but for practical purposes, it was easier to use the hosting service that my web designer used. This is one area that I’m hoping to change at some point in the future.
GCC: Can you describe specifically your sustainable business practices?
CM: I’ve tried to make Cultivating Capital a sustainable business in several ways. First, I started my company with the intention of having it become a Certified B Corporation, so I worked with an attorney who was familiar with B Corps. We specified in the LLC operating agreement that due consideration would be given to the company’s effects on stakeholders and the environment, among other things. This ensured that the triple bottom line of “people, planet, and profit” is in the DNA of Cultivating Capital. Second, I chose a LEED-certified workspace (the Hub at the Brower Center; the Brower Center is itself also a Certified Green Business). Finally, I’ve also made it a point to green my own supply chain as much as possible by working with other companies that are either Certified Green Businesses or B Corps (or both), such as the Katovitch Law Group, Avail Insurance Services, and Greenerprinter.
I’m also going through the auditing process to become a Certified Green Business in Alameda County and have started my own B Corp certification process; both of these are reputable certifications that have established clear and transparent standards for green and sustainable businesses (and in an era of greenwashing, the need for standards is becoming increasingly important). There’s a post on my blog that explains more about my own sustainable business practices: Sustainability for One Small Business.
GCC: What does sustainability mean to you?
CM: Sustainability is a framework through which we can create a world that is socially just and operates within natural environmental limits. Although in modern western society, we tend to act as if we can separate ourselves from nature, the reality is that we can’t – every single item that we use in our daily lives is provided by nature, if we trace it back to the original raw materials from which it was created, so working within natural limits is necessary. We also need to ensure that all people have at least their basic human needs met and that they can live with dignity. I don’t believe that this is an idealistic notion; rather, I see it as an imperative based upon basic human compassion and a necessity for stability in an inter-connected world. When a business takes responsibility for its social and environmental impact, it moves us closer towards this better world. Sustainability helps to make this possible.
GCC: Why did you decide to join with the Green Chamber and how has it impacted your business?
CM: A lot of work needs to be done to move us closer to a just and sustainable world, and we each have a role to play. I respect the Green Chamber’s national advocacy efforts and want to support its work and also to be part of the green business community.
Certification through the Bay Area Green Business Program involves a three-step process:
The on-site audits are conducted to ensure compliance with the program standards. The auditors may vary depending upon the city, but for Cultivating Capital they included:
And, as it turns out, Cultivating Capital is the 500th business to receive Green Business Certification in Alameda County!
When I started Cultivating Capital, I wanted to create a company that would not just help others to become more sustainable, but would also incorporate the best sustainable business practices. After all, if we are to reimagine business for the 21st century, we can’t just set up and operate our companies in the traditional way.
Most of the companies that I’ve worked with are B Corps or Certified Green Businesses. When it comes to defining what it means to actually be a green or sustainable business, there are few agreed-upon standards, which makes it easy for a business to call itself green even if it isn’t. However, Certified Green Businesses have met local standards in the Bay Area for environmental responsibility, and B Corps have met national standards for social and environmental responsibility. I know that these companies share my social and environmental values and have been vetted by reputable, third-party organizations. If we are to transition to an economy that supports local, sustainable businesses that minimize their environmental impact and give back to local communities, we need to support those businesses financially. This means making conscious choices about how we spend our business dollars and remembering that every dollar spent is a vote in favor of a company’s practices.
With that in mind, below is a list of some of the things that I’ve done and suppliers I’ve used to help Cultivating Capital be more sustainable:
Of course, this isn’t to say that I’ve done everything that I can to make Cultivating Capital the kind of company that I want it to be! These are simply the first steps that I took when I started the business; I just didn’t feel that I could honestly say that I wanted to create a triple bottom line, sustainable business if I created a traditional LLC, banked at Bank of America, printed my business cards at Vistaprint, and purchased my office supplies at Staples. But there’s still a lot more that I’d like to do. Here are some projects that are on deck:
It’s important to remember that what it means to be a sustainable business is still being defined: “Make my business sustainable” is not something that can just be checked off a list! Rather, it’s an ongoing, evolving process of continual improvement. Nevertheless, that’s a rundown about what I’ve done so far to make Cultivating Capital a sustainable small business. I’d love to hear about what you’ve done in the comments.