Chapter 206
2019 -- S 0395 SUBSTITUTE A
Enacted 07/15/2019

A N   A C T
RELATING TO BUSINESSES AND PROFESSIONS

Introduced By: Senators Seveney, DiPalma, Coyne, and Euer
Date Introduced: February 27, 2019

It is enacted by the General Assembly as follows:
     SECTION 1. Title 5 of the General Laws entitled "BUSINESSES AND PROFESSIONS"
is hereby amended by adding thereto the following chapter:
CHAPTER 89
TRANSPARENCY AND SUSTAINABILITY STANDARDS FOR RHODE ISLAND
BUSINESSES ACT
     5-89-1. Purpose.
     The purpose of this chapter is to support Rhode Island business entities in their global
sustainability efforts by providing this enabling legislation that permits a Rhode Island entity to
signal its commitment to global sustainability. This chapter does not purport to prescribe which
sustainability standards an entity chooses to adopt. Thus, a Rhode Island entity is free to choose
standards promulgated or developed by any entity.
     5-89-2. Legislative findings.
     The legislature finds that:
     (1) The state of Rhode Island is committed to initiatives designed to support
sustainability practices by providing a platform for manufacturers and businesses to demonstrate
their corporate commitment to social responsibility and sustainability.
     (2) The Rhode Island department of environmental management has a suite of voluntary
green certification programs for the hospitality and tourism industry, landscapers, golf courses,
and other industries.
     (3) In recognition of the increasing interest from investors, customers, and employees for
greater transparency in sustainability practices, this legislation provides Rhode Island businesses
a means to demonstrate to their customers, investors, and employees that they are committed to
sustainability that embodies business practices and systems that are designed to foster innovation
and long-term profits as well as environmental and societal benefits.
     (4) Rhode Island's program shall be implemented by way of voluntary enabling
legislation and applies only to those who seek to become certified as reporting entities. There is
no single blueprint for best practices in sustainability among or within industries, and this
legislation shall allow businesses to craft a sustainability blueprint that meets their specific needs,
provided that the entity's governing body approves its standards and assessment measures and
that they are made publicly available.
     5-89-3. Definitions.
     As used in this chapter only, the following terms shall have the following meanings:
     (1) "Acknowledged" means with respect to any document or instrument required to be
executed by an authorized person pursuant to this chapter, the authorized person executing such
the document or instrument has certified, under penalty of perjury, that the information set forth
in such the document or instrument is accurate and complete to the best of such the authorized
person's actual knowledge after due inquiry.
     (2) "Assessment measures" means with respect to any entity, the policies, procedures, or
practices adopted by such the entity to adduce objective factual information to assess the entity's
performance in meeting its standards, including any procedures for internal or external
verification of such the information.
     (3) "Authorized person" means, with respect to any entity, any person or entity who has
been duly authorized in accordance with the organizational documents of the entity and the laws
of this state (whether statutory, common law or otherwise) under which the entity is incorporated,
formed, or organized to execute such the documents and instruments and make such the
acknowledgments as are required by this chapter.
     (4) "Certification of adoption of transparency and sustainability standards" means a
certificate, issued by the department of environmental management, attesting that a reporting
entity has fulfilled sustainability metrics and filed with the secretary of state a standards statement
pursuant to this chapter. Such The certificate shall state on its face that the state has not reviewed
the contents or implementation of the matters referenced in the standards statement, nor verified
any reports made by the reporting entity.
     (5) "Control,'' including the terms "controlling,'' "controlled by,'' and "under common
control with,'' means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a person or entity, whether through the ownership of
equity or other voting securities, by contract or otherwise.
     (6) "Entity'' means any corporation (stock or nonstock), or a limited-liability company,
existing under the applicable laws of this state.
     (7) "Governing body'' means the board of directors or equivalent governing body, person,
or entity having the power to manage and direct the business and affairs of the entity, and shall
include any duly authorized and empowered committee of the board of directors or equivalent
governing body.
     (8) "Nonreporting entity'' means any person or entity (including any entity) that is not a
reporting entity.
     (9) "Organizational documents'' means the certificate of incorporation, bylaws,
partnership agreement, limited-liability company agreement, articles of association or other
agreement, document, or instrument containing the provisions by which an entity is formed or
organized and by which its internal affairs are governed, in each case as amended, modified,
supplemented, and/or restated and in effect as of any date of determination.
     (10) "Provider'' means, as to any entity, any third party that is engaged to provide
professional consulting services or advice to assist entities or enterprises in measuring, managing,
or reporting the impact of their business and operations on issues of social and environmental
impact.
     (11) "Report'' means a report with respect to a reporting period for a reporting entity
containing the following:
     (i) A summary of the standards and assessment measures in effect during the applicable
reporting period, which summary shall include the third-party criteria and any other source used
to develop the entity's standards and assessment measures and the process by which they were
identified, developed, and approved by the entity;
     (ii) A summary of the actions or activities by which the entity has sought to meet the
standards during the applicable reporting period, including engagement with and disclosure to
stakeholders, if any;
     (iii) The most recent available objective and factual information developed pursuant to
the assessment measures, if any, with respect to the entity's performance in meeting its standards
during the reporting period, and an assessment by the governing body whether the entity has been
successful in meeting the standards, and in the case of any failure to meet such the standards, a
summary of any additional efforts the governing body has determined the entity will undertake to
improve its performance in respect thereof, or its determination not to undertake such the
additional efforts;
     (iv)(A) The identity of any provider assisting the entity in measuring, managing, or
reporting the impact of the entity's business and operations in light of its standards; or
     (B) A statement that the entity has not engaged the services of any provider for such
these purposes;
     (v) A summary of any changes to the standards, assessment measures, or reporting
period, the process by which such the changes were identified, developed, and approved by the
entity, and the third-party criteria used to develop any changes to the standards;
     (vi) A summary of the actions or activities planned for the next succeeding reporting
period with respect to measuring, managing, and reporting with respect to the standards if such
the actions and activities are materially different from those described for the applicable reporting
period; and
     (vii) Notwithstanding the foregoing, no entity shall be required to include in any report
any information that such the entity determines in good faith is subject to an attorney-client or
other applicable privilege or would result in the disclosure of trade secrets or other competitively
sensitive information.
     (12) "Reporting entity'' means an entity that has been issued a certificate of adoption of
transparency and sustainability standards and that has not become and continues to be a
nonreporting entity pursuant to § 5-89-6.
     (13) "Reporting period'' means a period of one year, the initial such period to begin not
more than one year following the filing of the standards statement, and subsequent reporting
periods to begin on the day following the last date of the prior reporting period, unless a
governing body elects to shorten the duration of a reporting period that has not begun in order to
change the start date for subsequent reporting periods.
     (14) "Standards'' means, with respect to an entity, the principles, guidelines, or standards
adopted by the entity to assess and report the impacts of its activities on society and the
environment, which principles, guidelines, or standards shall be based on or derived from third-
party criteria. The Rhode Island department of environmental management green certification
standards may be used as initial guidelines for all applicants in businesses covered by the
certification program.
     (15) "Standards statement'' means the filing described in § 5-89-5.
     (16) "Third party'' means, with respect to any entity, any person or entity other than any
person or entity that controls, is controlled by, or under common control with such the entity,
including any governmental or nongovernmental organization that provides services, standards,
or criteria with respect to measuring, managing, or reporting the social and environmental impact
of businesses or other enterprises.
     (17) "Third-party criteria'' means any principles, guidelines, or standards developed and
maintained by a third party (including a provider) that are used to assist businesses or other
enterprises in measuring, managing, or reporting the social and environmental impact of
businesses or other entities.
     5-89-4. Certificate of adoption of transparency and sustainability standards.
     (a) The secretary of state, in coordination with the director of the department of
environmental management, shall issue a certificate of adoption of transparency and sustainability
standards to any entity if the secretary of state shall have determined that the following conditions
have been satisfied:
     (1) Such The entity shall have executed and acknowledged, and delivered to the secretary
of state, a standards statement;
     (2) Such The entity shall have paid all fees and costs assessed by the secretary of state;
and
     (3) Such The entity remains a reporting entity, and if such the entity is registered or
formed with the secretary of state, it is in good standing upon the records of the secretary of state.
     (b) Each reporting entity shall, for all purposes of the laws of this state, be authorized and
permitted to disclose, publicly or privately, that it is a reporting entity.
     (c) The secretary of state is hereby authorized to promulgate rules and regulations
necessary to implement this chapter and shall issue any such certificate required pursuant to this
chapter and shall further be permitted to charge a reasonable fee for any certificates issued and /or
renewed.
     5-89-5. Statement of adoption of transparency and sustainability standards.
     If the governing body of an entity has adopted resolutions setting forth the entity's
standards and assessment measures, the entity may file a standards statement that:
     (1) Acknowledges that the governing body of the entity has adopted resolutions setting
forth the entity's standards and assessment measures;
     (2) Identifies an Internet internet link on the principal website maintained by or on
behalf of the entity at which the standards and assessment measures, the third-party criteria used
to develop the standards, a description of the process by which such the standards were
identified, developed, and approved and any report filed or to be filed by the entity are and will be
readily available at no cost and without the requirement of the provision of any information, and
will remain available for so long as the entity remains a reporting entity (the "website'');
     (3) Acknowledges that the entity has agreed to acknowledge and deliver to the secretary
of state, its most recent report concurrently with its annual report as specified in § 7-1.2-1501, or
§ 7-6-90, or § 7-16-66;
     (4) Acknowledges that the entity has committed to:
     (i) Use the assessment measures to assess the entity's performance in meeting its
standards;
     (ii) Review and assess its standards and assessment measures from time to time, and
make such changes thereto as the governing body in good faith determines are necessary or
advisable in furtherance of meeting the entity's standards;
     (iii) Prepare and make readily available to the public at no cost and without the
requirement of the provision of any information (by posting on the website at the identified
Internet internet link) a copy of its report within ninety (90) days of the end of each reporting
period; and
     (5) Is acknowledged by an authorized person.
     5-89-6. Reporting entity status - Renewal statement.
     (a) A reporting entity shall become a nonreporting entity on January 1 of the following
year if the reporting entity shall have failed to submit the renewal statement to the secretary of
state in accordance with this chapter without the need for further action by the secretary of state.
A reporting entity's renewal statement shall:
     (1) Acknowledge that any changes since its most recent filing of a renewal statement or
restoration statement, or, if no renewal statement or restoration statement has been filed, since the
filing of its standards statement, to its address within the state or standards and assessment
measures, and a description of the process by which such the changes were identified, developed,
and approved by the entity and the third-party criteria used to develop any changes to the
standards are available on the website;
     (2) Acknowledge that, for the most recent reporting period for which a report was
required to be made available, if any, a report was made available on the website in accordance
with this chapter within the time period provided for in § 5-89-5(4)(iii);
     (3) Provide an Internet internet link to the report for the most recent reporting period, if
any, on the website; and
     (4) Be acknowledged by an authorized person.
     (b) No standards statement shall be accepted by the secretary of state for an entity if it has
become a nonreporting entity pursuant to subsection (a) of this section within the prior year.
     5-89-7. Restoration statement.
     (a) If any reporting entity shall become a nonreporting entity for failure to file a renewal
statement, it may file a restoration statement. The restoration statement shall:
     (1) Acknowledge that any changes since its most recent filing of a renewal statement or
restoration statement, or, if no renewal statement or restoration statement has been filed, since the
filing of its standards statement, to its address within the state or standards and assessment
measures, and a description of the process by which such the changes were identified, developed,
and approved by the entity and the third-party criteria used to develop any changes to the
standards are available on the website;
     (2) Acknowledge that a report for all the reporting periods ended more than ninety (90)
days prior to filing the restoration statement have been made available on the website in
accordance with this chapter;
     (3) Provide an Internet internet link on the website to the report for the most recent
reporting period and any other reporting period for which an Internet internet link has not been
previously provided in a renewal statement or restoration statement; and
     (4) Be acknowledged by an authorized person.
     (b) Any nonreporting entity that files a restoration statement shall thereupon
automatically become a reporting entity, without the need for further action by the secretary of
state.
     5-89-8. Limitation of liability.
     Neither the failure by an entity to satisfy any of its standards, nor the selection of specific
assessment measures, nor any other action taken by or on behalf of the entity pursuant to this
chapter, or any omission to take any action required by this chapter to seek, obtain, or maintain
status as a reporting entity, shall, in and of itself, create any right of action on the part of any
person or entity or otherwise give rise to any claim for breach of any fiduciary or similar duty
owed to any person or entity.
     5-89-9. Fees.
     No document required to be filed under this chapter shall be effective until the applicable
fees required by this section are paid and upon the receipt of a statement under § 5-89-5, the fee
for which shall be one hundred dollars ($100),; or a renewal statement under § 5-89-6, the fee for
which shall be ten dollars ($10.00),; or a restoration statement under § 5-89-7, the fee for which
shall be fifty dollars ($50.00), shall be paid to and collected by the secretary of state.
     5-89-10. Enabling.
     This act is enabling and applies only to those businesses who that seek to become
certified as a reporting entity and, who that comply with all applicable registration requirements.
Reporting entities are enabled to craft whatever sustainability blueprint they require that meets
their specific needs as there is no single blueprint for best practices in sustainability among or
within industries.
     SECTION 2. This act shall take effect on January 1, 2020.
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