It’s a new year in California, and the green agenda takes another step forward as two new types of stock corporations are created: the public benefit and the flexible purpose corporations. A corporation can file as one of these new types of corporate entities if part of the corporate mission is to improve society and the environment, and the corporation creates a “general public benefit” or “material positive impact on society and the environment.” For background, see last year’s blog on the draft legislation and the Secretary of State’s website.

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The California legislature recently approved SB 657 and sent it to Governor Schwarzenegger for his signature. The “California Transparency in Supply Chains Act of 2010” would, “beginning January 1, 2012, require retail sellers and manufacturers doing business in the state to disclose their efforts to eradicate slavery and human trafficking from their direct supply chains for tangible goods offered for sale, as specified.”

The legislation requires companies to post on their websites answers to questions surrounding their supply chain management to help eradicate slavery and human trafficking. The bill would not apply to those companies with less than $100 million in worldwide gross receipts. Companies will need help in determining what the rules are for determining what their gross receipts are.

This bill is sitting on the Governor’s desk, and we should know within the next thirty days if it becomes law or is vetoed. Combined with California’s new green chemistry laws, the burden and responsibility for product sellers in California to know, regulate, monitor and report on their entire global supply chain is increasing, whether it’s a toxic ingredient used, the manufacturing process is used, the types of energy and fuels used or now possibly the labor used.

For more information contact Maureen Gorsen in our Sacrament office, 916-498-3005.