Under current California law companies can be sued, by their investors or shareholders, for pursuing environmental or social measures that have a negative impact on shareholders’ financial returns. The new proposed bill, called the Corporate Flexibility Act of 2011, will enable for-profit companies to concentrate on other items besides the bottom line. This is a huge step forward as fiduciary responsibility has always been a major hurdle for companies who have wanted to pursue more social and ecofriendly actions. Currently, if a company in California wants to pursue more proactive social and environmental avenues, they would need to think about becoming a nonprofit organization, a move that would almost ensure they would remain a small company.
If the bill does make it through, there is still a long road ahead to get conventional businesses to pursue environmental and social goals with as much vigor as they pursue financial ones. Regardless of what energy efficiency bills or mandates states may be passing, many companies are realizing the benefit of implementing sustainability plans; and that there are many relatively inexpensive ways available for businesses to start on this path. To find out how they can improve their energy efficiency and drive down costs, many businesses have been getting their buildings benchmarked or having energy audits performed. Businesses can also reduce their energy consumption by have lighting controls installed, re-tuning their building or implementing an energy management plan.