Rhode Island passed a law this legislative session that I sponsored to help small business and manufacturers who wish to stand out amongst the competition as working towards sustainability and corporate responsibility. Big companies in Rhode Island have been doing this for years (CVS, Toray Plastics, General Dynamics) through the Department of Environmental Management’s sustainability programs that encourage energy efficiency, waste minimization, recycling, composting, using cleaning products with fewer toxins, and reducing reliance on single-use plastics.
Purpose, corporate responsibility and sustainability are no longer buzzwords; they have become business priorities. They are 21st century business practices to attract customers, investors and young employees like millennials who care deeply about corporate responsibility, sustainability and purpose.
Sixty-five percent of students surveyed say they expect to make a positive social impact through their work in their career. According to Corporate Executive Board, employees most committed to their organization put in 57 percent more effort on the job and are 87 percent less likely to resign.
If it’s important to Wall Street, it’s important to business. In recent years, as younger investors, in particular, have shown an interest in putting their money where their values are, brokerage firms and mutual fund companies have begun to offer exchange-traded funds that meet environmental, social and governance (ESG) criteria.
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ESG goes beyond profits; it’s also purpose. Big companies are going to their suppliers to explain why as suppliers they need to be sustainable in ESG practices if they want to continue as a vendor.
For ten months, I met and worked with businesses, environmental groups, and the Rhode Island Manufacturers Association (RIMA) to better understand and frame how sustainability and purpose can translate into profits. RIMA includes 1,600 manufacturers in this state and this is not the manufacturing of your grandparents. Today’s manufacturing is precision manufacturing with technology, G-Code, CAD, cybersecurity, and marine technology. Attracting young talent is important for the future success of any business.
According to the 2017 Cone Communications CSR Study, more than three-quarters, 78 percent, of employees say they want to be an active participant in helping their company improve its responsible business practices by providing feedback, ideas and possible solutions.
And by next year, 2020, Gen Z (those born after 2000) will account for 40 percent of global consumers and an estimated $44 billion in purchasing power (Ethical Corporation, 2018).
Rhode Island is only the second state in the country to enact this enabling legislation that allows a board of directors to establish standards from energy efficiency, minimizing waste to water conservation. It’s purposely not prescriptive because every business is different. Certification and adoption of the Transparency and Sustainability Standards for Rhode Island Businesses are based on existing Green Certification Programs at RI DEM.
A sustainable business integrates a people-driven business model with environmental, social and financial capital for increased prosperity.
Running a business today without emphasizing corporate sustainability and purpose for employees, customers and investors is like running a business in the 1990s without computer technology!
Rep. Deborah Ruggiero (D-Dist. 74, Jamestown, Middletown) is an advocate for small business in Rhode Island