Find news, events, articles, videos, and more that answer your questions and keep you up-to-date.
Visit Resource Center
Stay informed on compliance updates
On October 1, Delaware’s Certification of Adoption of Transparency and Sustainability Standards Act became effective. This Act was enacted by House Bill 310 and is codified at Title 6, Secs. 5000E through 5008E of the Delaware Code. H.B. 310 created a certificate program that allows Delaware corporations, LLCs, partnerships, and other Delaware entities to design and implement a sustainability program and report to the public about its sustainability efforts.
Now that the Delaware Secretary of State is accepting applications for Sustainability Certificates, interest in House Bill 310 is growing. In response, this article will take a brief section-by-section look at the Certification of Adoption of Transparency and Sustainability Standards Act’s provisions.
Sec. 5000E states that the intent is to support Delaware business entities in their global sustainability efforts. It is enabling legislation that permits a Delaware entity to signal its commitment to global sustainability but does not purport to prescribe which sustainability standards an entity chooses to adopt.
Among the key terms defined in Sec. 5001E are -
Sec. 5002E sets forth the conditions that an entity must meet in order for the Secretary of State to issue it a Certificate. They include delivering a Standards Statement, paying the required fees, remaining a reporting entity, and remaining in good standing. The section also permits the entity to disclose that it is a reporting entity.
The Statement must set forth various acknowledgments, including that the governing body of the entity has adopted resolutions setting forth its standards and assessment measures, that it is committed to using the assessment measures to assess its performance, and that it will deliver to the Secretary of State, upon request, its most recent report. The Standards Statement also identifies an internet link at which the standards and assessment measures, the third-party criteria, and other information, as well as any reports filed by the entity, will be made available.
Sec. 5004E requires a Renewal Statement to be submitted to the Secretary of State between October 1 and December 31 of each year and states that a reporting entity becomes a non-reporting entity on January 1 of the following year if the Renewal Statement is not filed.
Sec. 5005E provides that a reporting entity that became a non-reporting entity because of its failure to file a Renewal Statement can file a Restoration Statement and become a reporting entity once again.
Sec. 5006E provides that neither the failure by an entity to satisfy any of its standards, nor the selection of specific assessment measures, nor any other action or omission to act in seeking, obtaining or maintaining status as a reporting entity, shall, in and of itself, create any private right of action or give rise to any claim for breach of any fiduciary or similar duty.
Sec. 5007E sets forth the fees to be collected by the Secretary of State.
Sec. 5008E sets forth the title which is the "Certification of Adoption of Transparency and Sustainability Standards Act'.'
For more information, including a sample Standards Statement form and a list of reporting entities you can visit the Delaware Secretary of State’s website: https://corp.delaware.gov/adoption-transparency-sustainability-standards/. In addition, House Bill 310 can be viewed here: http://delcode.delaware.gov/title6/c050e/index.shtml.
More in Compliance Solutions
More in Running Your Business