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MONTH-IN-BRIEF (Jul 2018)

Environmental Law

Delaware: The First State in Sustainability

Robert Whetzel, Richards Layton & Finger

On June 27, 2018, Delaware Governor John Carney signed legislation enacting the Delaware Certification of Adoption of Transparency and Sustainability Standards Act (the “Delaware Sustainability Act” or “DSA”), which will become effective on October 1, 2018. The Delaware Sustainability Act, which is the first of its kind in the United States, represents Delaware’s effort to support the sustainability initiatives of its corporate citizens.  The DSA creates a framework for recognition of a Delaware entity’s adoption and implementation of sustainability standards, and reporting on sustainability practices, leading to the issuance of a certificate of adoption of transparency and sustainability standards.

The DSA is permissive and non-mandatory, applying only to those Delaware entities that affirmatively elect to pursue the certification process.  The DSA recognizes that there is not a “one size fits all” approach to sustainability, and allows flexibility in the selection, adoption, and implementation of sustainability standards that are tailored to the business of a particular entity.  The DSA also recognizes that many of Delaware’s largest and most prominent corporate citizens have well-established sustainability programs in place.  Accordingly, the DSA focuses on governance processes in the adoption of sustainability standards and reporting; it does not require the adoption of specific standards, nor does it impose substantive requirements to meet or achieve particular goals.

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