The Impact Economy Brief | 10 May

Welcome

Sectors
Impact Economy
Type
Update

There’s been a lot happening in Bates Wells’ Impact Economy practice since our celebration in January. If you were unable to attend, you might like to watch the short video that we screened at the party, which explains the ethos of our Impact Economy practice.

We’re planning on sending this fortnightly ‘Brief’ as a helpful reference point and resource to our network, to give you an overview of activity in the Impact Economy. You won’t be surprised to see that we’ve taken a particular interest in legal and regulatory developments.

We hope you find the Brief to be a valuable digest of the things you need to know, and invite you to tell us what you’d like to read more about.


Talk the Talk

As the language of the Impact Economy develops, we’ll add relevant terminology to our Impact Economy Glossary, to help share a common understanding. This week’s jargon is:

“Blended Finance”


Editor’s Pick

If you only have 5 minutes of quiet this week, we recommend…

Beyond billable hours: the lawyers on standby for an impact revolution. Pioneers Post reports on the ESELA Annual Conference – The Impact Revolution: The Role of Law and Lawyers.


Impact Business

Top companies say they’re working to help the environment. Now the CEO of food giant Danone is funding a UN-backed tool that will keep them accountable. Business Insider covers B Lab’s development of tools to help large corporates recognise the benefits of stakeholder-based business.

New B Corp – The B Corp community welcomes newly certified London-based architectural practice, Kennedy Woods Architecture.

PodcastThe Innovation Economy. A Harvard Business Review podcast interviewing Mariana Mazzucato, Director of UCL’s Institute for Innovation & Public Purpose, discussing the role of government in innovation and business growth, and the case for a new theory of value in today’s economy.

Why convincing corporates to buy social is not a huge challenge. Social Enterprise UK writes for Pioneers Post, marking the fourth year of the Buy Social Corporate Challenge and highlighting a new partnership aiming to improve social enterprise access to large corporate supply chains.

PodcastWhat it takes to start a Benefit Corporation. Offering a view from the US, Head of Legal Policy at B Lab, Rick Alexander, and co-founder of B Corp Fors Marsh Group, Ben Garthwaite, discuss B Corp certification and Benefit Corporations, values and retention, and the future of stakeholder-business models.

The Skoll Foundation has published a series of articles highlighting key takeaways from this year’s Skoll World Forum, such as Rewriting the Rules for an Economic System that Serves All. You can now watch the Forum sessions by signing up for a Digital Pass.


Impact Investment

ConsultationSocial Investment Tax Relief (SITR): call for evidence. The government seeks views on how the SITR regime has affected access to finance for social enterprises, which will help determine the future of the scheme which expires in 2021. Responses before 18 July. Big Society Capital comments on the announcement.

WebinarBlended finance and the SDGs. A free-to-access webinar from Responsible Investor (via Bright Talk) on the ‘what and how’ of blended finance in furtherance of the SDGs, featuring speakers from the UN and impact-orientated investment managers.

Forget following the crowd, this is a long-term opportunity smart investors can capitalize on. Nili Gilbert, co-founder of Matarin Capital Management, writes for CNBC about the “Patience Premium” for long-term investing with a focus on ESG, following the launch of Matarin’s Long-Term Indices in partnership with S&P Dow Jones Indices.

A longer readPart 3: fossil fuel divestment: Is there a “common ground” strategy? Raj Thamotheram, CEO of Preventable Surprises and visiting fellow at the Smith School, Oxford University, writes for Responsible Investor, outlining approaches for mainstream investors in light of the divestment debate and highlighting current initiatives to develop low-carbon investment.

Investors worth >$1 trn pressure Barclays on climate. A group of investment managers and pension funds, including Hermes EOS, the Environment Agency Pension Fund and the Central Finance Board of the Methodist Church, led by ShareAction has written to Barclays’ CEO requesting that the bank halt its financing of new coal and oil sands projects.


Legal and Regulatory

ESMA submits technical advice on sustainable finance to the European Commission. The ESMA has published two reports containing technical advice to the Commission, on the integration of sustainability risks with regards to investment firms and investment funds, into MiFID II, AIFMD and the UCITS Directive.

ConsultationEFRAG consultation on equity instruments – Research on measurement. As part of the European Commission’s Action Plan on Sustainable Finance, the European Financial Reporting Advisory Group has launched a consultation on whether alternative accounting treatments are needed to show performance and risks in relation to equity/equity-type instruments in long-term investment business models.

Employees on boards: Modernising governance is a report from the Local Authority Pension Fund Forum on its survey of FTSE All-Share companies, finding that a large majority of public companies will comply with the new UK Corporate Governance Code, which emphasises workforce engagement, by giving a NED responsibility for representing workers, rather than by appointing a director from the workforce or constituting a workforce advisory panel (press release).

European Parliament adopts text of proposed Regulation on disclosures relating to sustainable investments and sustainability risks. The proposed Regulation aims to harmonise transparency rules for financial market participants and advisers with regard to sustainability risks and the provision of sustainability-related information on financial products (legislative tracker).

Enhancing banks’ and insurers’ approaches to managing the financial risks from climate change. The Prudential Regulation Authority has published its Policy Statement providing feedback to responses to its consultation on improving management of the financial risks of climate change (press release).

ConsultationCorporate Transparency and Register Reform is a new BEIS consultation on a substantial package of reforms to Companies House aimed at increasing transparency whilst protecting personal data and helping to prevent fraud. (BEIS press release.)

Disclaimer – The information contained in this briefing is not intended to be a comprehensive update – it is our selection of third party reports, news, podcasts and other materials, as well as some content produced by Bates Wells where indicated as such, which we think will be of interest to those working in the Impact Economy. This content is necessarily of a general nature; it does not constitute advice, and specific advice should always be sought for specific situations.


All content on this page is correct as of May 10, 2019.