The Impact Economy Brief | 1 November

Welcome to the latest edition of Bates Wells’ Impact Economy Brief.

Our fortnightly ‘Brief’ is intended to be a helpful reference point and resource for our network, providing 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:

“Social Enterprise”


Editor’s pick

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

We Need a New Capitalism, writes Marc Benioff, Chairman and Co-Chief Executive of Salesforce, in The New York Times, looking at measures that business can take now to develop a sustainable economy.


Impact Business

Why profit-driven business can never be the answer. Pioneers Post interviews Erinch Sahan, CEO of the World Fair Trade Organization, about social enterprises, sustainability and eco-anxiety, and his view that the traditional, profit-driven business model has had its day.

A longer read – Capitalism in crisis? Transforming our economy for people and planet is the latest ‘state of social enterprise’ report from Social Enterprise UK, reviewing the current state of the sector and making recommendations to support its development.

The B Corp community welcomes newly certified B Corporations Guardian Media GroupThe Body Shop and teapigs UK.

A longer read – CEO Guide to Food System Transformation is a new publication from the World Business Council for Sustainable Development, focused on the leadership needed to address the world’s massive food-waste problem. An accompanying blog highlights current wastage at US $940bn in annual economic losses, and the WBCSD’s call for a data-driven approach. 

Corporate Action on Climate Change Has to Include Lobbying writes sustainable business author, Andrew Winston, for the Harvard Business Review, noting both a growing intolerance for inconsistencies between businesses’ statements on climate action and their lobbying activity, and the power of business to influence policy to fight climate change.

Blog – Modern Slavery 2019: 5 things we’ve learnt, and the many things we haven’t. The Ethical Trading Initiative’s Head of Modern Slavery Strategy writes for UK Anti-Slavery Day (18 October) in a series of mini-blogs, considering the effectiveness of the measures taken by businesses to stop modern slavery.  Also, The Institute for Business Ethics has published a Business Ethics Briefing on Modern Slavery.


Impact Investment

The London Stock Exchange launches Green Economy Mark and Sustainable Bond Market, initiatives designed to support issuers implementing sustainable business models, and investors focusing on products and services supporting the low-carbon economy transition.

Podcast – The Ethical Compass interviews Damien Lardoux, Head of Impact Investing at EQ Investors, about identifying impact investment opportunities, measuring impact and the importance of data, the EQ Foundation, and the role of pension funds in impact investing.  

Interviewed by the Evening Standard, Prince Charles calls on the City to invest ‘trillions’ in sustainable schemes to help save planet, noting previous resistance from private finance and the current urgency for more finance.

Four lessons from the frontline. In this instalment of the Pioneers Post ‘Untold Banking’ series, Melanie Mills from Big Society Capital shares some key learnings from her 10 years in social impact investing.

Sky backs TerraCycle’s ‘zero-waste’ refill platform, reports Edie. Sky’s Ocean Ventures investment arm, funded by Sky and Innovate UK, has committed £1.56m to TerraCycle’s Loop platform, which facilitates businesses providing product refills to consumers. (For more on TerraCycle, Conduit Conversations interviews the company’s CAO in this podcast, at the Bloomberg Good Business Festival.)  

CDC Group, the UK’s development finance institution, backs WorldLink, Nepal’s largest private internet service provider, in its first equity investment in the country, to support development and economic growth through connectivity.


Legal and Regulatory

The FRC has published The UK Stewardship Code 2020, intended to promote transparency and integrity in business, and bring wider benefits for the economy, environment and society. Key developments in the new Code include a wider scope to cover asset owners and service providers, and requirements for signatories to take into account ESG factors (specifically including climate change) to ensure investment decisions align with clients’ needs, to report stewardship activity across a wider range of asset classes beyond listed equity and the UK, and to explain how the signatory’s purpose, investment beliefs, strategy and culture enable its stewardship. The new Code will take effect on 1 January 2020 (FRC press release and comment from The Chartered Governance Institute).

The Grunin Centre for Law and Social Entrepreneurship, at the NYU School of Law, has launched the 2019 Grunin Prize for Law and Social Entrepreneurship. The award is to recognize lawyers’ participation in the ways in which business is increasingly advancing the goals of sustainability and human development. The deadline for submissions is 31 January 2020.

The FRC has published a new report, Climate-related corporate reporting: Where to next?, about current climate-related corporate reporting practices and the need for more developed reporting by companies, in order to provide the information that investors want (press release).

Tax transparency: MEPs deplore Council’s lack of action on multinationals. The European Parliament’s press service reports on a resolution urging EU countries to progress draft rules to require multinational companies to publicly disclose their profit and tax paid in each country, in order to increase transparency and scrutiny.

The Employee Ownership Association has published its proposal for a National Strategy for Employee Ownership, calling on the Government to facilitate the development of employee ownership in the UK in order to improve productivity, economic democracy and corporate governance (press release).


Contacts

If you’d like to speak to us about our work in the Impact Economy, please get in touch.


If you’d like to speak to us about the Brief, please contact our editor, Phillippa Holland.


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 November 1, 2019.