The Impact Economy Brief | 29 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 return on investment (SROI)”


Editor’s pick

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

What is the opportunity of systems thinking? In this blog, Activate The Future considers how we can prevent the solutions of the present causing problems for the future, by taking a ‘systems thinking’ approach to doing business.


Impact Business

The British Academy has published the second report from its Future of the Corporation programme, Principles for Purposeful Business, outlining the changes needed to put people and planet at the heart of corporate capitalism, and proposing a new formula for corporate purpose: to profitably solve problems of people and planet, and not profit from causing problems. The BBC provides commentary on the launch of this new report.

Good company: the capitalists putting purpose ahead of profit. The Guardian takes a look at the current state of the purposeful business movement.

A longer read – The Institute of Directors has published its Manifesto on Corporate Governance, setting out ten policy recommendations to the political parties in the upcoming election, designed to help restore trust in business, including: a Code of Conduct and training requirements for directors, clearly defined objects or ‘business purpose’ to help companies communicate their social impact beyond maximising profit, and a new ‘Public Service Corporation’ legal form required to balance stakeholder interests (press release).

Why Etsy gives its social impact goals equal standing with its financial performance. Fast Company interviews Josh Silverman, CEO, about Etsy dropping its B Corp status, and its publishing of its social impact performance in its annual report filed with the SEC. 

A longer read – PwC published its Low Carbon Economy Index 2019 setting out its findings on the progress of the low carbon transition, including its current stalling pace (press release).

Net-zero a commercial opportunity for business. Benet Northcote, Director of Corporate Responsibility, speaks to Edie about John Lewis & Partners’ decision to set a net-zero carbon target before the Government put its 2050 target into law, and the practical changes and mind-set that are helping the business work toward its target.


Impact Investment

GSG signs landmark agreement with UNDP. At the GSG Impact Summit in Buenos Aires it was announced that GSG will work with the UNDP’s SDG Impact initiative to provide SDG ‘Investor Maps’, ‘SDG Impact Assurance Standards’ and other tools and engagement initiatives to help direct more funding into achieving the SDGs.

World Bank and Credit Suisse partner to focus attention on the “Blue Economy” by issuing a USD 28.6 million, 5-year Sustainable Development Bond, aiming to raise awareness of the importance of ocean and freshwater resources for people, livelihoods and the planet.

Podcast – ‘We are overthrowing the dictatorship of profit’. Impact Alpha’s podcast, Returns on Investment, interviews Sir Ronald Cohen from this year’s GSG Impact Summit, about his predictions for the resilient growth of impact investment.

Big Society Capital has published its updated estimation of the size and composition of the UK Social Investment Market, finding 32% growth (~£865 million) year-on-year from 2017 to the end of 2018, to more than £3.5 billion.

A longer read – 15 Years of Impact – Taking Stock and Looking Ahead. In this new report, EVPA considers the current landscape of investing for impact, and introduces the ‘Charter of Investors for Impact’ (ten principles that drive and distinguish behaviour) and the ‘Roadmap for Investors for Impact’ (identifying three key areas for future work) (press release).


Legal and Regulatory

How the shareholder-first business model contributes to poverty, inequality and climate change is a new briefing note from the High Pay Centre and the TUC analysing the dividends and share buybacks paid by the FTSE100 over the last five years, and the impact of these practices in light of the doctrine of shareholder primacy and the push towards stakeholder capitalism and improving corporate sustainability (press release).

A longer read – FTSE Women Leaders, Improving gender balance in FTSE Leadership is the penultimate report published by the Hampton-Alexander Review, identifying progress made towards the 33% target for women in senior leader positions in the FTSE350 by the end of 2020 (press release). The Chartered Governance Institute provides comment in its press release that progress is good but not yet enough.  

The new Co-operative Corporate Governance Code has been published by Co-operatives UK, designed to be applicable to all types and sizes of co-ops on a comply or explain basis, and drafted with the UK Corporate Governance Code and Wates Corporate Governance Principles in mind. Accompanied by guidance, the Code is intended to help co-ops develop their governance practices (code landing page).

A longer read – The UK Jurisdiction Taskforce of the Lawtech Delivery Panel has published a legal statement on cryptoassets and smart contracts, seeking to address legal uncertainty by recognising cryptoassets as tradable property and smart contracts as enforceable agreements under English and Welsh law (press release).   

Directors’ Liability and Climate Risk: Comparative Paper – Australia, Canada, South Africa and the United Kingdom, from the Common Wealth Climate and Law Initiative, provides a comparative summary of analysis into how directors’ duties regimes are capable of being applied to governance failures in the identification, assessment, oversight and disclosure of climate-related financial risks.


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 29, 2019.