The Impact Economy Brief | 13 December

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:

“Purposely”


Editor’s pick

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

8 Valuation Categories Provide a Broader Picture of Your Company’s Capital. Corey Kohn, founder, member-owner and COO at B Corp dojo4, writes for Conscious Company Media about using more than financial metrics to measure the value of a business.


Impact Business

The Companies Act 2006 (Amendment) (Company Purpose) Bill. Bates Wells has published a draft Bill to displace the doctrine of ‘shareholder primacy’ as the guiding principle of boardroom decision-making, in favour of the ‘triple bottom line’ as the solid foundation for a sustainable economy. You can read more about ‘Operation Upgrade’, a collective effort to ‘upgrade’ the capitalist ‘operating system’, and the full press release to see who is backing the Bill.

The World Economic Forum has announced its new Davos Manifesto 2020: The Universal Purpose of a Company in the Fourth Industrial Revolution, including calling on companies to pay their fair share of taxes, have zero tolerance for corruption, respect human rights throughout their supply chains and foster a level playing field. Klaus Schwab, Founder and Executive Chairman, provides commentary on the new Manifesto.

Over 500 B Corps around the world commit to net zero at COP25. At the UN Climate Change Conference in Madrid this week, 533 businesses publicly committed to accelerate the reduction of their GHG emissions, to reach a 1.5 degree trajectory leading to net zero emissions by the year 2030. With this announcement, B Lab has launched the second edition of its playbook for business on How to Declare a Climate Emergency & Take Climate Action.

The EU has announced the European Green Deal, setting out how Europe will become the first climate-neutral continent by 2050 through a roadmap of key policies and measures (press release). Prior to the announcement, the European Environment Agency published its Europe’s State of the Environment 2020 report, providing  a stark snapshot of where Europe stands in meeting its 2020, 2030 and 2050 targets, and calling for a radical scaling up of action. 

The SDG Action Manager has been launched for beta testing; the final version of this free tool will be launched in January 2020. It is designed to enable businesses to take action on the SDGs and has been developed by the UN Global Compact and B Lab (press release).


Impact Investment

Impact Investing Institute launches to help put more capital to work for people. The Institute is a non-profit organisation working to raise awareness of and address barriers to investing for impact. It will promote ways for individuals to use their investments to address social challenges and gain financial return, help to facilitate capital flow into impact investment, and collaborate with government and regulators to develop policy and advocate for impact investment. A factsheet is available for more information.

Scottish government opens up ‘repayable grants’ to environment-focused social enterprises.  Pioneers Post reports on the opening of the £500,000 ‘Boost It’ fund for social enterprises working on environmental issues, noting that this is one of only a few UK funds focused on supporting social enterprises prioritising environmental impact.

Podcast – The future of Who-Gives-a-Crap and scaling purpose. Good Future interviews Simon Griffiths, CEO and co-founder of Who-Gives-a-Crap, the toilet paper company with a clearly defined purpose to bring toilets to the 2.3 billion people who don’t have access to one.

PRI Inevitable Policy Response – Forecast Policy Scenario: Equity Markets Impacts. By reference to the MSCI ACWI equity index, this new analysis forecasts a disruptive policy response to climate change causing the re-pricing of many companies by 2025, demonstrating a significant risk of value loss within major sectors as well as significant upside for those prepared for the transition (press release).  The BBC reported on the publication.

A longer read – Funding the Green New Deal – How we could Save for the Planet is a new report published by Richard Murphy, director of Tax Research UK and founder of the Tax Justice Network, and environmentalist Colin Hines, both members of the group that wrote the 2008 Green New Deal report. This new report argues that the funds required to finance the Green New Deal could be derived from changes to the tax reliefs on ISAs and pensions and government borrowing by issuing bonds, instead of looking to taxation or quantitative easing (press release).


Legal and Regulatory

Germany – Our responsibility in a globalised world – A call for mandatory human rights and environmental due diligence legislation. In a joint statement coordinated by the Business & Human Rights Resource Centre, forty-two German companies and a working group of investors have called for a mandatory human rights and environmental due diligence law in Germany (press release).

A longer read – Business-related human rights abuse reported in the EU and available remedies is a new report on research carried out by the EU Agency for Fundamental Rights, exploring business-related human rights abuses in the context of remedies available.

Regulation 2019/2088 of the European Parliament and Council, 27 November 2019, on sustainability‐related disclosures in the financial services sector has been published in the Official Journal of the EU. This legislation was developed as part of the EU’s action plan for sustainable finance, to impose disclosure requirements on financial market participants and insurance intermediaries concerning the integration of sustainability factors into financial advice and investment decision-making.

Consultation– The Climate Disclosure Standards Board (CDSB) has launched an open public consultation: Advancing Nature-related Financial Disclosures and use of the CDSB Framework, with the aim of accelerating nature-related financial disclosures at scale to support capital allocation towards a sustainable future, and exploring the role of the CDSB Framework in this, which aligns with the Task Force on Climate-related Financial Disclosures recommendations (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.


This information is necessarily of a general nature and doesn’t constitute legal advice. This is not a substitute for formal legal advice, given in the context of full information under an engagement with Bates Wells.

All content on this page is correct as of December 13, 2019.