The Impact Economy Brief | 3 April

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. In this edition, you won’t be surprised to see that we’ve included a focus on developments and insights on the Coronavirus crisis.  

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:

“Catalytic Capital”


Bates Wells Coronavirus Insights

Bates Wells’ Impact Economy team is supporting our clients in the best way we can during this difficult period: through expert guidance and advice. Our clients are contacting us regarding a broad range of the issues they are facing, due to the Coronavirus.

As circumstances shift rapidly, we’re running regular webinars to provide guidance and help you stay up-to-date. And we’re sharing our Coronavirus Insights on a range of topics, including:

If you have queries around these or any other topics, please get in touch as we’d be happy to speak with you.


Impact Business

What does purpose look like in a crisis? The Blueprint Trust takes a look at some examples of the positive ways in which businesses are responding to the pandemic.

The World Economic Forum has published ‘Stakeholder Principles in the COVID Era’, encouraging businesses to be “leaders of responsiveness and stewards of resilience”, to continue to embody stakeholder capitalism, and continue efforts to achieve the Paris Agreement and UN SDGs.

Lessons from a Crisis: The Challenges of Changing Habits and Collective Behavior. In this thought-piece, B Lab Fellow, corporate lawyer and founder of The Shareholder Commons, Frederick Alexander considers how the current pandemic reveals a need for systemic change.

The European Commission has adopted a new Circular Economy Action Plan – For a cleaner and more competitive Europe, a core element of the European Green Deal. The new Plan focuses on design and production for a circular economy, and includes measures to empower consumers through greater transparency and a ‘Right to Repair’ (press release and Q&A).  

Podcast – Smash the Box interviews Cemal Ezel, founder of Change Please, a coffee business with a mission to help homeless people off the streets, about his journey to social business and the company’s focus on product quality (click through to: SpotifySoundCloud).

The UK Institute of Directors has announced the launch of its new Centre for Corporate Governance, intended to be a hub for discussion of corporate governance and related ESG issues; it’s first three topics of study will be: stakeholder governance, sustainable capitalism, and the governance implications of AI and other emerging tech.


Impact Investment

Amit Bouri: Impact investors are responding to ‘a crisis without a playbook’. Pioneers Post interviews the CEO of the GIIN, about how impact investors are responding to a pandemic-induced crisis that has both health and financial impacts. To assist during the pandemic, Pioneers Post is keeping an updated list of funding to help social enterprises and other social sector organisations: Social enterprises and COVID-19: Grants, loans and other funding.

Big Society Capital asks Westminster for emergency cash injection, alongside twenty other social investment organisations, to provide loans to charities and social enterprises to improve liquidity during the coronavirus crisis. Big Society Capital has also announced significant changes to the Growth Fund, including a six month interest-free period, to enable fund managers to support social enterprises and charities in their portfolios.

Video – The Conduit hosted a panel, The Potential Power Of Pensions, including film-maker Richard Curtis and the FT’s Gillian Tett, to discuss the opportunities and challenges of shifting the pension market to more sustainable and ethical investments for tangible impact. In a similar vein, Triodos Bank has launched a new campaign for ISA season called ‘Don’t Be A Fossil Fool’, encouraging and enabling people to shift their money away from fossil fuels.

Barclays announces ‘net zero’ ambition, must now address fossil fuel financing. Responsible investment organisation ShareAction provides a critique of Barclays’ proposal, which will go to a formal vote by investors at the company’s AGM, including on a detailed resolution co-ordinated by ShareAction and supported by a number of high profile investors (Barclays’ market announcement).

A longer read – The European Commission has published the Taxonomy: Final report of the Technical Expert Group on Sustainable Finance, containing recommendations relating to the overarching design of the Taxonomy, as well as guidance on how users of the Taxonomy can develop disclosures, and a summary of the economic activities covered by the technical screening criteria (technical annex). For more, Responsible Investor hosted a panel discussion that can be viewed on-demand via BrightTALK: EU Action Plan Series #1: The investment implications of the EU green taxonomy.  


Legal and Regulatory

The High Pay Centre has published a discussion paper, Conditions are critical: why publicly-funded bail-outs for private companies must include social and environmental conditions, arguing for conditions to be attached to the anticipated bail outs of large companies affected by the coronavirus (press release). For more, think tanks Common Wealth and IPPR have called for any bailout of the aviation sector to be contingent on ensuring job security, action on climate change, and a public ownership stake (press releaseIPPR briefing).

Consultation Plastic Packaging Tax: policy design. The government announced decisions for the design of the Plastic Packaging Tax, in light of previous stakeholder consultation, and now seeks views on areas of the tax design that have been further refined, ahead of the tax commencing in April 2022. The consultation closes on 20 May 2020.

Consultation – Proposals to enhance climate-related disclosures by listed issuers and clarification of existing disclosure obligations. The FCA is consulting on a proposed new rule for companies with a UK premium listing, requiring them to state whether they comply with the recommendations of the Taskforce on Climate-related Financial Disclosures and explain non-compliance, and on guidance on existing obligations requiring issuers to disclose information on climate-related and wider ESG matters. The consultation closes on 1 October 2020 (press release).  

A longer read – Transparency International UK has published a new report, Open business: Principles and guidance for anti-corruption corporate transparency, designed to challenge companies to fundamentally rethink how they disclose the measures they take to combat corruption and set a new bar for disclosure, providing a roadmap to better corporate practice (press release).

Consultation – European climate law – achieving climate neutrality by 2050. The European Commission is consulting on its legislative proposal for establishing the framework for climate neutrality across the EU by 2050, which would create a statutory target and aim to ensure that all EU policies and all sectors of the economy and society contribute to this goal. This law is a key part of the European Green Deal. The consultation closes on 1 May 2020.

One fifth of FTSE 350 companies cautioned for lack of gender diversity at senior leadership levels The Investment Association and the Hampton-Alexander Review have written to nearly 1 in 5 FTSE 350 companies asking them to set out what they are doing to improve the gender balance in leadership teams and meet the Review’s targets. For more on this topic, the House of Commons Library has published a briefing paper on the UK’s gender pay gap.


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 April 3, 2020.