The Impact Economy Brief | 1 May

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

Our ‘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:

“Carbon positive, carbon negative and climate positive”


Editor’s Pick

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

Big Society Capital looks at five ways purpose-led start-ups are helping to tackle the coronavirus crisis by innovating around user needs, including in the areas of health services, education and financial inclusion. 


Impact Business

Event – Allies for System Change: an Imperative 21 virtual convening – 21 May 2020Imperative 21 is a business-led, cross-sector network of coalitions working to define the imperatives for a 21st century economy that creates value for all stakeholders, while stewarding the natural and social systems on which markets and all life depend. Imperative 21 invites business leaders, policymakers, investors and citizens who want to collaboratively redesign our economy, to become Allies for System Change and convene on 21 May to take the initiative forward. The Imperative 21 founding partners include: B Lab, The B Team, Chief Executives for Corporate Purpose (CECP), Coalition for Inclusive Capitalism, Conscious Capitalism and JUST Capital.

Fashion Revolution’s 5th annual Fashion Transparency Index ranks 250 of the largest fashion brands on how much they disclose about their social and environmental policies, practices and impacts, and discusses the importance of transparency and key findings from the data. Fashion Revolution has also written about the impact of COVID-19 on the people who make our clothes, and is providing updates on how brands are responding.

Podcast – Manufacturing a Better Future for Fashion. Brand on Purpose talks to ABLE Founder and CEO, Barrett Ward, about radical transparency and how the ethical lifestyle brand works to end generational poverty by providing jobs for women.  

COVID-19 and Responsible Business Conduct. The OECD has published a short guidance note encouraging businesses and governments to take a responsible business conduct approach to decision-making during the pandemic, in order to pursue increased resilience, more inclusive distribution of benefits from recovery measures and a stronger contribution to sustainable development.

Event – Circular Economy Week 1 – 5 June 2020. London’s 3rd annual circular economy week will be an online event, showcasing how cities and businesses are mitigating carbon and innovating for climate action through the circular economy.

A longer read – Human Rights Due Diligence and COVID-19: Rapid Self-Assessment for Business. The United Nations Development Programme has published a tool to help businesses manage the human rights impacts of their operations, which consists of a non-exhaustive list of actions relating to human rights risks common to many industries in light of the pandemic. For more, Oxfam welcomes Lidl’s new human rights policy, and describes the actions the supermarket is taking to improve human rights protection in its supply chain.


Impact Investment

Applications are open for the Resilience and Recovery Loan Fund (RRLF), a new loan fund launched by Social Investment Business (with initial £25m funding from Big Society Capital) for social enterprises and charities experiencing disruption to their normal business model as a result of COVID-19. The RRLF has been established to make the existing government scheme (the Coronavirus Business Interruption Loan Scheme) more easily accessible to charities and social enterprises, and offers loans of between £100,000 to £500,000 to eligible organisations.

Does Impact Investing Always Come At A Price? In the first of a four part series with family offices in mind, Forbes considers how we define impact investment and how assessing impact-based returns differs from traditional risk-return models.

Unitus Europe – European Philanthropy and Social Investing Impact Hub. A group of European networks, including EVPA and the Global Steering Group for Impact Investment, have set up a new hub intended to support and coordinate philanthropic and impact investment responses to the pandemic. Suppliers of funding, such as foundations, social investors and public funders, active in Europe are invited to connect and share best practice (press release).

Key considerations for restructuring Social Investment transactions during the COVID-19 crisis. Bates Wells’ Louise Harman and Luke Fletcher consider how borrowers and lenders might adjust their terms in order to manage investments and preserve social impact objectives.

Podcast – Conscious Stewardship: How investors can play a role in responsible wealth creation. Ethical Compass interviews Mark Goyder, founder of Tomorrow’s Company, about the need for forward-facing compliance, how impact investing is not an all-or-nothing option, the creation of markets in ESG and impact, and Goyder’s new book.

Post-Covid recovery packages must quicken the pace to net-zero carbon emissions. Allianz CIO, Günther Thallinger, and Prof. Nick Robins, of the London School of Economics, write for Responsible Investor, outlining ways in which stimulus packages could support the low-carbon transition and noting the Net-Zero Asset Owner Alliance’s readiness to work with governments and other stakeholders to lay the foundations for a resilient, net-zero and inclusive economy.

307 institutional investors, representing over USD8.4tn in assets under management, have now signed the Investor Statement on Coronavirus Response, recognising the interdependence of stakeholders, urging businesses to show leadership as a force for good, and setting out a number of recommended measures.


Legal and Regulatory

Coronavirus (COVID-19) guidance for Community Interest Companies (CICs). The Office of the Regulator of CICs has updated it’s guidance concerning the pandemic, which includes sign-posting to sources of information and support.

Modern slavery reporting during the coronavirus (COVID-19) pandemic. The government has published guidance for businesses about addressing and reporting on modern slavery risks during the pandemic.

A longer read – Adoption of a Regulation of the European Parliament and Council on the establishment of a framework for sustainable investment. The EU Council has adopted a regulation setting out the EU-wide “taxonomy”, designed to provide a common language for business and investors to identify environmentally sustainable economic activities. The Council’s position incorporates previously agreed amendments to expand the scope of application of the regulation and provide greater transparency obligations upon large public interest entities. The proposed regulation will next go to the EU Parliament for second reading (press release and Statement of the Council’s Reasons).

Panama Papers Four Years On: Anonymous Companies and Global Wealth. Transparency International looks at what’s changed since the Panama Papers were leaked, to improve transparency in company ownership in the fight against corruption, fraud and tax evasion.

Consultation – The European Commission has extended its consultation on the renewed sustainable finance strategy, open for responses until 15 July 2020. The renewed strategy builds on the 2018 Action Plan on financing sustainable growth and is intended to provide a roadmap of actions to increase private investment in sustainable activities, to further the European Green Deal and integrate environmental risks into the financial system (consultation document).

Consultation – The European Commission is consulting on proposed revisions to its 2030 Climate Target Plan intended to put Europe on a more gradual pathway towards climate-neutrality by 2050. The consultation aims to collect opinions on the desired ambition level of climate and energy policies, necessary actions in different sectors and specific policy design, and will close on 23 June 2020.

Dutch officials reveal measures to cut emissions after court ruling. The Guardian reports on measures taken by the Dutch government since the Urgenda Foundation’s successful claim in the Dutch Supreme Court. In the same theme, Reuters reports that Norway’s Supreme Court is to hear a case against Arctic oil exploration, brought by Greenpeace and other environmental groups claiming a breach of the people’s constitutional right to a healthy environment.


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 May 1, 2020.