The Impact Economy Brief | 7 July

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:

“Active Ownership”

Editor’s Pick

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

The power of shared value to generate sustained, strong commercial returns. Big Society Capital’s ‘Meet the Impact Manager’ guest blog series shares how some fund managers in its portfolio have been responding to COVID-19. Camilla Dolan of Eka Ventures shares how it is approaching impact investing, and how COVID-19 has accelerated the growth of consumer technology companies with strong ‘shared value’.

Impact Business

A number of cross-sectoral calls have been made to #BuildBackBetter for a fairer, greener and more resilient economy, including: 

Podcast – Harvard Business Review’s Exponential View interviews professor Rebecca Henderson about her vision of purpose-driven capitalism, where companies can make good profits by doing the right thing (SpotifyAppleGoogle)  

With the support of over 99% of its shareholders at its AGM, Danone has become the first listed company to adopt the “Entreprise à Mission” model (press release and English translation of the company’s bylaws).

Webinars – esela – the legal network for social impact – is hosting a series of free online events this month. Still to come are: “Fiduciary Duty in a Changing World: Impact Investing – the Why and How” and “Growing the Pie: Wealth, Ownership and the Law”, featuring speakers including: Sarah Gordon, Chief Executive of the Impact Investing Institute, Stuart O’Brien, Chair of the Pensions Climate Risk Industry Group and Partner at Sacker & Partners, and Alex Edmans, Professor of Finance at London Business School.

The winners of the fourth annual tech-for-good DigitalAgenda Impact Awards 2020 have been announced, celebrating technological innovations that improve lives and the world around us.

OnPurpose seeks Placement Hosts for its Associate Programme. OnPurpose works with talented professionals to help them become leaders in the impact driven economy. Placement hosts work successively with two Associates for six months each over the one-year programme, and the Associates undertake a wide variety of work, from important strategic projects to day-to-day business roles, from research and analysis through impact management or marketing. Bates Wells has taken on a number of OnPurpose Associates and benefited enormously from the scheme; we recommend other businesses consider the scheme. For more information, see the Placement Host Pack or contact the OnPurpose team. 

Impact Investment

Make Our Money Matter is a new campaign calling for the trillions invested through pensions to help build a better world, and encouraging individuals and organisations to find out what their pensions are invested in (press release). The Guardian reports on the campaign launch.

A longer read – Point of No Returns, Part IV – Biodiversity: An assessment of asset managers’ approaches to biodiversity is a new report from ShareAction, the responsible investment non-profit, presenting findings from data on the asset management industry’s approach to biodiversity, and outlining the impact of biodiversity loss on the economy (press release).

Social enterprises and social investors come together to urge Government to act now to extend SITR. A group of organisations interested in the social investment sector, including Bates Wells, has written a letter to the Treasury asking for an extension to the SITR regime to April 2023, due to its potential to help channel capital to social enterprises and charities, particularly in the wake of the pandemic. For more, the Guardian reported on the campaign.

A longer read – Rockefeller Philanthropy Advisors’ Impact Investing Handbook is a new publication intended to provide practical guidance to individuals, families, foundations and corporations, covering the ‘why’, ‘how’, ‘so what’ (impact measurement) and ‘now what’ (best practice implementation) of building and executing a tailored impact investing strategy.

Five ways impact investors can deal with the Covid-19 dilemma. Bates Wells’ Louise Harman and Sung-Hyui Park write for Pioneers Post, reflecting on learnings from a recent roundtable hosted by EVPA, about how impact investors can adapt to manage their investments and support investees dealing with the impacts of the pandemic.  

A longer read – Impact-Financial Integration: A Handbook for Investors is a new publication from the Impact Frontiers Collaboration, an initiative incubated within the Impact Management Project, presenting methods for impact and financial performance integration (landing page).   

Europe’s ‘only specialist investor in impact investing firms’ predicts multi-billion pound future for first social housing fund deal. ​Pioneers Post reports that Zamo Capital, the new company backed by Big Society Capital to help scale up UK social investors, has confirmed its first deal with Social and Sustainable Capital (press release).

From the US – Our Social Bond to Strengthen the Social Justice Sector. The Ford Foundation will issue bonds on the US taxable corporate bond market, as part of an initiative alongside four other major foundations, to support non-profits to continue providing services in the wake of the pandemic. For more, the New York Times provides commentary.

Legal and Regulatory

The Chancery Lane Project has published a second edition of its Climate Contract Playbook and an accompanying Glossary (landing page). The Project aims to create practical legal solutions to help lawyers and businesses to pursue Net Zero, including new contractual norms.

The Commission welcomes the adoption by the European Parliament of the Taxonomy Regulation, marking the final step of the adoption process of the political agreement that the co-legislators reached in December. The Taxonomy Regulation will be published in the Official Journal and enter into force 20 days thereafter. Article 20 of the Taxonomy Regulation creates the Platform on Sustainable Finance, a body of private and public sector experts that will advise the Commission on the technical screening criteria for the Taxonomy.

A longer read – Reducing UK emissions, Progress Report to Parliament is a new report from the Committee on Climate Change, looking at progress so far and setting out policy recommendations for the transition to a low-carbon and climate-resilient economy (press release).

Various entities have published responses to the European Commission’s consultation on revising the Non-Financial Reporting Directive, including:

For more, ICAEW has published a short report, Non-financial reporting: ensuring a sustainable global recovery, setting out a number of recommendations for improved reporting on environmental and social issues, as central to business making the necessary system changes in the recovery from the pandemic (press release).

A group of 45 civil society and trade union organisations has written an open letter to the EU’s Justice Commissioner, Didier Reynders, calling for a robust European legal framework consisting of horizontal legislation on mandatory human rights and environmental corporate due diligence and sustainable corporate governance legislation focused on directors’ duties (press release). For more, CORE, the UK civil society network on corporate accountability, has published its recommendations for a new corporate duty to prevent negative human rights and environmental impacts, including mandatory human rights and environmental due diligence, and more accountability for UK companies, in response to the BEIS Reforming Regulation Initiative.

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 July 3, 2020.