The Impact Economy Brief | 10 September

Welcome to the latest edition of Bates Wells’ Impact Economy Brief, a helpful reference point and resource for our network. Here we provide an overview of activity in the Impact Economy, including legal and regulatory developments.

Editor’s Pick

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

The Net Positive Manifesto – Is the world better off because your company is in it? Former Unilever CEO, Paul Polman, and sustainable business author and consultant, Andrew Winston, write for Harvard Business Review about the benefits to business of creating more value for society, with examples of how businesses are taking this approach, including partnering with policymakers through ‘net positive advocacy’.


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 Capital”


Summary

B Lab UK has launched its Boardroom 2030 campaign, inviting businesses to host a special board meeting to explore the future in 2030, and social enterprise Change Please has acquired AMT Coffee as part of growing its social impact. The British Academy’s Future of the Corporation programme will be launching its final report during its third Purpose Summit, and Uruguay has enacted benefit corporation legislation.

Big Society Capital is developing a taxonomy of taking on social investment, the new G7 Impact Taskforce has announced its membership, and the EU has adopted a Green Bond Framework, in support of a greener recovery from the pandemic. Also, the UK Government has announced amendments to strengthen the duty in the Environment Bill to set a legally-binding target to halt species decline. The Institute of Business Ethics has found room for improvement in the FTSE100’s codes of ethics, and a number of organisations working with investors on social justice have voiced support for the EU’s ‘social taxonomy’.


Impact Business                                                   

B Lab UK has launched its Boardroom 2030 campaign, which invites businesses to host a special board meeting to engage stakeholders and explore what a 2030 future might look like, in order to tackle the challenges that lie ahead and make decisions to futureproof the business and the world. A Boardroom 2030 Activation Kit can be downloaded, to help businesses plan their meeting.

A longer read – B Lab has published its SDG Insights Report presenting analysis of companies’ performance in achieving the Sustainable Development Goals, based on data from the SDG Action Manager. The publication launched September’s 17 Days for 17 Goals content series, intended to bring to life how B Lab’s mission and work align with the SDGs.

WebinarPurpose Summit: Purposeful Business in Policy, Practice and Business Education, 22-24 Sept 2021. The British Academy Future of the Corporation programme will be launching its final report during its third Purpose Summit. The Summit will host discussions about the role of business teaching, within institutions and professions, in embedding the concepts of purposeful business into education for future leaders.

Change Please acquisition to see 55 AMT Coffee sites ‘converted’ to social mission. Pioneers Post reports on the acquisition by Change Please, the social enterprise coffee business tackling homelessness, of AMT Coffee, a chain of coffee bars in the UK and Ireland.

100 tech companies join forces to cut carbon emissions. Renewable energy B Corp Bulb and Tech Nation, with other founding members, have launched Tech Zero, a climate action group for tech companies aiming to accelerate reaching net zero through collaboration and pursuing shared commitments.

A view from South America – Uruguay has become the 8th country to enact benefit corporation legislation, which will provide entrepreneurs with a legal structure that mandates stakeholder governance. El Observador reports on the passing of the legislation. 

Stakeholders incorporated: Can capitalism change if company charters stay the same? The FT Moral Money Forum analyses results from its survey on whether alternative corporate structures, such as B Corps and Public Benefit Corporations (‘PBC’), could advance the shift to sustainable capitalism, and considers the increase in PBC US listings and VC investment.


Impact Investment

A new framework for understanding why organisations take on social investment. Big Society Capital is developing a ‘taxonomy’ of the reasons for which organisations take on investment, with the aim of understanding how investees are adapting to the changing environment and what other support they may need.

The new Impact Taskforce announces its membership. Established under the UK’s presidency of the G7 (here), the group will be coordinated by the Global Steering Group for Impact Investment working with its UK member, the Impact Investing Institute.

S in ESG pensions roundtable. ReGenerate has published a summary of its roundtable on social impact factors, particularly with regard to pensions, with senior leaders from the Government, the investment industry and the responsible investing community. Held in July, with Guy Opperman MP as keynote speaker, the roundtable was supported by Berenberg and Joseph Rowntree Foundation (landing page).

A view from Singapore Social Impact Guarantees: The Next Evolution in Outcomes-Based Funding. Kevin Tan and Nadia Ahmad Samdin, of social innovation non-profit Tri-Sector Associates, and Lorinet Foundation founder, Pierre Lorinet, write for Stanford Social Innovation Review to consider the piloting of social impact guarantees in Singapore, aiming to increase participation in outcomes-based funding for impact.

A longer read Evaluating blended finance instruments and mechanisms: Approaches and methods is a new ‘development co-operation working paper’ published by the OECD, analysing evaluation methods for blended finance mechanisms and making recommendations for improvement, with a view to closing the funding gap for achieving the SDGs (landing page).

European Commission gearing up for issuing €250bn of NextGenerationEU green bonds. The EU Commission has adopted a new Green Bond Framework in anticipation of the issuance of green bonds as a significant part of funding the NextGenerationEU instrument, intended to support a greener post-pandemic recovery. Members States will allocate over a third of their Recovery and Resilience Plan to climate-relevant investments and reforms, and report green expenditure to the Commission.


Legal and Regulatory                                     

The Climate Disclosure Standards Board has published new guidance and an online course to help companies disclose water-related financial information, and ensure that investors receive the information needed to drive the transition to a sustainable and water-secure economy (press release).

Environmental organisation ClientEarth has submitted referral requests to the FCA regarding UK listed businesses, and calls for greater enforcement action on corporate reporting requirements relating to climate change risk (press release).

Landmark Environment Bill strengthened to halt biodiversity loss by 2030. The Government has announced amendments to the Environment Bill that are intended to strengthen the duty to set a legally-binding target to halt species decline by 2030, and that would introduce new requirements for water companies to monitor the impact of waste discharges.

FTSE 100 Codes of Ethics: room for improvement. The Institute of Business Ethics reports on its analysis of the FTSE100 businesses’ codes of ethics, finding that whilst the majority had a code in place there is room for development (press release).

The NGO position on the EU’s proposed social taxonomy. Following the EU Commission’s consultation, a group of organisations, including the Investor Alliance for Human Rights, ShareAction and the World Benchmarking Alliance, has published a statement in Responsible Investor expressing support for the development of the social taxonomy, as an opportunity to create a global standard for socially sustainable activities.

Part of the EU’s sustainable finance programme, the six Delegated Regulations and Directives that seek to integrate sustainability into investment and insurance activity, by amending the UCITS Directive, AIFMD, MiFID II, Solvency II and IDD, have been published in the Official Journal of the EU. Most of the amendments are applicable from August 2022, although some instruments are to be implemented earlier. Links to the legislation: amending UCITS Directive – here, amending AIFMD – here, amending MiFID II – here and here, amending Solvency II – here, and amending IDD – here.


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 September 9, 2021.