The Impact Economy Brief | 13 December

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 today, we recommend…

Unlocking pathways to scale and impact through innovative revenue models. Big Society Capital explores how founders of mission-driven start-ups can manage a successful business and create impact at scale by experimenting with creative third-party payer models.


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:

“Value Chain”


Highlights

A new Impact Management Platform has launched to support interoperability between standards. Bates Wells speaks to Business Reporter about the Better Business Act and boosting wellbeing and sustainability through premises. And the Ellen MacArthur Foundation’s new report finds a US$700bn opportunity in circular fashion business models.

CDC Group announced that it will become ‘British International Investment’, with an expanded remit and new strategy. GenderSmart discusses the ‘care economy’ initiative, and the UK’s Green Finance Institute has launched an initiative to mobilise private investment into nature.

TheGovernment is consulting on new Environment Act measures to tackle illegal deforestation in supply chains, the FCA has published its ESG strategy, and the EU Commission has announced proposals to improve conditions for digital labour platform workers.


Impact Business                                                   

The new Impact Management Platform has been launched by a group of international organisations, including B Lab, Capitals Coalition, CDP, CDSB, the PRI, UNDP, GIIN and the Value Reporting Foundation (UNEP FI press release). The platform aims to support practitioners to manage their sustainability impacts, including from investments, by explaining how standards can be used together to enable a complete impact management practice.

Videos – Bates Wells’ partners Luke Fletcher and Karli Hiscock were interviewed by Business Reporter about, respectively, how the Better Business Act could steer UK businesses into being more impactful and sustainable, and how Bates Wells helps organisations to boost wellbeing and sustainability through their premises. These short videos are embedded into blogs from Bates Wells’ Purpose and Impact Lead, Angela Monaghan, on building purpose into your business, and Managing Partner, Martin Bunch, on conscious consumerism and debunking assumptions about purpose and impact.

How to: ‘walk your talk’ and build an inclusive workforce. Pioneers Post reports from a Social Enterprise Futures panel, at which Jane Hatton, founder of Evenbreak (which helps connect employers and disabled candidates), Ama Afrifa-Tchie, head of people, diversity and equity at Mental Health First Aid England, and Lisa Maynard-Atem, managing director of the Black United Representation Network, discuss key aspects of building an inherently inclusive workforce.

A longer read – Circular Business Models – Rethinking business models for a thriving fashion industry. The Ellen MacArthur Foundation has published results from a study into sectors such as fashion rental, resale, repair, and remaking, identifying the potential to claim 23% of the global fashion market by 2030 and a US$700bn opportunity, through circular business models that cut the volume of new clothing produced (overview and press release). For more, the John Lewis Partnership and Hubbub have launched The Circular Future Fund, a £1m grant fund to support innovations that can accelerate the transition to a circular economy.

A longer read – The Great British Talent Swap – A report on crossover opportunities between Businesses and Charities. The Leadership Council and pilotlight have published a report calling for the charitable and commercial sectors to share knowledge, experience and talent in order to, among other things, help business be more familiar with centralising purpose. The report features insights from interviewees, including: Amanda Mackenzie OBE, CEO of Business In The Community, Sir Harvey McGrath, Chair of Big Society Capital and of the Advisory Council of the Impact Investing Institute, and Steve Murrells, CEO of Co-op (press release).

A longer read – The EU Commission has published Building an economy that works for people: an action plan for the social economy, setting out measures to develop the social economy, including: policy and legal framework developments in areas such as taxation, public procurement and state aid; business development support and an EU Social Economy Gateway for access to information; new financial products under the InvestEU programme; and a new European Competence Centre for Social Innovation (summary and press release, Q&A and initiative page).


Impact Investment

A longer read – During COP26, UK development finance institution CDC Group, the European Bank for Reconstruction and Development, and the European Investment Bank launched a new toolkit, the Gender-Smart Climate Finance Guide, as part of the 2XCollaborative Climate Finance Task Force, aimed at promoting gender equality and women’s empowerment in climate finance investments (press release). For more, CDC Group has announced that it will be renamed ‘British International Investment’, with an expanded geographical remit and a new 5 year strategy.

A Care Economy Primer for Investors. GenderSmart’s JEDI Project Director, Sana Kapadia, explains the new ‘care economy’ initiative focused on building investor capacity, to catalyse the deployment of more capital in this area. For more, GenderSmart considers why relatively few pension funds apply a gender lens to their investments, and the opportunities that this offers.

Big Issue Invest joins multi-million pound partnership to support green jobs. Big Issue Invest is working with Lambeth Council and Sustainable Ventures to open an innovation hub for climate technology and green businesses at London’s County Hall, aiming to create space and mentoring for 4,000 green jobs and 1,000 businesses by 2025.

Private equity firms are cottoning on to impact investing. Citywire considers mainstream adoption of impact investing, noting a need to ensure accountability for impact delivery in order to prevent impact-washing.

The UK’s Green Finance Institute has launched a new initiative to help mobilise private investment into nature. The ‘GFI Hive’ aims to increase private investment in nature restoration and nature-based solutions, working with the finance sector, government, academia, NGOs and land managers, and help plug the estimated £44bn – £97bn financing gap to achieving key UK nature goals by 2030.


Legal and Regulatory                                     

Consultation – Government sets out plans to clean up the UK’s supply chains to help protect forests. The Government is consulting on new measures in the Environment Act 2021 tackling illegal deforestation in supply chains. The consultation includes which businesses should be in scope; how businesses should conduct and report on due diligence to identify and mitigate deforestation risk; and how the enforcement authority will monitor and ensure compliance with the regulations. The consultation will close on 11 March 2022.

Review of Corporate Governance Reporting. The FRC has reported on the second year of premium listed companies applying the 2018 UK Corporate Governance Code. Based on a sample of companies, the FRC found improvements, including better articulation of company purpose; more putting the workforce at the centre of culture reporting; and improved reporting on environmental and social issues and their consideration at board-level. However, the review also found that few companies reported on areas where they underperformed, that diversity and inclusion continues to be an area of concern, and that boilerplate or declaratory statements were used without substantiation. The report sets out recommendations for improvement (press release).

A longer read – A strategy for positive change: our ESG priorities. The FCA has published its ESG strategy, containing its plan to support the financial sector in driving positive change, including the transition to Net Zero.

47 organisations have written to the EU Commission President raising concerns about delays to the Sustainable Corporate Governance initiative. For more, the Dutch member of the European Coalition for Corporate Justice, the MVO Platform, welcomed the announcement that the Dutch government will introduce a national law on human rights and environmental due diligence, in light of the delays to the Sustainable Corporate Governance initiative.

The EU Commission has published proposals to improve the working conditions of people working through digital labour platforms and ensure their enjoyment of their labour rights. The proposals include a draft Directive; a call for national measures to improve standards for platform workers; and a public consultation on draft guidelines on the application of EU competition law to collective agreements of self-employed people. For more, The Guardian reports on the announcement.  


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 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 10, 2021.