Welcome to your roundup – a monthly selection of news hand-picked to keep you up to date with what’s going on for businesses wanting to create positive impact.

In this roundup you can find out what’s new in the B Corp, social enterprise, and impact investing spaces, amongst others, collated under helpful headings. We’ll also share links to resources and information that our expert lawyers have selected as being useful to you and your networks.

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Corporate Purpose

B Corps

Climate & Biodiversity

Impact Investing

Social Enterprise

ESG

Corporate purpose

Earth Law Center, B Lab Benelux and Nyenrode Business University have launched Onboarding Nature to help businesses explore ways to bring the interests of Nature into decision-making by reference to four models: Nature as Inspiration, Nature as Shareholder, Nature as Advisor, and Nature as Director. The initiative offers a toolkit with detailed examples of businesses using these models, including Faith in Nature and Patagonia.

The Future Planet Podcast interviews Brad Vanstone, founder of Willicroft, a plant‑based cheese producer that made Mother Nature its CEO to put the planet’s future into all decision-making (Spotify, Apple, Google). Finding that their products were not as low emitting as they’d hoped, the Willicroft team shifted their product development to further the business’ purpose. Now the business is looking to go further, with regenerative ingredients and products.

Measuring Ethics: The Human Factor. Richard Hardyment, Head of Business Engagement at the Institute for Business Ethics, outlines the difficulties of measuring ethical business culture. Hardyment proposes a bottom up approach where people on the business’ frontlines, who are often excluded from decision-making, shape what we measure and what the benchmark for ‘good’ should look like.

B Corps

B Lab UK announced that the number of UK B Corps has reached 2,000, surpassing the number of B Corps in Europe and trailing only behind the US & Canada with 2,400 certified businesses. The UK regional breakdown in the appendix to the announcement shows a high concentration of B Corps in London, the South West and South East, and almost a third of UK B Corps are professional and technical services firms. The announcement marks a doubling in the number of UK B Corps over just 18 months.

B Lab US and Canada has published a new set of climate justice case studies exploring how B Corps are developing their practices to centre the communities most affected by climate change (press release/summary). The case studies are of a small clothing company in California, a food seller in Ontario, and a home care company in Vermont, and they explore operational and supply chain issues, collaboration and advocacy.

Climate & biodiversity

Climate change – it’s everyone’s fight. Bates Wells’ Leticia Jennings considers the judgment of the European Court of Human Rights in the case of Verein KlimaSeniorinnen Schweiz and Others v. Switzerland. The Court ruled that Switzerland’s insufficient action on climate change constitutes a breach of the European Convention on Human Rights (ECHR) by failing to protect citizens against climate change, particularly those who are more vulnerable due to their sex or age. The Court found that the association Verein KlimaSeniorinnen Schweiz (Swiss Climate Senior Women Association) was entitled to bring the action due to the nature of climate change, as a common concern of humankind, and the need to promote intergenerational burden-sharing (Court press release and full judgment). The judgment raises the possibility of future ECHR climate actions brought by civic associations. For more, Edie reported on comments made by the UK Energy Secretary, who criticised the judgment. The judgment was delivered at the same time as two other climate cases brought by individuals against states that were alleged to have fallen short of their climate commitments, with both claims being deemed inadmissible. Further information on all three cases can be found here.

How can investors measure climate change adaptation and resilience impact? British International Investment (BII) announced a new report from the Adaptation and Resilience Investors Collaborative working group. The report aims to provide development finance institutions, multilateral development banks and impact investors with a clear framework by which to measure the impact of investments on climate adaptation and resilience. The report defines adaption and resilience as the “ability to prepare, prevent, respond to, and recover from climate-related shocks and stresses such as extreme weather events and shifts in climate and weather conditions”. The working group, which includes BII, hopes to accelerate understanding of how private investment can support climate resilience.

The Transition Plan Taskforce (TPT) has published final sets of guidance and resources, including sector-specific transition plan guidance for key areas and guidance on how to undertake a transition planning cycle. Also newly published are several TPT Working Group papers on key issues beyond net zero, including on the role of transition plans for SMEs and on creating a Just Transition. All of the TPT materials are available from the ‘Build your transition plan’ page.

A group of more than 100 prominent politicians, activists, academics, civil society leaders and others have signed an open letter to G20 leaders highlighting the connection between climate change and the worsening of global social crises. The letter calls on governments to invest in renewable energy, sustainable agriculture and climate adaptation, to reform regulation to ensure that polluters cannot act with impunity, and to remove the debt burdens that reduce the ability of some countries to invest in their sustainable development. Signatories include Helle Thorning-Schmidt, former Prime Minister of Denmark, David Miliband, President and CEO of the International Rescue Committee, Sadiq Khan, Mayor of London, Paul Polman, former Unilever CEO, and Paul Lindley, founder of B Corp Ella’s Kitchen.

Impact investing

Big Society Capital has rebranded as ‘Better Society Capital’ (BSC) in order to better reflect the organisation’s mission, while retaining its connection to its track record and role within the social investment movement. For more, BSC shares insights into the challenges of a Just Transition, including the need for significant infrastructure and technology investment, delivery of which requires new business models, jobs and skills. Noting that social investment includes a focus on end user outcomes and community accountability, BSC provides examples of its investments into initiatives aiming to tackle some of these challenges.

Better Society Capital, Big Issue Invest and 34 other organisations have signed a letter published in the Financial Times (paywalled article) calling for the next government to unlock private investment to drive growth and reduce poverty. Recommendations from the group include the launch of national and local community growth funds, a new Financial Inclusion Taskforce, the mobilisation of private investment for more cost-effective public services delivery, and incentives to encourage investment in long-term sustainable and inclusive growth, including revised guidance on fiduciary duties for institutional investors.

Evolving your endowment: Driving change through impact investing. The Impact Investing Institute has published a guide for charitable foundations moving into impact investing. The guidance is split into three sections with case studies: ‘Laying the groundwork and setting the impact strategy’ (exploring how a mission can be translated into an impact investing strategy and how this can be resourced); ‘Codifying your goals and approach’ (writing an impact investment policy statement); and ‘Finding the right investment partners’ (ensuring that the investment firm can achieve the foundation’s aims and how to manage these relationships).

Savills Investment Management announced the first close, raising £123m, of the Savills IM Simply Affordable Homes Limited Partnership fund. The founding investors include Better Society Capital and Schroder BSC Social Impact Trust plc. The fund will invest in affordable housing, social-rent homes and shared-ownership homes, and is designed for institutional investors seeking returns that also deliver positive social impact.

Impact Europe and the national advisory boards for impact investing of France, the Netherlands, Belgium, Italy and Spain have launched an Impact Manifesto. The manifesto calls on the EU to: mainstream impact investing by putting impact at the centre of policymaking (including shifting from investing in ‘sustainable activities’ to investing for positive impact); make all EU public funding impact funding; and deliver on the UNSDGs by 2030. The manifesto also calls for developments to EU sustainability legislation, including the introduction of an impact category in the Sustainable Finance Disclosure Regulation and a strengthened double materiality principle in the Corporate Sustainability Reporting Directive.

Social enterprise

Pioneers Post explores whether purpose-led business could be a better approach in the ‘private vs. public’ ownership debate over the UK’s water companies. Bates Wells’ Philip Kirkpatrick notes that, without a powerful accountability mechanism, delivery of a water company’s social purpose depends on the culture of the company and the will of its shareholders. Also, Andrew O’Brien, Director of Policy and Impact at Demos, comments that making the UK’s water companies social enterprises could enable firms to positively contribute to the environment but would need to be supported by state coordination and financing.

Social Enterprise UK hosted an event with think-tank Onward to explore how social enterprises and other mission-led businesses can strengthen the economy and wider society, as part of the Future Economic Alliance campaign. Key insights reported include a significant role for social enterprises in the business landscape, representing around 5% of UK businesses and 4 million jobs, and that social enterprises are vital to growing local economies. Challenges for social enterprises where also raised, including a lack of access to mainstream finance and barriers when applying for public sector contracts.

The Schwab Foundation for Social Entrepreneurship and the World Economic Forum have published a new report, The State of Social Enterprise: A Review of Global Data 2013 – 2023. The report examines the role that social enterprises play in addressing the most pressing global challenges, using data from more than 80 countries gathered between 2013 and 2023. Insights include that there are an estimated 10 million social enterprises globally, generating around $2 trillion in revenue annually and creating nearly 200 million jobs. The report also notes that social enterprises face common barriers such as lack of public awareness, inadequate legal structures, and difficulties in accessing finance.

Andrew Dubock, Communications Manager at Plunkett UK, writes for Good Finance about how social investment can support environmentally conscious community-owned businesses to invest in energy saving measures. Research by the foundation identified difficulties relating to cost and location that hamper community businesses in improving energy resilience. For more, Social Investment Business’ new report on the energy efficiency of community buildings in England finds that over 7,300 community buildings do not meet basic energy efficiency standards.

ESG

The FCA has published non-handbook guidance on the anti-greenwashing rule to assist all authorised firms with achieving compliance by 31 May, when the new rule comes into effect (FCA press release). The anti-greenwashing rule aims to protect consumers by ensuring that the sustainability characteristics of products and services are accurately described, and it is designed to be consistent with CMA and Advertising Standards Authority guidance on environmental claims. The press release also announces that the FCA is consulting on expanding the proposed labelling and Sustainability Disclosure Requirements regime beyond fund managers to include portfolio managers.

Unilever has published the results of its review of 27 industry associations that it works with and calls on associations to step up their climate efforts (full report: Climate Policy Engagement Review). Unilever assessed the industry associations’ stated positions on engaging with policy makers in support of the Paris Agreement and their public records of activity. The company found that many of the industry associations were either misaligned with Unilever’s climate policies or were aligned but had no, or little, record of meaningful engagement with governments. Unilever states its commitment to increasing lobbying transparency and to working with its industry associations to improve climate engagement.

The Home Office has announced changes to the Modern Slavery Statement Registry (a voluntary service) that aim to encourage businesses to upload robust annual statements in a timely manner. The changes involve certain emailed submission reminders and more transparency on the information that companies disclose. For more, Principles for Responsible Investment (PRI) has published its response to the House of Lords Select Committee call for evidence on the impact and effectiveness of the Modern Slavery Act 2015. The PRI calls for new measures including monitoring and accountability mechanisms, financial penalties, and legislative alignment with European and international standards on human rights and environmental due diligence.

Bates Wells, alongside the Equality and Human Rights Commission, supported an Uber Eats driver in a ground-breaking employment case that is the first to consider AI and automated decision-making in the context of work and its potential for unfairness and discrimination. Bates Wells’ Hannah Wright commented that sophisticated AI systems are increasingly becoming a part of how people are managed at work, which carries substantial risks, particularly where decision making processes are opaque.

The EU Parliament has approved the new EU Corporate Sustainability Due Diligence Directive, which will require firms to end or mitigate their adverse impact on human rights and the environment within their value chains. The new rules will apply to EU and non-EU firms meeting certain thresholds. As well as various requirements that will apply to firms’ activities, Member States will be required to set up infrastructure including a supervisory authority with the power to impose fines on non-compliant firms (of up to 5% of net worldwide turnover). The directive needs formal endorsement by the EU Council before its entry into the EU Official Journal. Implementation of the new rules is scheduled to be phased during 2027-2029. For more, the EU Parliament has also adopted the revised ecodesign framework to introduce environmental sustainability requirements for most products sold in the EU. This legislation also requires Council approval before becoming law.

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