Welcome to your round-up: a monthly selection of news hand-picked to help keep you up to date, for businesses, investors and others working to create positive impact.
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Corporate purpose
The Cabinet Office is seeking expressions of interest for membership of a new Impact Economy Advisory Council, which will advise the government on policy, strategy and engagement relating to the impact economy. The council will be supported by the Office for the Impact Economy, and bring together representatives from across impact investing, philanthropy, purpose-driven business and more. Applications close on 6 August.
Allia Impact and Beauhurst Insights have published The Impact Business Tipping Point: A Data-Driven Census of the UK’s Mission-Led Business Landscape, aiming to quantify the “Impact-First” and “Balanced” companies that deliver measurable social and environmental impact, using data from Companies House and other sources. The report identifies more than 150,000 mission-led businesses (as defined within the research methodology) across the UK, generating £37bn in annual turnover and supporting 1.12 million jobs. It found that mission-led businesses have grown by approximately 61% since 2016 (compared with 42% across the UK business population) and have higher five-year survival rates. The report also identifies funding gaps affecting some mission-led businesses, particularly those operating in community-based services.
The European Ownership Network (EON) has published Ownership and EU Inc., a policy briefing calling for the proposed ‘EU Inc.’ framework to recognise steward ownership and employee ownership models, to give business owners more options for succession planning and help keep businesses within local ownership. (EU Inc. is a European Commission proposal for companies to operate under a harmonised set of EU-wide rules that would cover aspects such as corporate, insolvency, labour and tax law.) EON argues that future European company law should support ownership structures that protect businesses’ long-term future and preserve their missions.
B Corps
B Lab US & Canada looks back at the origins of the B Corp movement, celebrating 20 years of development. For more, Asad Hamir co-founder of Klyk, which aims to embed circularity into business tech, wrote for B Lab UK about why he supports the changes proposed by the Better Business Act campaign. Hamir notes that current norms for using technology present a cost to the UK that might be mitigated by encouraging businesses to prioritise responsibility over quick disposal.
It’s Time to Fix the Rules of the Game. B Lab’s Senior Policy Manager, Carlota de Paula Coelho, wrote for Euractiv arguing that, while European leaders may seek sustainable, innovative and resilient competitiveness, markets still penalise companies that internalise their social and environmental impacts and reward those that do not. Coelho sets out recommendations to create structural conditions for sustainability to be a competitive advantage.
Drawing on discussions at a recent roundtable we hosted for B Corps and other impactful organisations, Bates Wells’ Laura Hobbs and Philippa Courage explore how purpose-driven businesses can consider the impact of their AI usage. This short article summaries some of the ideas raised for improving both environmental and social factors, to support more responsible AI implementation.
Social enterprise
The Centre for the Understanding of Sustainable Prosperity (CUSP) has published The Role of Social Enterprise in Transforming the UK Food System, a policy briefing drawing on evidence from the Social Enterprise Food Systems (SEFS) project. It finds that social enterprises can deliver food-related interventions that are “trusted, culturally sensitive, and integrated with wider support for health, wellbeing and social care”, through being embedded in communities and connecting food with other policy priorities, but that further policy interventions are required to support this. For more, CUSP published an article discussing the findings.
Social Enterprise UK (SEUK) has published Addressing the Funding Gap of LGBTQ+ Support Organisations: Can social investment be part of the solution?, a report drawing on SEUK’s State of Social Enterprise data and case studies. The report highlights barriers to accessing finance for social enterprises that provide services to LGBTQ+ people and makes recommendations aimed at improving awareness, access and support.
Locality, Power to Change and the Esmée Fairbairn Foundation have published Keys to the future: How we build a new era of community ownership. The report highlights strong government support for community asset ownership, including the recent announcement of a “Pride in Place Community Right to Buy Fund”, but also sets out findings on the limitations in funding design and availability and other support and coordination required to help potential community businesses come into fruition. The report calls for a National Community Ownership Strategy and a £1bn fund over the next five years, through drawing together philanthropic capital, social investment and public funding, and outlines the roles that different stakeholders could play in supporting the growth of community ownership.
Sustainable fashion
As part of London Climate Action Week, Bates Wells and DEPLOY convened a panel exploring a key challenge for the fashion industry: taking circularity from ambition to commercial reality. Bates Wells’ Oliver Scutt and Anita Binns have summarised the discussion, which included the mismatch between investment time horizons and circular business models, AI as both a powerful enabler and a point of debate, and the role of regulation in reshaping the landscape.
The EU’s ban on destroying unsold clothes, accessories and shoes now applies to large businesses, and will apply to medium-sized businesses from 2030. The new rules have been introduced under the Ecodesign for Sustainable Products Regulation (ESPR) and aim to further the transition to a circular economy. With limited exceptions, in-scope businesses must now prioritise keeping products in use by selling them (including through discounts or alternative markets), donating them to charities or social enterprises, or preparing them for reuse (repairing, refurbishing or remanufacturing). Businesses will also be subject to data and reporting requirements that aim to prevent misuse of the rules. For more, the Ellen MacArthur Foundation has published a white paper setting out recommendations for how the ESPR Delegated Act for textiles could mandate/strengthen key performance requirements, to direct the market more firmly towards the circular economy.
Climate & biodiversity
Lee Davies, Deputy Director for Adaptation and Rural Communities at Defra, has written about the government’s plans to invest in climate adaptation. Davies notes that government is making its plans based on a minimum of 2°C of warming by 2050 and highlights new investment of up to £30 million into strengthen the evidence base needed for effective climate adaptation, as part of a new ‘30by30’ commitment. For more from government, the UK has ratified the Biodiversity Beyond National Jurisdiction Agreement (the ‘High Seas Treaty’), which aims to strengthen protection for marine biodiversity beyond national jurisdictions. It also establishes rules for sharing the benefits of marine genetic resources, relevant to medicine, biotechnology, agriculture and scientific research.
Lord Nicholas Stern and Delfina Godfrid from the Grantham Research Institute on Climate Change and the Environment have written for Economics Observatory to consider the role of the state in fostering growth and the green transition. The article draws on published research to outline key dimensions of the state action necessary for a successful transition into a more sustainable economy.
The Taskforce for Nature-related Financial Disclosures (TNFD) has published Nature in transition plans use cases, to provide practitioners with examples of how organisations are incorporating nature into transition planning. The case studies include H&M, B Corp Natura, and the Church Commissioners for England (an asset owner seeking to operationalise a deforestation objective within its portfolio). For more around this topic, ICAEW has published a primer designed to help finance teams integrate nature considerations into their activities.
Sustainable supply chains
The government has announced further measures to tackle illegal deforestation, building on the Environment Act 2021 and the UK Timber Regulation, by requiring larger UK businesses that trade using rainforest-sourced commodities to assess their supply chains and comply with certain data and reporting requirements. The government intends to consult businesses, civil society and international partners on the proposals this year and has published more information.
Telos, part of the Social Enterprise UK group, has published The Hidden Impact in Corporate Supply Chains, a report on how multinational businesses are using purchasing to drive social change in Europe, including UK suppliers providing into Europe. The report is based on analysis of businesses within the Buy Social Europe programme, which supports multinational procurement with the social economy. The report identifies a current ‘baseline’ and highlights substantial potential for growth, with the intention of using this evidence to create a “repeatable market-building programme”.
An updated version of the Commercial Organisations and Public Authorities Duty (Human Rights and Environment) Bill has been introduced as a Private Members Bill in the House of Lords by Baroness Lola Young. The Bill is based on work by the Corporate Justice Coalition as part of its campaign to bring mandatory human rights and environmental due diligence (HREDD) laws into the UK, aligning with the UN Guiding Principles on Business and Human Rights. For more, Fairtrade International has published a position paper calling for HREDD laws and accompanying measures, with seven priority areas, based on its work with agricultural actors, from farmers and farm workers to retailers and governments.
The EU Commission has announced the launch of the EU Digital Product Passports (DPP) Registry. Established under the Ecodesign for Sustainable Products Regulation, DPPs are ‘digital containers’ intended to strengthen supply chain transparency by enabling better informed consumer choices (more information).
Impact investing
The British Business Bank has announced commitments of up to £90m to 10 new microfunds under the first investments made through its £400m Investor Pathways Capital initiative. The programme aims to support first-time fund managers from a wider range of backgrounds and increase access to venture capital for early-stage, high-growth businesses. The Pathway Fund has highlighted that three graduates of its Fund Manager Incubator programme secured cornerstone commitments through the initiative, which its CEO, Asher Craig, said demonstrated real demand for diverse fund managers.
Responsible Finance has highlighted new government and private sector backing for Community Development Finance Institutions (CDFIs). The government’s announcement includes support through the British Business Bank’s Community ENABLE Funding programme, a £10m commitment from JPMorganChase, and new support from BNY to help strengthen community finance and improve access to funding for underserved businesses.
Better Society Capital has set out three myths around “scale, risk and impact-washing” that it aims to dispel in relation to Local Government Pension Scheme (LGPS) investment in local economies. The article argues that place-based investment can be delivered at scale while balancing diversification, fiduciary duties, and impact considerations.
Save the Children has collaborated with Key Fund, South Yorkshire Mayoral Combined Authority and others to launch the £500,000 Dream Big South Yorkshire Fund, a blended finance pilot supporting organisations working to tackle child poverty. Described as “the first dedicated ‘child-centred’ investment fund in the country”, the initiative will use Save the Children Global Ventures’ Child-Lens Investment Framework to inform funding decisions on loans, microloans, and grants towards organisations supporting “children and families in communities most impacted by poverty”.
Social Investment Business (SIB) has announced that it has agreed in principle to act as fund manager for the Liverpool City Region Social Investment Pathfinder Fund, which is expected to launch later this year. Described as “creating a new model for social investment”, the place-based fund aims to mobilise £50m over seven years to improve access to finance and asset ownership for social enterprises and community organisations through a mix of early-stage blended finance, scale-up investment, and support for community ownership. The announcement notes discussions with the Office for Impact Economy to establish the Liverpool City Region as an “Impact City Region”.
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